Rocklon, LLC v. Beverly Paris and Daniel Paris, 09-16-00070-CV

Background

Kristin Paris died in a January 26, 2015 head-on collision; the driver, Kennedy, later pled guilty to intoxicated manslaughter and was criminally convicted. Kristin’s parents sued multiple defendants (including Rocklon, LLC) for wrongful death and asserted TUFTA fraudulent-transfer claims.
Paris alleged Kennedy used corporate entities (Rocklon and Rockal) as alter egos, and that after the collision Kennedy and his son Ruston moved control of Rocklon assets and liquidated Rocklon’s primary asset (real property at 5980 S. MLK Pkwy — the MLK Property).
Shortly after Kennedy’s release on bond he and Ruston went to the bank; authority over Rocklon’s account was changed to Ruston, and Ruston arranged sale of the MLK Property; sale proceeds were moved and some funds withdrawn.
Paris obtained a temporary injunction prohibiting Rocklon (and those acting with it) from accessing or distributing roughly $1 million in proceeds from the sale (to remain in a Morgan Stanley account).
Rocklon appealed, arguing (1) the injunction improperly froze assets unrelated to Paris’s wrongful-death damages (i.e., an improper pre-judgment/pre-suit attachment), and (2) the injunction lacked competent evidence (no probable right of recovery under TUFTA; no imminent/irreparable harm).
The trial court found evidence supporting an alter-ego / reverse-piercing theory and multiple TUFTA “badges of fraud” (transfer to insider, concealment, transfer shortly after suit/charge, liquidation of substantially all assets, lack of equivalent consideration); this Court reviews temporary-injunction grants for abuse of discretion and affirms.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether there was competent evidence of a probable right to relief (alter-ego/reverse-piercing and fraudulent transfer under TUFTA)	Paris: documentary and testimonial evidence showed Kennedy controlled Rocklon (formation records, bank signature card, loan documents, commingling, Kennedy representations) and that transfers (account control to Ruston, sale of MLK Property, movement of proceeds) bore multiple TUFTA badges of fraud.	Rocklon: membership documents and executed company agreement show Ruston was sole member; no valid alter-ego proof; no evidence of a TUFTA transfer or badges of fraud.	Court: evidence (documents, inconsistent records, bank forms, withdrawals, timing of transfers) reasonably supported trial court’s finding of probable right to relief on alter-ego and TUFTA actual-intent theory; no abuse of discretion.
Whether Paris showed imminent and irreparable harm warranting injunction (adequate remedy at law)	Paris: defendants rapidly liquidated Rocklon’s only income asset and began expending proceeds; allowing access to proceeds risked rendering Rocklon judgment-proof so monetary judgment would be unenforceable.	Rocklon: no evidence of insolvency or intentional depletion; funds were ordinary-account activity and plaintiff seeks an improper pre-judgment freeze of unrelated assets.	Court: substantial evidence (timing of transfers, withdrawals, sale of sole asset, uncertainty about remaining assets) supported a finding that money could be dissipated and that damages might be inadequately compensable; injunction upheld.
Whether the injunction was an improper pre-suit/overbroad freeze of assets unrelated to claim	Paris: TUFTA expressly authorizes injunctions against further disposition of assets transferred by a debtor; sale proceeds of MLK Property were the transferred assets at issue.	Rocklon: injunction functionally froze Rocklon’s assets to secure a possible future judgment on claims not tied to the specific asset; improper use of an injunction as pre-judgment attachment.	Court: TUFTA authorizes injunctive relief to preserve assets subject to fraudulent-transfer claims; because the proceeds derived from the challenged transfers, the injunction was not an improper pre-suit attachment.

Key Cases Cited

Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (standard for temporary injunction: plead and prove cause, probable right, and probable, imminent, irreparable injury)
Castleberry v. Branscum, 721 S.W.2d 270 (Tex. 1986) (veil-piercing/alter-ego equitable doctrine; flexible fact-specific analysis)
Cameron Int’l Corp. v. Guillory, 445 S.W.3d 840 (Tex. App.—Houston [1st Dist.] 2014) (interlocutory review limited to validity of temporary injunction; evidence viewed in light most favorable to trial court)
Tel. Equip. Network, Inc. v. TA/Westchase Place, Ltd., 80 S.W.3d 601 (Tex. App.—Houston [1st Dist.] 2002) (purpose of TUFTA and availability of injunctive relief to preserve assets)
Zahra Spiritual Trust v. U.S., 910 F.2d 240 (5th Cir. 1990) (recognizing reverse-piercing to reach corporate assets for individual liability under Texas law)
Walker v. Anderson, 232 S.W.3d 899 (Tex. App.—Dallas 2007) (single badge of fraud not dispositive; concurrence of badges strengthens inference of fraudulent intent)
Blackthorne v. Bellush, 61 S.W.3d 439 (Tex. App.—San Antonio 2001) (TUFTA creates independent cause of action and injunctions may be used to prevent assets being placed beyond creditor reach)
State v. Southwestern Bell Tel. Co., 526 S.W.2d 526 (Tex. 1975) (trial court abuses discretion when misapplying law to established facts)