T.F.W. Management, Inc. and Timothy F. Williams v. Westwood Shores Property Owners Association--Appeal from 411th District Court of Trinity County

Reversed and Rendered and Majority and Dissenting Opinions filed November 9, 2004

Reversed and Rendered and Majority and Dissenting Opinions filed November 9, 2004.

In The

Fourteenth Court of Appeals

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NO. 14-03-01358-CV

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T.F.W. MANAGEMENT, INC. AND TIMOTHY F. WILLIAMS, Appellants

V.

 WESTWOOD SHORES PROPERTY OWNERS ASSOCIATION, Appellee

On Appeal from the 411th District Court

Trinity County, Texas

Trial Court Cause No. 17,734

D I S S E N T I N G O P I N I O N

I respectfully dissent.

The majority seems to acknowledge then ignore our standards for review of the trial court=s decision to grant a temporary injunction. The purpose of a temporary injunction is to preserve the status quo of a litigation=s subject matter pending a trial on the merits. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The decision to grant or deny a temporary injunction is within the sound discretion of the trial court. Id. We should reverse the grant of a temporary injunction only if the trial court abused that discretion. Id. We may not substitute our judgment for that of the trial court, but we must determine only whether the trial court=s action was so arbitrary that it exceeded the bounds of reasonable discretion. Id. We should draw all legitimate inferences from the evidence in the light most favorable to the judgment of the trial court. Tom James of Dallas, Inc. v. Cobb, 109 S.W.3d 877, 883 (Tex. App.CDallas 2003, no pet.). Additionally, we should not assume that the evidence presented at a preliminary hearing will be the same as the evidence developed at a full trial on the merits. Id. at 885.

An applicant for a temporary injunction must plead and prove (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. These are the only issues before the trial court; the underlying merits of the case are not presented. See Tom James, 109 S.W.3d at 882. Therefore, an appeal from an order granting a temporary injunction does not present for appellate review the ultimate legal issues of the case. Id. at 883 We may review only whether the trial court abused its discretion in concluding that an applicant showed a cause of action, a probable right to the relief sought, and a probable, imminent, and irreparable injury. See id.

Discussion

The assignment of water rights requires TFW to maintain the water at a sufficient level so that Association members may also enjoy the benefits of Westwood Lake for aesthetic and recreational purposes so long as water suitable for these purposes is reasonably available from Trinity River Authority of Texas [TRA] under terms substantially similar to those contained within the [Water Sales Agreement], between [WSI], and [TRA] in effect as of the date of this Assignment of Water Rights, with adjustments for inflation.

In its first and second issues, TFW claims that by issuing the injunction, the trial court impliedly found that under the contract (1) the Lake water level was inadequate, and (2) the terms of a current Water Sales Agreement were substantially similar to the terms of the Water Sales Agreement in effect in 1996. TFW further claims the trial court abused its discretion by making these findings because they are not supported by any probative evidence. However, because the underlying merits of a case were not before the trial court, I do not agree with appellant=s contention that issuance of the injunction implies the trial court made findings on these ultimate legal questions. Therefore, an appeal of the temporary injunction does not present for review the ultimate questions of whether TFW is in breach of the contract because the water level was insufficient, or because water is available under terms similar to the previous contract. See id. at 882B83 (holding that the ultimate question of whether covenants not to compete were enforceable was not at issue in an appeal from the denial of a temporary injunction). We may review only the trial court=s exercise of discretion in determining whether appellee showed it had a probable right to relief in its breach of contract claim. See id. at 883.

Probable Right to Relief

Water Level

First, TFW claims there was no evidence that the Lake water level was inadequate. It notes that a TFW representative testified the water level was adequate for recreational and aesthetic purposes. However, the Association presented evidence that its members had complained the Lake conditions were inadequate, fishing in certain areas was no longer possible, and some boat docks were unusable because of the low level of water. In addition, one homeowner had sold his home on the Lake partially because he was frustrated with the conditions resulting from the low water level. When a trial court bases a decision concerning the grant of a temporary injunction on conflicting evidence there is no abuse of discretion. Id. at 883. Based on the conflicting evidence, I would hold the trial court did not abuse its discretion in concluding the Association proved it had a probable right to relief based on TFW=s failure to maintain an adequate water level.

Terms of Water Sales Agreement

TFW also claims that under the plain language of the contract, it is relieved of any obligation to supply water to the Lake because water is no longer available from TRA under terms substantially similar to those in the Water Sales Agreement. Under the Water Sales Agreement WSI paid $1551.00 per year for up to 470 acre feet of water ($3.30 per acre foot). In 2000, TRA raised the price of water to $35 per acre foot, with rates set to increase an additional $20 per acre foot every two years through 2006. TFW claims that considering this price increase, there is no evidence the terms contained in the previous Water Sales Agreement are Asubstantially similar@ to terms available to TFW today. Both parties agree that the price of water is the only term in the agreement that has changed.

