STEPHEN L. TATUM State Bar No. 19674500 Cantey Hanger LLP

IN THE FIFTH COURT OF APPEALS
DALLAS, TEXAS
STEVE ROUSE,
Appellant,
VS.
TEXAS CAPITAL BANK, N.A.
Appellee.
INTERLOCUTORY APPEAL FROM THE 162" JUDICIAL DISTRICT COURT
OF DALLAS COUNTY, TEXAS
APPELLEE'S BRIEF
STEPHEN L. TATUM
State Bar No. 19674500
Cantey Hanger LLP
Burnett Plaza, Suite 2100
801 Cherry Street, Unit #2
Fort Worth, Texas 76102
817-877-2800 (Telephone)
817-877-2807 (Fax)
RANDALL K. PRICE
State Bar No. 16303800
JAMES T. PHILLIPS
State Bar No. 00794455
Cantey Hanger LLP
1999 Bryan Street, Suite 3300
Dallas, Texas 75201
214-978-4100 (Telephone)
214-978-4150 (Fax)
ATTORNEYS FOR APPELLEE
ORAL ARGUMENT REQUESTED
5th Court of Appeals
FILED: 8/1/11
14:00
Lisa Matz, Clerk
NO. 05-11-0422-CV
IDENTITY OF PARTIES AND COUNSEL
Pursuant to TEX. R. App . P. 38.1(a), Appellants submit the following list of parties
and counsel:
1.
Steve Rouse 2.
Michael C. Wynne
Wynne & Smith
707 W. Washington Street
P. O. Box 2228
Sherman, TX 75092 Defendant/Appellant
Attorneys for Defendant/ Appellant
3.
Texas Capital Bank, N.A 4.
Randall K. Price
James T. Phillips
Cantey Hanger LLP
1999 Bryan Street, Suite 3300
Dallas, Texas 75201 Attorneys for Plaintiff/Appellee
Stephen L. Tatum
Cantey Hanger LLP
Burnett Plaza, Suite 2100
801 Cherry Street, Unit #2
Fort Worth, Texas 76102 Attorneys for Plaintiff/Appellee
5.
Plaintiff/Appellee
6.
Tri-County Autoplex Defendant
7.
Jerry D. Norfield Defendant
8.
La Vona Ellen Norfield a/kla LaVonna Norfield Defendant
9.
Dwight M. Francis
Aimee Oleson
Gardere Wynne Sewell LLP
1601 Elm Street, Suite 3000
Dallas, Texas 75201 Attorneys for Defendants
Tri-County Autoplex, Jerry D. Norfield and
La Vona Ellen Norfield a/k/a LaVonna Norfield
10. Tommy W. Davis Defendant
11.
William R. Power
Law Office of William R. Power
705 B. North Pacific Street
Attorney for Defendant Tommy W. Davis
Mineola, Texas 75773 12.
Michael S. Calhoun
10827 Hwy 154 South
Yantis, Texas 75497 Pro Se Defendant
Carrie L. Morris
P. O. Box 58
Asher, OK 74826-0058 Pro Se Defendant
13.
Defendant
14.
Automotive Transfers, Inc 15.
John K. Vaughan
Stacey D. Walvoord
Michelle S. Sortor
Vaughan, Ramsey & Walvoord
530 S. Carrier Parkway, Suite 300
Grand Prairie, Texas 75051 16.
William Pope Langdale, 111
William C. Nijem
Langdale Vallotton, LLP
1007 North Patterson Street
P. 0. Box 1547
Valdosta, Georgia 31601 17.
James D. Kayvonfar
18.
Steven J. Berry
Berry, Odom & Bobo LLP
611 9th Avenue
Fort Worth, Texas 76104 Attorneys for Defendant
Automotive Transfers, Inc.
Attorneys for Defendant
Automotive Transfers, Inc.
Defendant
Attorneys for Defendant
James D. Kayvonfar
ii
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL i
INDEX OF AUTHORITIES v
STATEMENT OF THE CASE vii
ISSUES PRESENTED viii
ISSUE NO. 1: Whether the trial court abused its discretion by entering an Order
Granting Plaintiff's Temporary Injunction enjoining Rouse from further
prosecuting his claims as against TCB in the Oklahoma Suit pending final trial in
the court below, in light of the requirements of Paragraph 21 of the Unlimited
Guaranty signed by Rouse?
STATEMENT OF FACTS 1
A.
Objections to Rouse Statement of Facts 1
B.
