Opinion
No. 04-14-00331-CV
08-31-2016
Gene DEVOLL, Appellant v. Rebecca DEMONBREUN and William Dowds, Appellees
OPINION
From the 285th Judicial District Court, Bexar County, Texas
Trial Court No. 2013-CI-05169
Honorable Antonia Arteaga, Judge Presiding Opinion by: Patricia O. Alvarez, Justice
Dissenting Opinion by: Sandee Bryan Marion, Chief Justice Sitting: Sandee Bryan Marion, Chief Justice Patricia O. Alvarez, Justice Luz Elena D. Chapa, Justice AFFIRMED
Appellant Gene DeVoll appeals the trial court's May 1, 2014 order granting a temporary injunction against him in favor of appellees Rebecca Demonbreun and William Dowds. Under the terms of the temporary injunction, Gene may not transfer or encumber certain partnership property pending resolution of Appellees' suit. Appellees sued Gene claiming he helped his brother Norris, Appellees' judgment debtor, fraudulently transfer a partnership interest to Gene to shield it from Appellees' charging order. Gene argues the trial court abused its discretion in granting the injunction and asks this court to reverse the trial court's order and dissolve the injunction. We disagree and decline to do so. For the reasons discussed below, we overrule Gene's issues and affirm the trial court's order.
This appeal was originally set for submission on briefs for November 12, 2014. On January 9, 2015, Norris DeVoll filed a suggestion of bankruptcy. Although Norris was neither an appellant nor an appellee in this appeal, because his community property interest in Paulette DeVoll's partnership interest—the subject of this appeal—might be property of the bankruptcy estate, we abated this appeal. On June 20, 2016, appellant Gene DeVoll moved to reinstate this appeal. He advised this court that the bankruptcy court had issued its final judgment in the bankruptcy case and that case was closed. On July 13, 2016, we granted his motion and reinstated this appeal.
BACKGROUND
A. Judgment, Turnover Order
In February 2010, Appellees obtained a judgment against Norris DeVoll, Gene's brother, for damage they suffered from purchasing a house from Norris. On March 8, 2011, the trial court considered Appellees' first amended application for a turnover order against Norris's assets including his community property. Norris's community property included his undivided one-half interest of his wife's (Paulette's) interest in the 206 Camedia Partnership. B. 206 Camedia Partnership, Interest Transfer
The 206 Camedia Partnership was established as a general partnership with two general partners: Gene, with an initial 50.1% interest, and Paulette, with an initial 49.9% interest. The partnership's primary asset was real property located at 466 Adrian Drive, San Antonio, Bexar County, Texas. Paulette stated the 466 Adrian Drive property value was $75,000.00; Appellees assert its tax appraisal was approximately $78,000.00.
On March 10, 2011, acting as the senior general partner in the 206 Camedia Partnership, Gene cited a default provision in the partnership agreement and sent Paulette a "Notice of Default and Demand" to cure. He notified Paulette that if she had not cured the default within ten days, he would exercise what he asserted was his right under the partnership agreement to purchase her partnership interest for $5,000.00. Gene purchased her interest and paid her the first of five annual payments of $1,000.00.
C. Fraudulent Transfer Suit
In August 2011, the trial court signed a turnover order that included Norris's undivided one-half interest in the income and receipts from the 206 Camedia Partnership. The turnover order also ordered Norris and Paulette not to transfer or dispose of any of Norris's community property described in the order. Norris and Paulette appealed the turnover order, and this court affirmed the order. DeVoll v. Demonbreun, No. 04-11-00775-CV, 2012 WL 5873698 (Tex. App.—San Antonio Nov. 21, 2012, no pet.) (mem. op. on reh'g).
In March 2013, Appellees sued Gene for a fraudulent transfer. They contended the alleged partnership default was a ploy to alienate Paulette's partnership interest and thus protect Norris's undivided one-half interest in the partnership from Appellees' charging order. On April 9, 2013, after a hearing, the trial court granted a temporary injunction which restrained Gene from selling or encumbering the 206 Camedia Partnership's principal asset: the real property located at 466 Adrian Drive.
Gene appealed. Because the trial court's temporary injunction did not comply with Rule 683, this court's April 16, 2014 judgment reversed the trial court's order and dissolved the injunction. DeVoll v. Demonbreun, No. 04-13-00900-CV, 2014 WL 1494609 (Tex. App.—San Antonio Apr. 16, 2014, no pet.) (mem. op.) (addressing the requirements of Rule 683 of the Texas Rules of Civil Procedure).
Immediately thereafter, Appellees sought another temporary injunction. After a hearing, on May 1, 2014, the trial court issued a temporary injunction that ordered Gene not to "transfer, sell, encumber, or otherwise dispose of the property located at 466 Adrian [Drive]."
Gene filed this interlocutory appeal. In five issues he challenges aspects of the trial court's temporary injunction order. In a sixth, he complains the trial court improperly sustained Appellees' best evidence and relevance objections. In a seventh, he contends the trial court failed to follow the required procedure to set an injunction bond and the ordered amount was clearly insufficient.
We review the applicable law for a temporary injunction and address each issue in turn.
TEMPORARY INJUNCTION ELEMENTS, REVIEW
A. Elements
"A temporary injunction . . . does not issue as a matter of right." Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002); accord Walling v. Metcalfe, 863 S.W.2d 56, 57 (Tex. 1993) (per curiam). "To obtain a temporary injunction, the applicant must plead and prove three specific elements: (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." Butnaru, 84 S.W.3d at 204; accord Walling, 863 S.W.2d at 57.
B. Interlocutory Appeal
If the trial court grants the injunction, the order is an appealable interlocutory order. TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(4) (West Supp. 2015); In re Tex. Natural Res. Conserv. Comm'n, 85 S.W.3d 201, 205 (Tex. 2002); Qwest Commc'n Corp. v. AT & T Corp., 24 S.W.3d 334, 336 (Tex. 2000) (per curiam).
C. Standard of Review
"The decision to grant or deny a temporary writ of injunction lies in the sound discretion of the trial court, and the court's grant or denial is subject to reversal only for a clear abuse of that discretion." Walling, 863 S.W.2d at 58; accord Butnaru, 84 S.W.3d at 204. "[U]nder an abuse of discretion standard, the court of appeals cannot overrule the trial court's decision unless the trial court acted unreasonably or in an arbitrary manner, without reference to guiding rules or principles." Butnaru, 84 S.W.3d at 211; accord Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). A trial court acts within its discretion if it correctly analyzes and applies the law to the facts, see Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992), and "some evidence reasonably supports the trial court's decision." Butnaru, 84 S.W.3d at 211; accord Blackthorne v. Bellush, 61 S.W.3d 439, 443 (Tex. App.—San Antonio 2001, no pet.).
