G-M Water Supply Corporation v. City of Hemphill, Texas
12-16-00129-CV
| Tex. App. | Nov 22, 2016Background
- G‑M Water Supply Corporation (nonprofit) bought water from the City of Hemphill under a long‑standing contract; the City sets an annual per‑1,000‑gallon rate based on projected annual costs and estimated treated water output, subject to year‑end audit adjustments.
- G‑M built its own treatment plant and reduced purchases from the City for 2015–16; the City raised the contract rate from $2.8333 to $5.2137 per 1,000 gallons, while G‑M calculated a $3.6492 rate and paid invoices at that lower amount.
- The City sued for breach of contract and sought a temporary injunction requiring G‑M to pay accrued arrearages into court registry and to pay future invoices at the City’s $5.2137 rate pending trial.
- At the injunction hearing only the City’s manager testified; the trial court granted a mandatory temporary injunction ordering G‑M to pay future invoices directly to the City at $5.2137 and required deposit of arrearages into the registry.
- G‑M appealed the mandatory portion (payments to the City at the full rate); the appellate court reviewed whether the City proved probable, imminent, and irreparable injury and whether the mandatory injunction was necessary to prevent extreme hardship.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether City proved probable, imminent, irreparable injury to justify a mandatory temporary injunction | City: G‑M’s payments shortfall and alleged precarious finances threaten City’s fiscal reserves and ability to provide services; money judgment may be unsatisfied | G‑M: City has an adequate remedy at law (money judgment); evidence of insolvency and irreparable harm was speculative | Court: City failed to show probable, imminent, irreparable injury; injunction abused discretion (sustained for G‑M) |
| Whether fear of non‑satisfaction of judgment justified injunction | City: reductions in G‑M account balances and large capital investment suggest possible inability to pay | G‑M: account evidence showed hundreds of thousands in cash; City’s witness lacked specific knowledge—testimony speculative | Court: evidence did not reasonably support conclusion G‑M could not satisfy a judgment; remedy at law adequate |
| Whether impact on City’s capital reserves and postponed capital expenses showed irreparable harm | City: reserve declined ~$100,000 and capital purchases were frozen, harming services | G‑M: City still had >$1M reserves and continued to provide services; no showing of actual service interruption or irreparable loss | Court: postponement of purchases and reserve decline did not show imminent or irreparable injury; not a clear and compelling showing |
| Whether recurring/continuous harm justified equitable relief (avoid repeated suits) | City: ongoing monthly underpayments create continuous wrong and recurring litigation | G‑M: single money judgment can make City whole; successive suits not required | Court: doctrine inapplicable—money judgment adequate to compensate; injunction not justified |
Key Cases Cited
- Davis v. Huey, 571 S.W.2d 859 (Tex. 1978) (limits appellate review of merits in temporary injunction interlocutory appeals)
- Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (temporary injunction preserves status quo; standard for issuance)
- In re Newton, 146 S.W.3d 648 (Tex. 2004) (definition of status quo for injunction analysis)
- Health Care Serv. Corp. v. E. Texas Med. Ctr., 495 S.W.3d 333 (Tex. App.—Tyler 2016) (evidentiary limits on lay opinion and proof required for injunctions)
- Marketshare Telecom, L.L.C. v. Ericsson, Inc., 198 S.W.3d 908 (Tex. App.—Dallas 2006) (injunctive relief requires clear proof of actual irreparable injury)
- Bankler v. Vale, 75 S.W.3d 29 (Tex. App.—San Antonio 2001) (inability to pay judgment can render legal remedy inadequate)
- Tex. Indus. Gas v. Phoenix Metallurgical Corp., 828 S.W.2d 529 (Tex. App.—Houston [1st Dist.] 1992) (same principle on adequacy of legal remedy)
- Pharaoh Oil & Gas, Inc. v. Ranchero Esperanza, Ltd., 343 S.W.3d 875 (Tex. App.—El Paso 2011) (mandatory injunctions require clear and compelling extreme necessity)
- Sinclair Ref. Co. v. McElree, 52 S.W.2d 679 (Tex. Civ. App.—Dallas 1932) (recurring continuous injury doctrine supports injunction when successive suits otherwise required)
- 183/620 Grp. Joint Venture v. SPF Joint Venture, 765 S.W.2d 901 (Tex. App.—Austin 1989) (application of continuous‑injury principle)
- Horton v. Robinson, 776 S.W.2d 260 (Tex. App.—El Paso 1989) (money judgment can compensate for past, present, and future contract damages)
Disposition: The appellate court dissolved the April 5, 2016 mandatory temporary injunction ordering G‑M to pay future invoices at $5.2137 and remanded for further proceedings.