Underlying Loan Transaction and Default 1
C.
Relevant Procedural History of the Two Lawsuits 3
SUMMARY OF THE ARGUMENT 11
ARGUMENT 13
A,
Standard of Review 13
B.
TCB has Stated Valid Causes of Action Against Rouse 15
C.
TCB has Shown a Probable Right of Recovery Against Rouse 16
1.
Rouse's Oklahoma Claims Arise from the Guaranty 18
2.
Rouse's Estoppel Argument is Misleading and Without Merit 23
3.
Rouse's Oklahoma Claims are Compulsory Counterclaims
in Texas 25
D.
TCB has Shown a Probable, Imminent and Irreparable Injury iii
32
E.
Issuance of the Anti-Suit Injunction Meets the Golden Rule Criteria 34
CONCLUSION AND PRAYER 37
CERTIFICATE OF SERVICE 39
iv
INDEX OF AUTHORITIES
Texas Cases
183/620 Group Joint Venture v. SPF Joint Venture, 765 S,W.2d 901
(Tex. App.—Austin 1989, writ dism'd w.o.j.) 14
Am. Intl Spec. Lines Ins. Co. v. Triton Energy Ltd., 52 S.W.3d 337
(Tex. App.
Dallas 2001, pet. dism'd w.o.j.) Butnaru v. Ford Motor Co., 84 S.W.3d 198, (Tex. 2002) 14, 32, 33, 35
13, 14, 15, 32
Christensen v. Integrity Ins. Co., 719 S.W.2d 161(Tex. 1986) 14, 15, 35
Commint Tech. Servs., Inc. v. Quickel, 314 S.W.3d 646 (Tex. App.—Houston
[14th Dist.] 2010, no pet.) 26, 27
Onty. State Bank v. NSW Invs., LLC, 38 S.W.3d 256 (Tex. App.—Texarkana
2001, pet. dism'd w.o.j) 30
Gannon v. Payne, 706 S.W.2d 304 (Tex. 1986) Golden Rule Ins. Co. v. Harper, 925 S.W.2d 649 (Tex. 1996) 15, 34, 35
14, 33, 34, 35
Graham Mortg. Corp. v. Hall, 307 S.W.3d 472 (Tex. App.—Dallas 2010,
no pet.) 13, 14, 15, 16
In re A1U Ins. Co., 148 S.W.3d 109 (Tex. 2003) In re Intl Profit Assocs., Inc., 274 S.W.3d 672 (Tex. 2009) 36
20, 22
In re Lathe Corp., 307 S.W.3d 314 (Tex. 2010) 18
In re Lyon Fin. Servs., 257 S.W.3d 228 (Tex. 2008) 18
Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203 (Tex. 1999) 26
Jack H. Brown & Co. v. Nw. Sign Co., 718 S.W.2d 397 (Tex. App.—Dallas 1986,
writ red. n.r.e.) 28, 29
Langdale v. Villamil, 813 S.W.2d 187 (Tex. App.—Houston [14 th Dist.] 1991,
no writ) 4
Lesbrookton, Inc. v. Jackson, 797 S.W.2d 276 (Tex. App.—Amarillo 1990,
writ denied) 30
Marshall v. Ford Motor Co., 878 S.W.2d 629 (Tex. App.—Dallas 1994, no writ) 16
Moore v. First Fin. Resolution Enters., Inc., 277 S.W.3d 510 (Tex. App.
Dallas 2009, no pet) 26, 28, 29
My Cafe-CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860 (Tex. App.—Dallas
2003, no pet.) 18, 19
Office of Public Utility Counsel v. Public Utility Commission of Texas,
878 S.W.2d 598 (Tex. 1994); RSR Corp. v. Siegmund, 309 S.W.3d 686 (Tex. App.—Dallas 2010, no pet.) 3,4
19, 20, 21
Rucker v. Bank One Texas, NA., 36 S.W.3d 649 (Tex. App.—Waco 2000,
pet. denied) 30, 31
Tindle v. Jackson Nat'l Life Ins. Co., 837 S.W.2d 795 (Tex. App.—Dallas 1992,
no writ) White Stores, Inc. v. Nowaski, 760 S.W.2d 53 (Tex. App. -Ft. Worth 1988,
no writ) 26
29, 30
Texas Rules
TEX. R. APP. P. 3 8.1(d)
TEX. R. APP. P. 38.1(g)
TEX. R. Civ. P. 97(a) vii
1
26, 27, 29
vi
STATEMENT OF THE CASE
Appellee Texas Capital Bank, N.A. ("Appellee" or "TCB") objects to the
Statement of the Case in the Amended Brief of Appellant Steve Rouse ("Appellant" or
"Rouse"). It does not comply with TEX. R. APP. P. 38.1(d) as it contains no record
references, and the final three paragraphs argue matters outside of the appellate record.