TEMPORARY INJUNCTION AND PARTNERSHIP CHARGING ORDER STATUTE
In his first issue, Gene argues the temporary injunction violates a provision of the general partnership charging order statute by granting equitable relief against the partnership's property. See TEX. BUS. ORGS. CODE ANN. § 152.308 (West 2012) (general partnership charging order statute). See generally id. § 101.112 (limited liability companies charging order statute); id. § 153.256 (limited partnerships charging order statute).
A. Parties' Arguments
Gene asserts the temporary injunction improperly prevents him, as the sole general partner of the 206 Camedia Partnership, from transferring, selling, or encumbering the 466 Adrian Drive property. He acknowledges Appellees obtained a judgment against Norris's community property interest in the 206 Camedia Partnership. But he contends he lawfully expelled Paulette from the partnership because of her default, and Paulette no longer has any interest in the partnership. Citing section 152.308(f), Gene insists the temporary injunction should be dissolved because the statute prohibits Norris's creditors (Appellees) from exercising either legal or equitable remedies against the 206 Camedia Partnership's property. See id. § 152.308(f).
Appellees Rebecca Demonbreun and William Dowds do not directly address Gene's argument that the temporary injunction contravenes section 152.308. Instead, they argue Gene and Paulette fraudulently transferred Paulette's partnership interest to Gene to shield Norris's community property interest in the partnership from Appellees' judgment. They insist the Texas Uniform Fraudulent Transfer Act (TUFTA) prevents the DeVolls from fraudulently transferring Paulette's partnership interest to Gene. See TEX. BUS. & COM. CODE ANN. §§ 24.001-24.013 (West 2015 & Supp. 2015). They contend the trial court properly granted the temporary injunction because they met their burden to show its essential elements: "(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." Butnaru, 84 S.W.3d at 204; accord Walling, 863 S.W.2d at 57.
Gene cites section 152.308(f) and insists it bars equitable relief against the partnership's property. See TEX. BUS. ORGS. CODE ANN. § 152.308(f). Appellees cite TUFTA's remedies for creditors in cases of fraudulent transfers. See TEX. BUS. & COM. CODE ANN. § 24.008(a)(3)(A).
Neither side analyzes the interaction between the two statutes. Because the facts invoke both statutes, we must first analyze their interaction and determine if any conflict exists between the two.
B. Interaction between TUFTA and Charging Order Statute
In this case of first impression for this court, we must decide how the general partnership charging order provisions, TEX. BUS. ORGS. CODE ANN. § 152.308, interact with TUFTA's remedies for a judgment creditor, TEX. BUS. & COM. CODE ANN. § 24.008, and whether the two statutes conflict. We begin by construing the respective statutes de novo. See First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 631 (Tex. 2008) (construing a statute is a question of law invoking de novo review); City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008) (same).
C. Statutory Construction
"In construing statutes, we ascertain and give effect to the Legislature's intent as expressed by the language of the statute." City of Rockwall, 246 S.W.3d at 625; accord City of Lorena v. BMTP Holdings, L.P., 409 S.W.3d 634, 641 (Tex. 2013). "To discern [the legislature's] intent, we begin with the statute's words . . . [and] consider statutes as a whole." TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011); State ex rel. State Dep't of Highways & Pub. Transp. v. Gonzalez, 82 S.W.3d 322, 327 (Tex. 2002). "We must read the statute as a whole and not just isolated portions." Tex. Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 642 (Tex. 2004); accord TGS-NOPEC, 340 S.W.3d at 439. We "construe the text according to its plain and common meaning unless a contrary intention is apparent from the context or unless such a construction leads to absurd results." Presidio Indep. Sch. Dist. v. Scott, 309 S.W.3d 927, 930 (Tex. 2010); accord City of Rockwall, 246 S.W.3d at 626.
We keep in mind the "object sought to be attained . . . [and the] consequences of a particular construction." TEX. GOV'T CODE ANN. § 311.023 (West 2013); accord Tex. Adjutant Gen.'s Office v. Ngakoue, 408 S.W.3d 350, 354 (Tex. 2013); City of Sunset Valley, 146 S.W.3d at 642. We will not adopt a construction that leads to absurd results because, inter alia, we presume the legislature intended for the statute to produce "a just and reasonable result." See TEX. GOV'T CODE ANN. § 311.021; TEX. BUS. ORGS. CODE ANN. § 1.051 (applying the Code Construction Act to the Business Organizations Code); Presidio Indep. Sch. Dist., 309 S.W.3d at 930; City of Rockwall, 246 S.W.3d at 626.
D. General Partnership Charging Order Statute
The general partnership charging order statute may subject a partnership interest to a charging order. TEX. BUS. ORGS. CODE ANN. § 152.308. It states, in its entirety, as follows:
(a) On application by a judgment creditor of a partner or of any other owner of a partnership interest, a court having jurisdiction may charge the partnership interest of the judgment debtor to satisfy the judgment.
(b) To the extent that the partnership interest is charged in the manner provided by Subsection (a), the judgment creditor has only the right to receive any distribution to which the judgment debtor would otherwise be entitled in respect of the partnership interest.
(c) A charging order constitutes a lien on the judgment debtor's partnership interest. The charging order lien may not be foreclosed on under this code or any other law.Id.
(d) The entry of a charging order is the exclusive remedy by which a judgment creditor of a partner or of any other owner of a partnership interest may satisfy a judgment out of the judgment debtor's partnership interest.
(e) This section does not deprive a partner or other owner of a partnership interest of a right under exemption laws with respect to the judgment debtor's partnership interest.
(f) A creditor of a partner or of any other owner of a partnership interest does not have the right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the partnership.
E. Construing Charging Order Statute
Having presented the section at issue, we consider its plain language. See TGS-NOPEC, 340 S.W.3d at 439. The section's plain language subjects a general partnership interest to a charging order under certain circumstances and limits the enforcement remedies available to the judgment creditor. TEX. BUS. ORGS. CODE ANN. § 152.308; see Stanley v. Reef Sec., Inc., 314 S.W.3d 659, 664-65 (Tex. App.—Dallas 2010, no pet.); see also In re Prodigy Servs., LLC, No. 14-14-00248-CV, 2014 WL 2936928, at *5 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (mem. op.). Considered in isolation, the section's plain language is unambiguous. Cf. TGS-NOPEC, 340 S.W.3d at 439 (reiterating we consider statutes as a whole). It plainly provides that a judgment creditor's exclusive remedy to satisfy a judgment against a debtor partner's partnership interest is a charging order. TEX. BUS. ORGS. CODE ANN. § 152.308(d); see Stanley, 314 S.W.3d at 664; see also Scheel v. Alfaro, 406 S.W.3d 216, 228 (Tex. App.—San Antonio 2013, pet. denied). It also negates the rights typically afforded to a judgment creditor of foreclosure and execution. TEX. BUS. ORGS. CODE ANN. § 152.308(d), (f); see TEX. R. CIV. P. 621 ("Enforcement of a Judgment"); In re Prodigy, 2014 WL 2936928, at *5; cf. Stanley, 314 S.W.3d at 665.