The assignment of water rights requires TFW to maintain the water at a level sufficient for aesthetic and recreational enjoyment so long as water Asuitable for these purposes@ is available under terms substantially similar to those contained within the Water Sales Agreement. The deed conveying the lake to the Association is similar, but it requires maintenance so long as water Asufficient for these purposes@ is available. To determine the intent of the parties to a contract, we will consider all writings that pertain to the same transaction. DeWitt Co. Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 102 (Tex. 1999). Neither the deed nor the assignment requires TFW to purchase the same amount of water previously purchased under the Water Sales Agreement. The contractual provisions require only that water Asufficient@ or Asuitable@ be available. The Association presented evidence that until 2000, the water level of the lake was sufficient for recreational and aesthetic purposes. It presented additional evidence that from 1995 to 2000, less than 16 acre feet of water were pumped into the lake from TRA each year. Under the Water Sales Agreement TFW could use up to 470 acre feet of water from TRA each year; however less than 16 acre feet was sufficient and suitable to maintain the water level for aesthetic and recreational purposes. Accordingly, I would hold that the trial court did not abuse its discretion in concluding that the above estimated amount of water is available to TFW under substantially similar terms. Although WSI paid $3.30 per acre foot of water, this rate was applicable only when over 400 acre feet of water were purchased. According to the rate schedule in effect at that time, which was incorporated into the Water Sales Agreement, the minimum charge was $500 per year for up to 50 acre feet of water. Under the revised water rates, the minimum charge is $1,000 for up to 10 acre feet of water. However, the cost for 20 acre feet was $1,100 in 2002, and is currently $1,500. Based on this cost increase for the amount of water sufficient to maintain the water level of the lake, I cannot conclude that the trial court abused its discretion in determining that the Association had established a probable right to the relief on the ground that water was available to TFW under substantially similar terms.

Additionally, a provision that water, under substantially similar terms, be available Awith adjustments for inflation.@ is included in the assignment of water rights. The Association presented evidence that the rate increase in 2000 was based on the cost of water in general and inflation. In reviewing the trial court=s decision, we must draw all legitimate inferences from the evidence in the light most favorable to the grant of the temporary injunction. See Tom James, 109 S.W.3d at 883. Based on the evidence in the record, it is my considered opinion the trial court did not abuse its discretion in determining that the Association established a probable right to the relief based on the cost of water with adjustments for inflation.

Specific Performance

In its third issue, TFW contends the temporary injunction impermissibly requires specific performance of the contract. Specific performance of a contract will be granted only if there is a mutuality of remedy, which TFW claims is not present here. See Smith v. Nash, 571 S.W.2d 372, 375 (Tex. App.CTexarkana 1978, no writ); see Fed. Sign v. Texas S. Univ., 951 S.W.2d 401, 409 (Tex. 1997) (noting mutuality of remedy is the right of both parties to a contract to obtain specific performance) superseded by statute on other grounds as stated in Gen. Servs. Comm=n v. Little-Tex. Insulation Co., 38 S.W.3d 591, 593 (Tex. 2001). However, by issuing a temporary injunction a trial court is not enforcing a contract, but preserving the status quo of a litigation=s subject matter pending a trial on the merits. See Cardinal Health Staffing Network, Inc. v. Bowen, 106 S.W.3d 230, 239 (Tex. App.CHouston [1st Dist.] 2003, no pet.) (citing Butnaru, 84 S.W.3d at 204). Accordingly, the trial court was not requiring specific performance of the contract. Nevertheless, mutuality of remedy is available in this case. Under the contract, the Association is required to accept the burden of TFW=s water rights and pay certain taxes and assessments. Accordingly, I would overrule TFW=s third issue.

Terms of Injunction

In its fourth issue, TFW claims the trial court abused its discretion by imposing new duties and obligations on TFW that were not contemplated by the contract. Under the injunction, TFW was directed to:

maintain the water level of Westwood Lake no lower from the top of the drain on the lake than the deficiency of average rainfall based on the records for reporting at Bush Intercontinental Airport as reported by the Houston Chronicle on Monday of each week.

Additionally, under the injunction TFW=s obligation was limited to a maximum of 200 acre feet of water per year. TFW claims the trial court impermissibly altered certain terms in the original contract. This claim is based on TFW=s assertion that its contractual obligation is limited to maintaining the water at a level appropriate for aesthetic and recreational purposes. We agree with TFW=s contention that a court, while construing a contract, may not revise it so as to impose additional duties on a party. See Royal Indem. Co. v. Marshall, 388 S.W.2d 176, 181 (Tex. 1965). However, as previously noted, the purpose of a temporary injunction is to preserve the status quo of the litigation=s subject matter pending a trial on the merits. Butnaru, 84 S.W.3d at 204. By issuing a temporary injunction, a trial court is not enforcing a contract with altered terms, but preserving the status quo. See Cardinal Health Staffing Network, Inc., 106 S.W.3d at 239 (noting that the purpose of a temporary injunction is not to enforce anything). A trial court exceeds its authority if its temporary injunction order changes the status quo. Barnstone v. Robinson, 678 S.W.2d 562, 563 (Tex. App.CHouston [14th Dist.] 1984, writ dism=d).

