in Re 8650 Frisco, LLC D/B/A Estilo Gaucho Brazilian Steakhouse, Mandona, LLC, Galovelho, LLC, Bahtche, LLC, Claudio Nunes and David Jeiel Rodrigues
01-15-00423-CV
| Tex. App. | May 12, 2015Background
- Plaintiffs (Los Cucos) and Defendants/Relators (8650 Frisco, et al.) entered a Rule 11 settlement on August 5, 2014; dispute concerns enforcement and alleged failure to execute promissory note and other security agreements required by the settlement.
- Los Cucos moved to enforce the settlement and, in a supplement to their petition, expressly sought specific performance if damages proved inadequate, alleging irreparable harm from Defendants’ refusal to execute required documents.
- Defendants opposed discovery requests for extensive financial documents and contended those requests are irrelevant to the breach-of-contract claim and the elements required for specific performance.
- The trial judge compelled production of the requested documents and imposed sanctions on Defendants; Defendants filed a petition for writ of mandamus arguing the trial court abused its discretion.
- The supplemental mandamus filing argues: (1) irreparable-harm allegations and discovery sought are irrelevant to Los Cucos’s pleaded breach-of-contract claim; (2) Los Cucos’s pleading fails to meet the distinct requirements for specific performance or injunctive relief; and (3) fair-notice pleading standards were not met so the trial court could not determine relevant evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held / Relief Sought |
|---|---|---|---|
| Relevance of requested financial discovery | Discovery needed to assess Defendants’ compliance and credit risk; specific performance alleged if damages inadequate | Financials are irrelevant to breach elements and to Los Cucos’s primary damages claim; discovery not reasonably calculated to lead to admissible evidence | Relators argue trial court abused discretion in compelling discovery and imposed sanctions; seek mandamus vacating orders. |
| Sufficiency of pleading for specific performance | Plaintiffs explicitly plead specific performance as alternative if damages are inadequate and allege irreparable harm from lack of note/security | Plaintiffs have not pleaded facts showing inadequacy of legal remedy or otherwise satisfied equity-specific pleading requirements; they conflate injunctive-relief elements with specific performance | Relators contend pleadings fail fair-notice and cannot justify discovery into creditor-risk matters; ask appellate court to find abuse of discretion. |
| Adequacy of damages as a remedy | Plaintiffs assert damages may be inadequate due to credit risk and request specific performance as remedy | Defendants argue settlement concerns personal-property-type obligations where damages are generally adequate; plaintiffs gave no factual basis showing damages would be inadequate | Relators point to authority requiring proof that legal remedy is inadequate for specific performance and argue Plaintiffs did not meet that burden. |
| Mandamus standard / availability of appellate relief | N/A (Plaintiffs seek enforcement at trial court) | Relators assert no adequate appellate remedy exists for compelled, overbroad discovery and sanctions | Relators ask the appellate court to issue mandamus, vacate discovery and sanctions orders, and find respondent abused discretion. |
Key Cases Cited
- B & W Supply, Inc. v. Beckman, 305 S.W.3d 10 (Tex. App.—Houston [1st Dist.] 2009) (elements of breach of contract).
- American Apparel Products, Inc. v. Brabs, Inc., 880 S.W.2d 267 (Tex. App.—Houston [14th Dist.] 1994) (specific performance generally disfavored for personal property; need to show inadequacy of legal remedies).
- Guzman v. Acuna, 653 S.W.2d 315 (Tex. App.—San Antonio 1983) (equity requires greater certainty in contract terms for specific performance).
- Low v. Henry, 221 S.W.3d 609 (Tex. 2007) (fair-notice pleading standard).
- In re BDPJ Houston, LLC, 420 S.W.3d 309 (Tex. App.—Houston [14th Dist.] 2013) (original proceeding on discovery/mandamus issues).
- Henderson v. KRTS, Inc., 822 S.W.2d 769 (Tex. App.—Houston [1st Dist.] 1992) (irreparable-harm element pertains to injunctive relief).
- Humphrey v. Camelot Ret. Cmty., 893 S.W.2d 55 (Tex. App.—Corpus Christi 1994) (when financial condition is relevant to rescission or inability to perform).
- Horton v. Robinson, 776 S.W.2d 260 (Tex. App.—El Paso 1989) (discussion of specific-performance prerequisites).