However, neither Chapter 152 nor the Texas Business Organizations Code's general provisions address which statute controls if a charging order provision conflicts with another code or statute. See, e.g., TEX. BUS. ORGS. CODE ANN. §§ 1.001-12.261 (Title 1, General Provisions). To help us discern the legislature's intent and give it effect, City of Rockwall, 246 S.W.3d at 625, we review the history and purpose of the charging order. See TEX. GOV'T CODE ANN. § 311.023 (providing, inter alia, "circumstances under which the statute was enacted," "object sought to be attained," and "consequences of a particular construction" as matters that may be considered in statutory construction).
1. History
Until the Texas Uniform Partnership Act was passed in 1961, Ingram v. Deere, 288 S.W.3d 886, 894 (Tex. 2009), a judgment creditor could force the sale of partnership property to satisfy a judgment against a judgment debtor who happened to be a partner in a partnership. See, e.g., O'Connor v. Gable, 298 S.W.2d 209, 212-13 (Tex. Civ. App.—Dallas 1957, writ ref'd n.r.e.) ("It is well settled that the interest of an individual in partnership property is subject to levy and sale under an execution against him individually."); see also Stanley, 314 S.W.3d at 664 (recognizing the previous practice). Forcing a sale of partnership property to satisfy a non-partnership debt could disrupt a partnership's business and disadvantage partners who were not otherwise liable to the judgment creditor. See Stanley, 314 S.W.3d at 664. In 1961, Texas implemented the charging order statute, Ingram, 288 S.W.3d at 894, and in 2011, applied it to general partnerships as well, see Act of May 11, 2011, 82d Leg., R.S., ch. 139, § 43, sec. 152.308, 2011 Tex. Sess. Law Serv. 651, 664-65 (West).
2. Purposes
From the statute's history, its plain language, and its interpretation by other courts, we conclude its purposes include (1) allowing a judgment creditor to satisfy a judgment from a partner's partnership interest (2) while protecting the business operations of the affected partnership. See, e.g., Stanley, 314 S.W.3d at 664-65.
a. Satisfy Judgment
One purpose of the charging order statute is to control how the judgment creditor is compensated from the individual partner's interest. See TEX. BUS. ORGS. CODE ANN. § 152.308(a); Stanley, 314 S.W.3d at 664-65. Under the statute, at the judgment creditor's request, the trial court may charge a partnership interest to satisfy the judgment creditor's judgment. TEX. BUS. ORGS. CODE ANN. § 152.308(a). The charging order acts as a lien on the charged partnership interest. Id. § 152.308(c). Whatever distributions the judgment debtor partner receives are subject to the charging order. Id. § 152.308(b); Stanley, 314 S.W.3d at 665.
b. Protect Partnership
Another purpose is to protect an otherwise non-liable partnership's business from potentially harmful disruptions such as a forced sale of partnership property. See Stanley, 314 S.W.3d at 664-65. The statute makes the charging order the judgment creditor's exclusive remedy for satisfying the judgment from the judgment debtor's partnership interest. TEX. BUS. ORGS. CODE ANN. § 152.308(d). It prohibits the judgment creditor from foreclosing on the lien, id. § 152.308(c), or forcing the partnership to make distributions to the individual partner, id. § 152.308(b). It also removes the judgment creditor's "right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the partnership." Id. § 152.308(f); see Stanley, 314 S.W.3d at 664-65.
The charging order provisions balance these purposes—compensating the judgment creditor and protecting the partnership's business—"by allowing the judgment creditor to collect on the judgment through the transferable interest of the judgment debtor while prohibiting interference in the management and activities of the [partnership]." Fed. Nat'l Mortg. Ass'n v. Grossman, CIV. 12-2953 SRN/JJG, 2014 WL 4055371 (D. Minn. Aug. 15, 2014) (quoting REVISED UNIFORM LIMITED LIABILITY COMPANY ACT (2006) § 503, cmt.).
Having reviewed the history and purposes of the general partnership charging order statute, we turn to the Texas Uniform Fraudulent Transfer Act.
F. TUFTA's Remedies for Creditors
In its provisions, the Texas Uniform Fraudulent Transfer Act (TUFTA) creates remedies for creditors under certain circumstances. Challenger Gaming Sols., Inc. v. Earp, 402 S.W.3d 290, 294 (Tex. App.—Dallas 2013, no pet.); accord Tel. Equip. Network, Inc. v. TA/Westchase Place, Ltd., 80 S.W.3d 601, 607 (Tex. App.—Houston [1st Dist.] 2002, no pet.). Its "Remedies of Creditors" provision states in its entirety as follows:
(a) In an action for relief against a transfer or obligation under this chapter, a creditor, subject to the limitations in Section 24.009 of this code, may obtain:
(1) avoidance of the transfer or obligation to the extent necessary to satisfy the creditor's claim;
(2) an attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with the applicable Texas Rules of Civil Procedure and the Civil Practice and Remedies Code relating to ancillary proceedings; or
(3) subject to applicable principles of equity and in accordance with applicable rules of civil procedure:
(A) an injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;
(B) appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or
(C) any other relief the circumstances may require.
(b) If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.TEX. BUS. & COM. CODE ANN. § 24.008.
G. Construing TUFTA's Remedies for Creditors
By its plain language, the statute expressly allows a creditor to obtain "an injunction against further disposition by . . . a transferee . . . of the asset transferred or of other property." Id. § 24.008(a)(3)(A); see Tel. Equip. Network, 80 S.W.3d at 607; Blackthorne, 61 S.W.3d at 442. It conditions the injunction on "applicable principles of equity" and "applicable rules of civil procedure." TEX. BUS. & COM. CODE ANN. § 24.008(a)(3). But it does not expressly state whether its provisions control over other statutes with potentially conflicting provisions. See id. §§ 24.001-.013. Therefore, before we seek to reconcile its creditor remedies provisions with the charging order statute, we consider the purposes for the creditor remedies.