The status quo is the last, actual, peaceable, non contested status that preceded the pending controversy. State v. Southwestern Bell Tel. Co., 526 S.W.2d 526, 528 (Tex. 1975). The Association presented evidence that prior to 2000, the water level of the Lake was to the top of a drainpipe, a level which was in compliance with the contract. This level fluctuated by approximately one foot during that time. The temporary injunction requires TFW to maintain the water level no lower from the top of the drain than the deficiency of average rainfall in Houston. In setting this requirement, the trial court indicated that the lowest deficiency of average rainfall of the year had been ten to twelve inches. Therefore, because this requirement will keep the water at a level that is similar to the water level prior to 2000, it does not change the status quo. Additionally, under the injunction, TFW is not required to pump more than 200 acre feet of water into the Lake per year. The trial court set this limit based on the increased price of water and the TFW=s prior contract with TRA for 470 acre feet of water. There was no evidence that more than 200 acre feet of water would be necessary to maintain the water at the required level under the injunction. Consequently, I cannot conclude that the terms of this temporary injunction change the status quo. Accordingly, it is my considered opinion that the trial court did not exceed its authority.

Balance of Equities

In its fifth issue, TFW contends the trial court abused its discretion by failing to balance the equities between the parties. In considering an application for a temporary injunction, a trial court balances the equities between the parties as well as the resulting conveniences and hardships. Universal Health Servs., Inc. v. Thompson, 24 S.W.3d 570, 578 (Tex. App.CAustin 2000, no pet.). A trial court may consider whether the applicant would suffer significant or slight injury if the injunction were erroneously denied, and whether the injury to the opposing party would be significant or slight if the injunction were erroneously granted. NMTC Corp. v. Conarroe, 99 S.W3d 865, 869 (Tex. App.CBeaumont 2003, no pet.). TFW claims the trial court failed to consider the equitable hardships faced by TFW, such as the current high cost of water and the requirement that it maintain the Lake at a level not contemplated by the contract. However, the record indicates the trial judge balanced the hardship of TFW against the hardship of the Association. In its Temporary Injunction Order, the trial court noted, as supported by the record, that if TFW continued to inadequately replenish the Lake, dry areas around the Lake would increase preventing the Association members from using even more portions of the Lake. At the hearing on the motion for the temporary injunction, the court indicated that it was considering the rainfall in the area as well as the increased cost of water in setting the parameters of TFW=s obligations. Considering the supporting evidence, I would conclude that the trial court did not abuse its discretion when it balanced equities in favor of TFW.

Irreparable Harm

In its sixth issue, TFW claims the trial court abused its discretion by finding appellee would be irreparably harmed if the temporary injunction were denied. Harm is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard. Butnaru, 84 S.W.3d at 204. The Association presented testimony and photographs depicting the water level at the time of the hearing to support its contention that its members cannot enjoy the recreational and aesthetic benefits of the Lake that they once enjoyed. Banks of the Lake where the water had receded were Aunsightly@ and sometimes emanated a bad odor. Several homes were on these banks. Boat docks that had been built in the water were on dry land and bulkheads were exposed. One former Association member testified that he sold his home because the water level of the Lake decreased, and he could no longer fish from his property. This is evidence of irreparable harm. See Hayter v. Fern Lake Fishing Club, 318 S.W.2d 912, 914 (Tex. App.CBeaumont 1958, no writ); Positive Feed, Inc. v. Wendt, Nos. 01-96-00614-CV, 01-96-01250-CV, 1998 WL 43321, at *10 (Tex. App.CHouston [1st Dist.] Feb. 5, 1998, pet. denied) (not designated for publication) (both holding the loss of enjoyment of one=s home constitutes irreparable injury for purposes of injunctive relief).

TFW claims that the Association presented no evidence of injury because the photographs they submitted depicting the condition of the Lake were taken on random dates and did not accurately represent the average water level of the Lake. Because the evidence on this issue was conflicting, I would hold that the trial court did not abuse its discretion by finding the Association would suffer irreparable harm. See Tom James, 109 S.W.3d at 883. Accordingly, I would affirm the trial court=s order granting a temporary injunction.

/s/ Charles W. Seymore

Justice

Judgment rendered and Majority and Dissenting Opinions filed November 9, 2004.

Panel consists of Justices Fowler, Edelman and Seymore. (Fowler, J., majority.)