Leo Bienati, Theresa Pham, Carlos Lacayo and Andres Ruzo, Petitioners, v. Cloister Holdings, LLC, Respondent
No. 23-0223
Supreme Court of Texas
June 7, 2024
PER CURIAM
The issue in this case is whether delay of a trial pending the appellate review of a temporary injunction deprives the court of appeals of jurisdiction to hear the appeal. The court of appeals concluded that the trial court‘s delay would render any judgment in the interlocutory appeal advisory, and thus it dismissed the appeal for want of jurisdiction.
Parties ordinarily should proceed to trial pending an appeal from a temporary injunction. See Sw. Weather Rsch., Inc. v. Jones, 327 S.W.2d 417, 422 (Tex. 1959). Although “[g]enerally[,] the most expeditious way of obviating the hardship and discomforture of an unfavorable preliminary order is to try the case on its merits,” id., the failure to do so does not deprive a court of appeals of jurisdiction over the appeal. An interim appellate decision resolves a current controversy and governs the parties until final judgment. Accordingly, the court of appeals erred in dismissing this appeal for want of jurisdiction based on a delay of the trial date. We reverse its judgment and remand the case to that court for further proceedings.
I
Petitioners Leo Bienati and Theresa Pham are part owners of Holy Kombucha, Inc., a beverage company. Holy Kombucha‘s lender, Montgomery Capital Partners IV, LP, holds a security interest in the company. Respondent Cloister Holdings, LLC, also owns a stake in the company. Holy Kombucha‘s shareholders’ agreement provides that its five-member board of directors must include Bienati, Pham, two Cloister nominees, and one Montgomery nominee.1 The board must not transact business without a quorum. That quorum must include one Cloister nominee, the Montgomery nominee, and either Bienati or Pham.
Cloister alleges that Bienati and Pham mismanaged Holy Kombucha‘s finances, and Montgomery failed to appropriately intervene. As a result, Cloister refused to participate or vote in board meetings. When Cloister stymied business activity by refusing to participate, Bienati, Pham, and the Montgomery nominee purported to amend the shareholders’ agreement by written consent, redefining the quorum to no longer require a Cloister nominee‘s presence.
After its quorum exclusion, Cloister sued Bienati, Pham, and the two Montgomery nominees (collectively, the enjoined board members), asserting contract and tort claims. The trial court granted Cloister‘s request for a temporary injunction, forbidding the board members from “changing, altering, or limiting Cloister‘s ‘Quorum’ rights” as the original shareholders’ agreement provided.
The enjoined board members filed an interlocutory appeal, challenging the temporary injunction. See
Meanwhile, in the court of appeals, the enjoined board members challenged the temporary injunction, contending that (1) the order did not preserve the status quo; (2) Cloister had not shown a probable right to relief or imminent, irreparable injury; (3) the trial court impermissibly amended the order; and (4) the bond was too low.
Rather than addressing the merits, the court of appeals dismissed the appeal. It
II
A
This Court has jurisdiction to determine whether the court of appeals properly determined its own jurisdiction, a ruling we review de novo. LTTS Charter Sch., Inc. v. C2 Constr., Inc., 342 S.W.3d 73, 75 (Tex. 2011). A party is entitled to appeal an interlocutory order that “grants or refuses a temporary injunction.”
The enjoined board members contend that their appeal is neither the pursuit of an advisory opinion nor an advance ruling on the merits. Cloister responds that the appellate court‘s dismissal for want of jurisdiction was proper because the enjoined board members delayed in the trial court rather than expeditiously proceeding to final judgment.
B
Texas courts have no jurisdiction to render advisory opinions. Tex. Ass‘n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993). “The distinctive feature of an advisory opinion is that it decides an abstract question of law without binding the parties.” Id.; see also Tex. Comm‘n on Env‘t Quality v. Maverick County, 642 S.W.3d 537, 549 (Tex. 2022). The legal issues presented in this appeal, however, are not abstract or hypothetical.
Justiciability doctrines like standing, mootness, and ripeness help ensure that courts do not issue advisory opinions. See Patterson v. Planned Parenthood of Hous. & Se. Tex., Inc., 971 S.W.2d 439, 442-43 (Tex. 1998). Cloister does not invoke any of these, and the court of appeals detected no jurisdictional defect. The enjoined board members have standing because the temporary injunction presently restrains their actions, and the court of appeals is empowered to grant relief by dissolving or modifying the injunction. See Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005) (holding that standing requires “a real controversy between the parties” that “will be actually determined by the judicial declaration sought” (quoting Nootsie, Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996))). Because the temporary injunction is currently in effect, presenting a live controversy, the case is not moot. See Heckman v. Williamson County, 369 S.W.3d 137, 162 (Tex. 2012) (“A case becomes moot if . . . the issues presented are no longer ‘live,’ or if the parties lack a legally cognizable interest in the outcome.“). Similarly, the case is ripe for review because the temporary injunction currently restrains the enjoined board members, who have a statutory right to interlocutory review. See Sw. Elec. Power Co. v. Lynch, 595 S.W.3d 678, 683 (Tex. 2020) (holding that a case is not ripe if the “claimed injury is based on ‘hypothetical facts, or upon events that have not yet come to pass‘” (quoting Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 852 (Tex. 2000))). In short, a decision from the court of appeals would bind the parties and resolve an actual controversy; accordingly, such a decision is not advisory.
Further, a court of appeals’ ruling in an appeal from a temporary injunction presents a different inquiry than resolution of the merits of a case in a final judgment. To obtain a temporary injunction, a party must show “(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 v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). An interim ruling decides the legality of the temporary injunction and binds the parties until it is otherwise modified or vacated on final judgment, but it does not conclude the parties’ dispute. See Del Valle Indep. Sch. Dist. v. Lopez, 845 S.W.2d 808, 809 (Tex. 1992).
When an appeal of a temporary injunction involves a question of law, overlap with the issues presented by the underlying merits often occurs. Such a possibility—or even likelihood—does not render an appellate decision on a temporary injunction advisory. A probable right to relief is simply that—probable. An appellate court determination that a party has shown a probable right to relief does not mean that the party obtaining temporary relief will prevail on the merits based on a fully developed record. Concomitantly, if an appellate court determines that a party failed to demonstrate a probable right to temporary relief, the case nonetheless continues, and a party may show facts or present legal arguments ultimately demonstrating that it is entitled to prevail.
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We hold that the court of appeals had jurisdiction over the enjoined board members’ interlocutory appeal of the temporary injunction despite the trial court‘s abatement of proceedings. Without hearing oral argument, see
OPINION DELIVERED: June 7, 2024