H. Purposes of TUFTA
"[TUFTA's] purpose is to prevent debtors from defrauding creditors by placing assets beyond their reach." Challenger Gaming, 402 S.W.3d at 293; accord Tel. Equip. Network, 80 S.W.3d at 607. It fulfills its purpose, in part, by providing a creditor with remedies against a debtor who fraudulently transfers assets to place them out of the creditor's reach. See TEX. BUS. & COM. CODE ANN. § 24.008 (West 2015); Challenger Gaming, 402 S.W.3d at 293; Tel. Equip. Network, 80 S.W.3d at 607. If a debtor was able to fraudulently transfer an asset beyond a creditor's reach without recourse, the statute's central purpose would be frustrated. Cf. TEX. BUS. & COM. CODE ANN. § 24.008 (creating creditor remedies against fraudulent transfers); Tel. Equip. Network, 80 S.W.3d at 610 (sustaining a temporary injunction against a transferee of allegedly fraudulently transferred assets); Blackthorne, 61 S.W.3d at 442 (same). I. Harmonizing Charging Order, Remedies of Creditors Statutes
Having reviewed the charging order and remedies of creditors statutes, we now address their interaction.
Our responsibility is "to construe statutes so as to harmonize [them] with other relevant laws, if possible." La Sara Grain Co. v. First Nat'l Bank of Mercedes, 673 S.W.2d 558, 565 (Tex. 1984); accord Dall. Merchant's & Concessionaire's Ass'n v. City of Dall., 852 S.W.2d 489, 495 (Tex. 1993). We construe the statutes to harmonize their provisions so we do not "create a conflict where none need exist." Tex. Indus. Energy Consumers v. CenterPoint Energy Hous. Elec., LLC, 324 S.W.3d 95, 107 (Tex. 2010); accord Argonaut Ins. Co. v. Baker, 87 S.W.3d 526, 531 (Tex. 2002) (noting potentially conflicting statutes "should be construed in a manner that harmonizes rather than conflicts"); Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 901 (Tex. 2000) (addressing harmonizing statutes that are not irreconcilably in conflict). We consider the "object sought to be attained . . . [and the] consequences of a particular construction." TEX. GOV'T CODE ANN. § 311.023; accord Ngakoue, 408 S.W.3d at 354. We seek a construction that (1) gives maximum effect to the legislature's intent expressed in each statute and (2) produces "a just and reasonable result." See TEX. GOV'T CODE ANN. § 311.021; Presidio Indep. Sch. Dist., 309 S.W.3d at 930; City of Rockwall, 246 S.W.3d at 626.
J. Concurrently Construing Statutes
As we have discussed, neither statute expressly asserts dominance over the other, but their provisions can intersect.
To prevent fraudulent transfers, TUFTA allows a creditor to obtain an injunction—an equitable remedy—against an allegedly fraudulently transferred partnership asset. TEX. BUS. & COM. CODE ANN. § 24.008; see Ritchie v. Rupe, 443 S.W.3d 856, 873 (Tex. 2014); In re Francis, 186 S.W.3d 534, 551 (Tex. 2006) (Wainwright, J., dissenting) (citing In re Gamble, 71 S.W.3d 313, 317 (Tex. 2002)).
On the other hand, subparagraph (f) of the charging order statute strips a creditor of the right to exercise an equitable remedy against the partnership's property. TEX. BUS. ORGS. CODE ANN. § 152.308(f); see In re Prodigy, 2014 WL 2936928, at *5.
But we must read (f) not as an isolated provision but in conjunction with (d). See TGS-NOPEC, 340 S.W.3d at 439; City of Sunset Valley, 146 S.W.3d at 642. Subparagraph (d) makes the charging order an exclusive remedy, but it does not say the charging order is the exclusive remedy for all purposes; it says the charging order is "the exclusive remedy by which a judgment creditor . . . may satisfy a judgment out of the judgment debtor's partnership interest." TEX. BUS. ORGS. CODE ANN. § 152.308(d) (emphasis added). When we read (f) together with (d), we conclude (f) deprives a creditor of the right to an equitable remedy against partnership property to satisfy the judgment. See id. § 152.308(d), (f).
In light of TUFTA's express remedies for creditors, we do not interpret section 152.308 to mean a judgment creditor has no right to any equitable remedy against any partnership property under any circumstance.
K. Construction to Avoid Absurd Result
Rather, we think it axiomatic that, by making a charging order the exclusive remedy to satisfy a judgment against a judgment debtor's partnership interest, the legislature did not intend to promote fraudulent transfers of partnership property. Cf. Taylor v. S & M Lamp Co., 12 Cal. Rptr. 323, 329 (Cal. Ct. App. 1961) ("To apply the [charging order as an exclusive remedy] rule as a shield to [a fraudulent transfer] is contrary to reason and would violate public policy."). Construing section 152.308(f) as an absolute bar against any equitable remedy—with respect to partnership assets—in the presence of a TUFTA claim would subordinate a public interest to a private interest, contra TEX. GOV'T CODE ANN. § 311.021(5) (identifying a legislative presumption that "public interest is favored over any private interest"), directly contradict Taylor v. S & M Lamp Co., and violate section 24.012's directive to "make uniform the law with respect to the subject of this chapter among states enacting it," see Nathan v. Whittington, 408 S.W.3d 870, 874 (Tex. 2013) (per curiam) (recognizing that TUFTA is a uniform act and Texas courts should strive to construe its provisions "as consistent[ly] as possible with the constructions of other states that have enacted a Uniform Fraudulent Transfer Act containing a similar provision" (quoting TEX. BUS. & COM. CODE ANN. § 24.012.)).
In a TUFTA action, an absolute bar would create an unnecessary conflict with section 24.008's remedies for creditors. See TEX. BUS. & COM. CODE ANN. § 24.008 (Remedies of Creditors); Tex. Indus. Energy Consumers, 324 S.W.3d at 107 (rejecting a construction that created "a conflict where none need exist"); La Sara Grain Co., 673 S.W.2d at 565 ("Generally, courts are to construe statutes so as to harmonize with other relevant laws, if possible."). Where a fraudulent transfer claim has been asserted, barring even temporary relief against any partnership asset to prevent partnership interest dissipation could produce results that are not just and reasonable. See TEX. GOV'T CODE ANN. § 311.021 (legislature intends "just and reasonable result"); Presidio Indep. Sch. Dist., 309 S.W.3d at 930; City of Rockwall, 246 S.W.3d at 627. Construing the statute as an absolute bar would frustrate the legislature's clear intent to protect creditors from fraudulent transfers and could produce absurd results. See TEX. BUS. & COM. CODE ANN. § 24.008 (Remedies of Creditors); Presidio Indep. Sch. Dist., 309 S.W.3d at 930 (eschewing constructions that yield absurd results); City of Rockwall, 246 S.W.3d at 626 (same); Challenger Gaming, 402 S.W.3d at 294 (purposes of TUFTA); Tel. Equip. Network, 80 S.W.3d at 607 (same).