Rouse appeals the trial court's Order Granting Plaintiff's Temporary Injunction enjoining
him from prosecuting his claims against TCB in the District Court in Choctaw County,
Oklahoma, Cause No. CJ-10-50, Rouse v. Texas Capital Bank, et al. (the "Oklahoma
Suit"). (CR, Vol. 1, p. 769) 1 . On April 30, 2010, TCB filed this suit for breach of
contract on a floor plan loan agreement against Tri-County Autoplex ("Tri-County"), an
Oklahoma automobile dealership, and its guarantors, including Rouse, for breach of the
Unlimited Guaranty executed as part of the consideration for this loan program. (CR,
Vol. 1, p. 12). Paragraph 21 of the Unlimited Guaranty provides "the State of Texas shall
have jurisdiction over any and all disputes arising under or pertaining to this Guaranty"
and that venue for any such disputes is in Dallas County, Texas. (CR, Vol. 1, p. 66). In
violation of this provision, Rouse filed the Oklahoma Suit on May 11, 2010. (RR, Vol. 2,
PX 7). After unsuccessfully seeking enforcement of this provision in the Oklahoma trial
and appellate courts, TCB sought the anti-suit injunction granted on April 6, 2011 by the
Honorable Lorraine A. Raggio, Judge of the 162nd Judicial District Court of Dallas
County, Texas, from which Rouse appeals. (CR, Vol. 1, p. 769).
' Citations to the Clerk's Record and the Reporter's Record are noted parenthetically herein in the form (CR, Vol.
p. j and (RR, Vol. , p.
respectively. Admitted Exhibits in the Reporter's Record are noted as PX or DX_.
vii
ISSUES PRESENTED
ISSUE NO. 1
Whether the trial court abused its discretion by entering an Order Granting
Plaintiff's Temporary Injunction enjoining Rouse from further prosecuting his claims as
against TCB in the Oklahoma Suit pending final trial in the court below, in light of the
requirements of Paragraph 21 of the Unlimited Guaranty signed by Rouse?
viii
STATEMENT OF FACTS
A.
Obiections to Rouse Statement of Facts
Appellee objects to the Statement of Facts filed by Rouse, because it does not
comply with
TEX.
R. APP. P. 38.1(g). Specifically, in the first two paragraphs, Rouse
alleges facts outside of the appellate record, which, of course, are not supported by record
references. These paragraphs also contain argument in violation of the cited rule, and
should be disregarded.
B.
Underlying Loan Transaction and Default
On or about August 8, 2007, Tri-County, an Oklahoma general partnership, and
TCB entered into a Floor Plan Loan Agreement under which TCB would provide loans to
Tri-County to purchase inventory in connection with its operation of an automobile
dealership. (CR, Vol. 1, p. 18). The Floor Plan Loan Agreement was supported by a
Revolving Note and a Floor Plan Terms and Security Agreement, both executed as of the
date of the Floor Plan Loan Agreement. (CR, Vol. 1, pp. 36, 42). In addition, TriCounty's partners, Jerry D. Norfield, Steve Rouse and La Vona Ellen Norfield a/k/a
Lavonna Norfield, signed an Unlimited Guaranty effective August 8, 2007. (CR, Vol. 1,
p. 59). Paragraph 2 of the Unlimited Guaranty sets forth the purpose of the Unlimited
Guaranty, to induce TCB into offering the floor plan loan program to Tri-County:
Obligations. As an inducement to Bank to extend or continue to
extend credit and other financial accommodations to Borrower, Guarantor,
jointly and severally with each other Guarantor, and for value received,
does hereby unconditionally and absolutely guarantee the prompt and full
payment and performance of the Guaranteed Indebtedness when due or
declared to be due and at all times thereafter.
- 1-
(CR, Vol. 1, p. 60).