We cannot adopt such a construction. See Presidio Indep. Sch. Dist., 309 S.W.3d at 930; City of Rockwall, 246 S.W.3d at 627.
L. Harmonized Construction
Instead, we harmonize these statutes and adopt a construction that implements the intent of each statute and avoids an unnecessary conflict. See Presidio Indep. Sch. Dist., 309 S.W.3d at 930; City of Rockwall, 246 S.W.3d at 627. We construe these statutes to allow a trial court to temporarily enjoin the sale, transfer, encumbrance, or dissipation of partnership assets underlying a partnership interest when that interest is the object of a charging order and the judgment creditor asserts a TUFTA claim involving the partnership interest or its underlying assets. We conclude applicable principles of equity would require the trial court to impose only the minimum reasonable restraint on any partnership asset needed to protect the value of the partnership interest to the degree necessary to satisfy the unpaid portion of the judgment from the partnership interest distributions. See TEX. BUS. & COM. CODE ANN. § 24.008(a)(3) (authorizing an injunction against transfer or disposition of an asset "subject to applicable principles of equity").
In our view, this harmonized construction gives effect to the legislature's intent for each statute: it prevents a judgment debtor partner from defrauding a creditor by improperly placing assets beyond the creditor's reach, TEX. BUS. & COM. CODE ANN. § 24.005; Challenger Gaming, 402 S.W.3d at 294, and retains the statutory prohibition against a judgment creditor foreclosing on partnership property while minimizing any disruptions to a partnership's business, see TEX. BUS. ORGS. CODE ANN. § 152.308; Stanley, 314 S.W.3d at 664-65.
M. Charging Order Statute Does Not Bar Equitable Injunction
Thus, we hold the charging order statute's prohibition against a creditor exercising legal or equitable remedies against partnership property to satisfy a judgment does not prevent a court from granting an injunction under section 24.008(a)(3)(A). See TEX. BUS. & COM. CODE ANN. § 24.008(3)(A). To obtain injunctive relief against partnership property in a TUFTA suit, the applicant must plead and prove all the required elements. See Butnaru, 84 S.W.3d at 204 (temporary injunction elements). If the applicant meets his burden, before granting relief, the trial court must consider, at a minimum, the following factors:
• the amount of the unpaid balance of the judgment,
• the value of the partnership assets sought to be enjoined, and
• the burden on the partnership's operations and management any relief granted would impose.
Exercising applicable principles of equity, the trial court may order relief to protect partnership assets from sale, transfer, encumbrance, etc., but must grant only the minimum reasonable restraint necessary to protect the partnership interest from being dissipated pending resolution of the TUFTA claim. See TEX. BUS. & COM. CODE ANN. § 24.008(a)(3); Taylor, 12 Cal. Rptr. at 329.
N. Response to Dissent
The dissent construes section 152.308(f)'s plain language as an absolute bar to a trial court's ability to grant injunctive relief to protect a judgment creditor's potential interest in an asset underlying a judgment debtor's partnership interest. Respectfully, we remain convinced that subsections (d) and (f) must be read together, see TEX. BUS. ORGS. CODE ANN. § 152.308; TGS-NOPEC, 340 S.W.3d at 439; City of Sunset Valley, 146 S.W.3d at 642, and must be construed in conjunction with TUFTA's provisions and purposes, see, e.g., TEX. BUS. & COM. CODE ANN. § 24.008(a)(3).
O. Application
1. Judgment, Unpaid Balance
In their July 12, 2011 Application for Charging Order, Appellees asserted the trial court judgment awarded them approximately $114,721.00 in damages, $9,319.12 in prejudgment interest, and post-judgment interest. Their application also asserted the judgment remained wholly unsatisfied.
On August 4, 2011, the trial court denied the application; it stated general partnerships were not subject to a charging order. On September 1, 2011, general partnerships became subject to charging orders. Act of May 11, 2011, 82d Leg., R.S., ch. 139, § 43, sec. 152.308, 2011 Tex. Sess. Law Serv. 651, 664-65 (West). --------
Gene asserts an August 9, 2011 receipt from the Bexar County Sheriff's Office shows Norris turned over documents, a promissory note for $5,000.00, and $185.50 in cash to the Sheriff's Office, and another receipt shows the items were later turned over to Appellees.
2. Value of the Partnership Assets
In her answers to interrogatories, Paulette valued her 206 Camedia Partnership interest at $75,000.00. The trial court heard evidence that the partnership's primary asset was the 466 Adrian Drive property, and the Bexar County Appraisal District had appraised the property at approximately $78,000.00.
3. Burden on the Partnership's Operations
In his motion for leave to encumber the partnership property, Gene stated his intent to encumber the property with a real estate lien note and deed of trust for a loan of approximately $96,000.00 "to pay all [the partnership's] current obligations." Gene asserted the taxes on the 466 Adrian Drive property were in arrears and the partnership did not have "readily available funds necessary to pay the delinquent taxes" and other expenses without obtaining a loan.
4. Burden on the Partnership's Management
Finally, the trial court received evidence that at the inception of the 206 Camedia Partnership, Gene and Paulette were its only two partners. After Paulette's interest was transferred to Gene, he became the partnership's sole partner.
5. Injunction Granted Minimum Reasonable Relief
Having construed the statutes and reviewed the evidence the trial court received, we consider whether the trial court abused its discretion by granting equitable relief against the 206 Camedia Partnership's property.
a. Protecting Partnership Interest Value
The evidence established that Paulette had a 49.9% interest in the partnership (before her interest was transferred) and the partnership owned real property worth at least $75,000.00. It also established that Norris's community property included an undivided one-half of Paulette's partnership interest, and the unpaid balance on the judgment against Norris was at least $118,854.62, not including post-judgment interest and attorney's fees.
After the transfer of Paulette's partnership interest—which Appellees allege was fraudulent—Gene moved the trial court to allow him to encumber the 466 Adrian Drive property. The trial court declined; its order enjoined him from selling, transferring, encumbering, or otherwise disposing of it. Gene asserts the injunction preventing him from obtaining the loan he requested is improper. Cf. TEX. BUS. ORGS. CODE ANN. § 152.308 (protections for partnership interest).
We disagree. We conclude the temporary injunction permissibly maintains the status quo of the property underlying the disputed partnership interest pending resolution of the TUFTA claim. See Butnaru, 84 S.W.3d at 204 (temporary injunction maintains status quo); see also TEX. BUS. & COM. CODE ANN. § 24.008 (TUFTA remedies for creditors).
b. Minimal Restraint on Partnership Business, Management
We also conclude the order minimizes the restraints on the partnership business and its management.
The order does not force the sale of the partnership property. See TEX. BUS. ORGS. CODE ANN. § 152.308(f); Stanley, 314 S.W.3d at 465-66. It does not order any change in the use of the property—the partnership may continue to operate it as rental property. The order does not redirect or interfere with the rental income from the property. Gene remains in control of the partnership, and the other partners are not disadvantaged by the injunction. Cf. In re Albright, 291 B.R. 538, 541 (Bankr. D. Colo. 2003) (addressing a charging order's purpose as applied to a single-member LLC and opining that "[a] charging order protects the autonomy of the original members, and their ability to manage their own enterprise. In a single-member entity, there are no non-debtor members to protect. The charging order limitation serves no purpose in a single member limited liability company, because there are no other parties' interests affected.").
c. Trial Court Acted Within Its Discretion
The evidence before the trial court showed the unpaid balance on the judgment was substantially greater than Norris's portion of the partnership interest, the 466 Adrian Drive property was the primary asset of the partnership, and Gene intended to completely encumber the value of that asset. The trial court's order did not change the ownership, alter the operation, or divert the income stream from the property, nor was any other partner not a part of the TUFTA suit disadvantaged. See In re Albright, 291 B.R. at 541.
Therefore, we conclude the trial court did not abuse its discretion by ordering temporary equitable relief with respect to the specified partnership property. We overrule Gene's first issue.
PERIOD FOR STATUTE OF REPOSE
In his second issue, Gene contends the trial court abused its discretion by ordering injunctive relief because Appellees' right to bring their claims had already been extinguished by a statute of repose. We disagree.
A. Extinguishment of Cause of Action Provision
The relevant portions of TUFTA's "Extinguishment of Cause of Action" provision state as follows:
(a) Except as provided by Subsection (b) of this section, a cause of action with respect to a fraudulent transfer or obligation under this chapter is extinguished unless action is brought:
(1) under Section 24.005(a)(1) of this code, within four years after the transfer was made or the obligation was incurred or, if later, within one year after the transfer or obligation was or could reasonably have been discovered by the claimant;
(2) under Section 24.005(a)(2) or 24.006(a) of this code, within four years after the transfer was made or the obligation was incurred; or
(3) under Section 24.006(b) of this code, within one year after the transfer was made.
(b) A cause of action on behalf of a spouse, minor, or ward with respect to a fraudulent transfer or obligation under this chapter is extinguished unless the action is brought:
TEX. BUS. & COM. CODE ANN. § 24.010 (West 2015).(1) under Section 24.005(a) or 24.006(a) of this code, within two years after the cause of action accrues, or if later, within one year after the transfer or obligation was or could reasonably have been discovered by the claimant; or;
(2) under Section 24.006(b) of this code within one year after the date the transfer was made.
B. Analysis
In their Plaintiffs' Original Petition of March 27, 2013, Appellees asserted Paulette transferred her partnership interest to Gene "with actual intent to hinder, delay, or defraud Plaintiffs." See TEX. BUS. & COM. CODE ANN. § 24.005(a)(1). They also asserted Paulette transferred her interest "without receiving a reasonably equivalent value in exchange for the transfer and [Paulette] intended to incur, or believed or reasonably should have believed that [] she would incur, a debt beyond her ability to pay as it became due." See id. § 24.005(a)(2)(B). They further claimed that Paulette "did not receive reasonably equivalent value in exchange for the partnership interest and was insolvent or became insolvent as a result of the transfer." See id. § 24.006(a).
We conclude this pleading alleged a fraudulent transfer under sections 24.005(a)(1), (a)(2)(B), and 24.006(a). See id. §§ 24.005(a)(1), (a)(2)(B), 24.006(a). The period of repose for claims brought under these sections is four years. Id. § 24.010(a)(1),(2); see Nathan v. Whittington, 408 S.W.3d 870, 876 (Tex. 2013) (per curiam) ("TUFTA's section 24.010 is a statute of repose."). In open court, the parties stipulated that Gene "took full control of the partnership property around March of 2011." To prevent their claims from being extinguished, Appellees had to bring their action within four years of the March 2011 transfer. See TEX. BUS. & COM. CODE ANN. 24.010(a); Nathan, 408 S.W.3d at 874. Appellees brought their action on March 27, 2013, approximately two years before their causes of action would have been extinguished. See TEX. BUS. & COM. CODE ANN. 24.010(a); Nathan, 408 S.W.3d at 874. Thus, Appellees' right to bring their action had not been extinguished, and the trial court did not misapply the statute of repose.
We overrule Gene's second issue.
PROBABLE, IMMEDIATE, AND IRREPARABLE INJURY
In his third issue, Gene argues the trial court abused its discretion by ordering injunctive relief because Appellees failed to meet their burden to show any probable, imminent, and irreparable injury. He asserts five points to show Appellees could not have been injured, and thus failed to meet their burden.
A. First Injunction Intact Pending Mandate
Gene's first point is the trial court's May 1, 2014 order issuing a temporary injunction was improperly granted because this court's mandate in appeal number 04-13-00900-CV had not yet issued, the trial court's April 9, 2013 injunction was still in effect, and thus Appellees could not show any imminent injury.
Gene cites no authority to support his contention that this court's April 16, 2014 judgment dissolving the April 9, 2013 injunction did not take effect until the mandate issued. Cf. Edwards Aquifer Auth. v. Chem. Lime, Ltd., 291 S.W.3d 392, 393 (Tex. 2009) (recognizing the difficulty of the question); id. at 406-07 (Brister, J., concurring) (opining that "our decisions should take effect on the date of judgment" and noting that in appellate courts "stays are lifted when the judgment issues"); In re Zurita, No. 03-12-00439-CV, 2012 WL 2989168, at *1 (Tex. App.—Austin July 9, 2012, orig. proceeding) (mem. op.) ("[I]ssuance of a mandate by an appellate court is not necessary to render a judgment final."); accord Universe Life Ins. Co. v. Giles, 982 S.W.2d 488, 492 (Tex. App.—Texarkana 1998, pet. denied) ("Nothing in the rules prohibits the trial court from enforcing the appellate court's judgment after it has been rendered but before the mandate has been received."). He also cites no authority showing the trial court could not grant the May 1, 2014 temporary injunction given this court's April 16, 2014 judgment and the impending mandate—which issued on June 25, 2014.
Gene's first point is unavailing.
B. Statute Bars Requested Relief
Gene's second, third, and fourth points repeat his earlier complaints: the charging order statute bars the requested relief, and TUFTA's statute of repose extinguished Appellees' claims. For the reasons we have already discussed, these points fail.
C. Community Property Already Turned Over
In his fifth point, Gene argues Appellees could not show irreparable injury because the community property specified in the turnover order had already been turned over to the Sheriff.