In order to induce TCB into lend to Tri-County, its partners, Jerry D. Norfield,
Steve Rouse and La Vona Ellen Norfield alk/a Lavonna Norfield, signed the Unlimited
Guaranty, and thereby became personal guarantors of Tri-County's debt under the terms
of the floor plan loan program. (CR, Vol. I, p. 68). The Floor Plan Loan Agreement and
the Revolving Note were each subsequently modified on several occasions by the parties,
but the Unlimited Guaranty, and the guarantors' obligations thereunder, were not affected
by these modifications. (CR, Vol. I, pp. 25-35, 38-41). In addition to the financial
obligations that these individuals assumed under the Unlimited Guaranty, Paragraph 21
of the Unlimited Guaranty to which each agreed provided as follows:
Venue. This Guaranty has been entered into in the county in Texas
where Bank's address for notice purposes is located, and it shall be
performable for all purposes in such county. Courts within the State of
Texas shall have jurisdiction over any and all disputes arising under or
pertaining to this Guaranty and venue for any such disputes shall be in the
county . or judicial district where Bank's address for notice purposes is
located.
(CR, Vol. 1, p. 66).
On or about April 7, 2010, Tri-County defaulted on its obligations arising under
the floor plan loan program, including, but not limited to, its repayment obligations, and
TCB gave notice of default and acceleration of all amounts due by letter dated April 7,
2010. (CR, Vol. 1, p. 69). TCB has accelerated all principal, interest and other payments
due, as is its right under the terms of the floor plan loan program. (CR, Vol. 1, p. 70).
Tri-County has wholly failed to pay all amounts due to TCB, which exceed $6 million,
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and the guarantors have wholly failed to satisfy the obligations of Tri-County under the
terms of the Unlimited Guaranty. (RR, Vol. 1, p. 22).
TCB filed suit in the court below on April 30, 2010, asserting breach of the floor
plan loan program against Tri-County and breach of the Unlimited Guaranty against the
guarantors by way of their failure to satisfy the obligations of Tri-County. (CR, Vol. 1, p.
12). On May 11, 2010, Rouse filed the Oklahoma Suit against TCB and others, alleging
that the defendants in the Oklahoma Suit, including TCB, engaged in a scheme to defraud
him. (RR, Vol. 2, PX 7).
C.
Relevant Procedural History of the Two Lawsuits
As noted above, Rouse has taken liberties with the appellate record in his
Statement of the Case, in order to argue in the final three paragraphs that TCB decided to
"escalate" the Oklahoma Suit after the issuance of the Temporary Injunction by
conducting discovery and filing various motions therein to the prejudice of Rouse.
Rouse's Amended Brief at p. 2. Appellee has objected to this abuse of the Statement of
the Case by Rouse. However, to the extent this Court is inclined to consider Rouse's
improper statements, TCB requests the Court take judicial notice of the contents of its
Appendix cited in items 38-40 below, which will explain the reasons TCB had to
continue to defend itself in the Oklahoma Suit, namely that Rouse immediately violated
the Temporary Injunction after its issuance. An appellate court has the power to take
judicial notice of matters in the public record for the first time on appeal, and must do so
if requested by a party and the court is supplied with the necessary information. Office of
3
Public Utility Counsel v. Public Utility Commission of Texas, 878 S.W.2d 598, 600 (Tex.
1994); Langdale v. Villamil, 813 S.W.2d 187, 189-190 (Tex. App.—Houston [14 th Dist.]
1991, no writ). As set forth below, immediately after the trial court signed the Order
Granting Plaintiff's Temporary Injunction, Rouse made three filings in the Oklahoma
Suit in defiance of the same, which resulted in the Oklahoma trial judge entering an order
advising the parties to the Oklahoma Suit to disregard the Temporary Injunction issued
by the court below. TCB's conduct in continued defense of the Oklahoma Suit, of which
Rouse complains in his Statement of the Case, and of which there is no evidence in the
appellate record, was made necessary by Rouse's conduct, and the resultant order issued
by the Oklahoma trial court.
The following are significant procedural events which occurred in the trial court
below and in the Oklahoma Suit, and which were made part of the record of the hearing
on TCB's Application for Temporary Injunction. What is clear from the history below is
that, at the time of the issuance of the injunction which is the subject of this appeal,
Rouse was acting in violation of Paragraph 21 of the Unlimited Guaranty he signed to
induce to TCB to enter into the Floor Plan Loan Agreement, without which Tri-County
would not have been able to do business.
1.
TCB filed Plaintiff's First Original Petition in the court below on April 30,
2010, for breach of contract against Tri-County and its guarantors. (RR, Vol. 2, PX 6).
4
2.
011 May 11, 2010, Rouse filed the Oklahoma Suit against TCB and others,
alleging that he was defrauded in connection with the floor plan loan program. (RR, Vol.