The August 1, 2011 turnover order listed Norris's interest in Paulette's partnership interest as community property subject to the order. Gene asserts that Norris "fully complied with the order on August 9, 2011," as evidenced by the Sheriff's receipt of that date. Although Gene does not explain how Norris complied with the turnover order with respect to the partnership interest, the receipt lists "Notice of Default dated 3-10-11" and "Partnership Agreement dated 8-1/11" as two items received by the Sheriff. Gene seems to argue that Norris had no community property interest in the 206 Camedia Partnership to turn over because Paulette's partnership interest had already been transferred to Gene. But the nature of that partnership interest transfer is the subject of the underlying suit, and the fraudulent transfer question has not been decided.
Gene's bare assertion that Appellees cannot show any irreparable injury because the partnership interest had already been transferred does not demonstrate that the trial court acted unreasonably or arbitrarily. See Butnaru, 84 S.W.3d at 211. Gene's fifth point also fails.
Having considered each of Gene's five points regarding Appellees' alleged lack of probable, imminent, and irreparable injury, we conclude the record contains some evidence of such injury, and the trial court did not misapply the law. See Butnaru, 84 S.W.3d at 211; Walker, 827 S.W.2d at 840. We overrule Gene's third issue.
NO ADEQUATE REMEDY AT LAW
In his fourth issue, Gene contends Appellees could not show they have no adequate remedy at law because they received a turnover order and sought a charging order.
In their application for a temporary injunction, Appellees argued Paulette's partnership interest was fraudulently transferred to Gene, and if Gene was allowed to fully encumber the principal asset underlying the partnership interest, the value of Norris's community property interest could be entirely dissipated. Gene presents no authority to show how the turnover order or charging order application is an adequate remedy at law to prevent the partnership interest from being dissipated.
A trial court may issue a temporary injunction, pending resolution of a TUFTA claim, to prevent a transferee from further transferring or encumbering an asset underlying a partnership interest. Tel. Equip. Network, 80 S.W.3d at 610; Blackthorne, 61 S.W.3d at 442. The trial court correctly analyzed and applied the law, and some evidence supports its decision. See Butnaru, 84 S.W.3d at 198; Walker, 827 S.W.2d at 840.
We overrule Gene's fourth issue.
PROBABLE RIGHT TO RECOVER
In his fifth issue, Gene argues the trial court abused its discretion in granting the injunction because Appellees failed to show a probable right to recover. See Butnaru, 84 S.W.3d at 204 (requiring an applicant to plead and prove "a probable right to the relief sought").
To support this issue, Gene repeats the same arguments: (1) the charging order statute bars injunctive relief, (2) the statute extinguished Appellees' cause of action, (3) Appellees could not show any irreparable injury, (4) Appellees had an adequate remedy at law, (5) Norris's community property had already been turned over to the Sheriff, and (6) the partnership transfer was not fraudulent.
We have already considered and rejected the first five arguments; the sixth is a question to be resolved in the underlying suit. We overrule Gene's fifth issue.
BEST EVIDENCE, RELEVANCE OBJECTIONS
In his sixth issue, Gene contends the trial court abused its discretion by sustaining Appellees' best evidence and relevance objections. A. Evidentiary Rulings, Standard of Review
"Generally, rulings on objections as to admissibility of evidence . . . are reviewed for abuse of discretion." Whirlpool Corp. v. Camacho, 298 S.W.3d 631, 638 (Tex. 2009). "A successful challenge to evidentiary rulings usually requires the complaining party to show that the judgment turns on the particular evidence excluded or admitted." City of Brownsville v. Alvarado, 897 S.W.2d 750, 753-54 (Tex. 1995); accord Interstate Northborough P'ship v. State, 66 S.W.3d 213, 220 (Tex. 2001). If the trial court erroneously excludes evidence, but the error did not "probably cause the rendition of an improper [order]," we will not overturn the trial court's decision. See TEX. R. APP. P. 44.1; Interstate Northborough P'ship, 66 S.W.3d at 220.
B. Defendant's Exhibits Admitted
At the hearing on Appellees' application for a temporary injunction, Gene represented himself individually. As the defendant, he moved to admit eleven exhibits. The trial court admitted without objection all but two of his exhibits.
C. Best Evidence Objection
Defendant's Exhibit 4—a copy of the August 1, 2011 turnover order—was admitted without objection. When Gene asked Norris to recite the items that were turned over to Appellees, Appellees raised a best evidence objection to Norris's testimony, and the trial court sustained the objection.
D. Relevance Objection
The trial court excluded Defendant's Exhibits 5 and 7. Defendant's Exhibit 5 is a Sheriff's office receipt indicating items Norris turned over to the Sheriff to satisfy the August 1, 2011 turnover order. Defendant's Exhibit 7 is a receipt for the turnover items transferred from the Sheriff's office to Appellees' agent. The following is the pertinent excerpt from the testimony at the hearing:
[MR. DEVOLL]: Can you state for the Court the items that were required to be turned over to the sheriff?
MR. RILEY: Objection. It violates the best evidence rule. The order speaks for itself, Your Honor.
THE COURT: Respectfully, Mr. DeVoll, I'm sorry. I have to sustain his objection.
[MR. DEVOLL]: Can you tell the Court what items have been turned over to the sheriff?
MR. RILEY: Objection. Relevance, Your Honor.
THE COURT: How is that relevant, Mr. DeVoll?
MR. DEVOLL: Pardon?
THE COURT: How is it relevant? Any response to his objection?
MR. DEVOLL: It's relevant, Your Honor, because the very thing that he is seeking today is an injunction for disposition or doing anything with the property and the partnership interest has already been turned over to the sheriff and turned over to him. It's already been done, and we're [sic] here seeking an injunction to keep from disposing of the interest in the property, which he just stipulated, and it's already been turned over to him by the sheriff and we have the receipts right here.
THE COURT: Respectfully, your objection is sustained. Next question.
As shown in the excerpt above, Appellees raised a relevance objection to Defendant's Exhibits 5 and 7. Gene explained the receipts were relevant because they showed the partnership interest had already been turned over to Appellees. The trial court excluded the exhibits and sustained the relevance objection.
E. No Harmful Error
Even assuming arguendo the trial court erred in sustaining the best evidence and relevance objections, for this court to upset the trial court's order, Gene must show the trial court's decision turns on the excluded evidence. See Interstate Northborough P'Ship, 66 S.W.3d at 220; City of Brownsville, 897 S.W.2d at 753-54.
It is undisputed that title to the 466 Adrian Drive property had not been turned over to Appellees and that Gene, as the 206 Camedia Partnership's general partner, intended to encumber it. The two receipts, Defendant's Exhibits 5 and 7, do not conclusively prove the partnership interest had been turned over to Appellees. They merely show a copy of the partnership agreement and a copy of the default notice letter to Paulette were allegedly turned over to Appellees in August 2011. Even if admitted as evidence, the receipts do not conclusively disprove any of the three elements for a temporary injunction: "(1) a cause of action against the defendant; (2) a probable right to the relief sought; [or] (3) a probable, imminent, and irreparable injury in the interim." See Butnaru, 84 S.W.3d at 204; Walling, 863 S.W.2d at 57.
Having reviewed the entire record, we conclude the trial court's order granting the temporary injunction does not turn on the excluded evidence, and the trial court's exclusion of the exhibits did not "probably cause[] the rendition of an improper [order]." See TEX. R. APP. P. 44.1(a); City of Brownsville, 897 S.W.2d at 753-54. We overrule Gene's sixth issue.
INJUNCTION BOND PROCEDURE, AMOUNT
In his last issue, Gene complains the injunction is void because the trial court failed to comply with Rule 684 and the amount of the bond was "grossly inadequate" to protect him from potential losses. See TEX. R. CIV. P. 684 (Applicant's Bond). We address each complaint in turn.
A. Defective Bond Procedure Complaint
Gene contends the trial court set a bond for the temporary restraining order, but did not set a separate bond as required for an injunction.
A temporary injunction is void if the trial court fails to require a bond. TEX. R. CIV. P. 684; Ex parte Coffee, 328 S.W.2d 283, 291 (Tex. 1959) (orig. proceeding); Speedman Oil Co. v. Duval Cnty. Ranch Co., 504 S.W.2d 923, 931 (Tex. Civ. App.—San Antonio 1973, writ ref'd n.r.e.). But a trial court may apply a bond filed with the temporary restraining order to satisfy the bond requirement for the temporary injunction. See Ex parte Coffee, 328 S.W.2d at 291.
Here, the temporary restraining order required a bond of $100.00, and on April 17, 2014, Appellees filed the bond. The bond's recitations bind appellee Rebecca Demonbreun as principal, and her attorneys as sureties, to pay Gene in accordance with Rule 684. See TEX. R. CIV. P. 684; Ex parte Coffee, 328 S.W.2d at 291. In its May 1, 2014 order granting the temporary injunction, the order states "Plaintiffs' bond in the amount of $100, on file with the Court, is hereby approved as the bond required for issuance of this injunction, and the injunction shall issue without delay."
The trial court's May 1, 2014 order—which applied the April 17, 2014 bond to the temporary injunction—did not violate Rule 684 and was not void. See Ex parte Coffee, 328 S.W.2d at 292; Speedman Oil, 504 S.W.2d at 931.
B. Bond Amount Insufficient Complaint
Gene also contends the trial court abused its discretion by setting the bond amount at $100.00.
1. Setting Temporary Injunction Bond Amount
"The purpose of a [temporary injunction] bond is to provide protection to the enjoined party for any possible damages occurring as a result of the injunction." Khaledi v. H.K. Global Trading, Ltd., 126 S.W.3d 273, 286 (Tex. App.—San Antonio 2003, no pet.); accord Biodynamics, Inc. v. Guest, 817 S.W.2d 128, 130 (Tex. App.—Houston [14th Dist.] 1991, writ dism'd by agr.). "[T]he amount of bond required on the issuance of a temporary injunction rests within the sound discretion of the trial court and will not be disturbed on appeal in the absence of an abuse of discretion." Khaledi, 126 S.W.3d at 286; accord Biodynamics, 817 S.W.2d at 131. A trial court does not abuse its discretion if it correctly applies the law to the facts and some evidence reasonably supports its decision. Butnaru, 84 S.W.3d at 211; Blackthorne, 61 S.W.3d at 442.
2. Gene's Evidence of Potential Damage
In arguing for a higher bond amount, Gene recited a figure for the 466 Adrian Drive property of $75,000.00. He stated its property taxes are past due, and "the State is in the process of foreclosing on the property." He added that he lives out of town and his costs to appear in court are approximately $700 per occurrence. He asked the court to set a bond "commensurate with the figures that are prevalent in this case" and "commensurate with reality."
3. Appellees' Response
In response, Appellees argued Gene's travel costs are irrelevant, and Appellees' counsel testified to the following. Appellees have a judgment for more than $190,000.00 against Norris—who has a community property interest in whatever interest Paulette has in the partnership. See Coastal Bend Milk Producers Ass'n v. Garcia, 368 S.W.2d 260, 264 (Tex. Civ. App.—San Antonio 1963, no writ) (considering the value of Appellees' assets held by Appellant when reviewing a temporary injunction bond amount). Appellees' counsel was awarded $1,600.00 for attorney's fees, but the partnership has not paid the fees. And, the application did not ask the court to intercept the income from the property or prevent the partnership from continuing to control the operation of the property—the applicants only sought to prevent Gene from transferring, disposing of, or encumbering the 466 Adrian Drive property.
4. Bond Amount Not Clearly Insufficient
The trial court heard Gene's argument that the partnership could suffer an economic loss if the property was foreclosed while the injunction was in effect. Appellees responded that the partnership would continue to manage the property and receive its rental income while the injunction was in effect. In reply, Gene presented no evidence to show what specific damage he would incur if the injunction were erroneously granted. He failed to present evidence showing that, if the injunction was granted, the foreclosure would occur, the partnership would suffer a loss, and the amount of the loss in light of the other evidence would make the $100.00 bond amount clearly insufficient. See Speedman Oil, 504 S.W.2d at 931 (noting "the record furnishes no reliable information which would guide us in setting the proper [bond] amount.").
Having reviewed the evidence before the trial court, and recognizing "a trial court has considerable discretion in setting the amount of bond for a temporary injunction," we cannot conclude the bond amount it set is clearly insufficient. See Biodynamics, Inc., 817 S.W.2d at 131; Coastal Bend Milk Producers, 368 S.W.2d at 264. We overrule Gene's seventh issue.
CONCLUSION
We conclude the charging order statute's prohibition against a judgment creditor exercising legal or equitable remedies against partnership property to satisfy a judgment does not prevent the trial court from granting the equitable relief it did in this case. We also conclude Appellees' claims were not extinguished by the statute of repose because they were brought within the period established by the statute. Further, Appellees met their burden to show each essential element of a temporary injunction, but appellant Gene DeVoll failed to meet his burden to show the complained of order turned on the evidence the trial court excluded. Finally, the temporary injunction bond procedure met the applicable requirements, and we cannot say the bond amount was clearly insufficient.
We deny Gene DeVoll's request to dissolve the temporary injunction, and we affirm the trial court's order.
Patricia O. Alvarez, Justice