2, PX 7).
3.
TCB filed its First Amended Petition in the court below on June 14, 2010,
adding causes of action arising from a scheme to defraud it by Tri-County, its guarantors,
and others. (RR, Vol. 2, PX 10).
4.
On June 15, 2010, in the Oklahoma Suit, TCB filed its Special Appearance
and Motion to Quash Service and Dismiss Case with Brief in Support, arguing that it had
been improperly served, and that the court below had dominant jurisdiction over the
matter as a result of TCB's first-filed suit in Texas. (RR, Vol. 2, PX 11).
5.
Rouse filed his Brief in Opposition to TCB's Motion to Quash Service and
Dismiss case in the Oklahoma Suit on July 2, 2010. (RR, Vol. 2, PX 12).
6.
Rouse filed his Pro Se Answer of Steve Rouse to Plaintiffs First Amended
Petition in the court below on July 14, 2010, which included counterclaims based on the
same allegations he had made in the Oklahoma Suit. (RR, Vol. 2, PX 13).
7.
TCB filed its Second Amended Petition in the Texas trial court, amending
the address for service of certain Defendants therein, on August 6, 2010. (RR, Vol. 2, PX
14).
8.
The court in the Oklahoma Suit entered an Order Denying TCB's Motion to
Quash and Dismiss Case on August 19, 2010. (RR, Vol. 2, PX 15).
5
9.
On September 2, 2010, the court below issued its Level 2 Scheduling
Order, setting the Texas case for trial on June 6, 2011. (RR, Vol. 2, PX 16).
10.
On September 13, 2010, TCB filed in the Oklahoma Suit its Application to
Vacate, Modify and/or Certify Interlocutory Order for Appeal, seeking a reversal of the
trial court's August 19 order on the grounds that Rouse's claims were mandatory
counterclaims in the earlier-filed Texas case, or alternatively, seeking certification of said
order for interlocutory appellate review on these grounds. (RR, Vol. 2, PX 17).
11.
On September 13, 2010, TCB filed its Answer in the Oklahoma Suit,
subject to the relief sought in its Application to Vacate, Modify and/or Certify
Interlocutory Order for Appeal. (RR, Vol. 2, PX 18).
12.
On September 27, 2010, Rouse filed his Brief in Opposition to TCB's
Application to Vacate/Modify/Certify in the Oklahoma Suit. (RR, Vol. 2, PX 19).
13.
On September 30, 2010, attorney Mike Wynne filed his Notice of
Appearance and Designation of Lead Counsel for Defendant Steve Rouse in the court
below. (RR, Vol. 2, PX 20),
14, On September 30, 2010, Rouse also filed his First Amended Original
Answer to Plaintiffs First Amended Original Petition in the Texas case, generally
denying the allegations of TCB. (RR, Vol. 2, PX 21).
15. Rouse filed Plaintiffs Application for Scheduling Order in the Oklahoma
Suit on November 5, 2010, seeking a jury trial on that court's May 16, 2011, trial docket.
(RR, Vol. 2, PX 22).
6
16.
On November 10, 2010, TCB filed its Objection to Plaintiffs Application
for Scheduling Order in the Oklahoma Suit, citing, inter alia, the proposed schedule's
interference with the Level 2 Scheduling Order entered in the Texas case by the trial
court below. (RR, Vol. 2, PX 23).
17.
TCB also filed its Motion for Judgment on the Pleadings or for Stay of
Claims, with Brief in Support, in the Oklahoma Suit on November 10, 2010, asserting
that the Oklahoma suit should be dismissed or stayed because of the pendency of the
first-filed Texas case, as well as the fact that Rouse entered into an enforceable
jurisdiction and venue provision set forth in Paragraph 21 of the Unlimited Guaranty.
(RR, Vol. 2, PX 24).
18.
On November 22, 2010, Rouse filed his Reply in Support of his
Application for Scheduling Order in the Oklahoma Suit. (RR, Vol. 2, PX 25).
19.
On December 1, 2010, Rouse filed his Response to TCB's Motion for
Judgment on the Pleadings in the Oklahoma Suit. (RR, Vol. 2, PX 26).
20.
The court entered an Order Denying TCB's Application to Vacate, Modify
or Certify and Denying TCB's Motion for Judgment on the Pleadings in the Oklahoma
Suit on December 7, 2010. (RR, Vol. 2, PX 27).
21.
Also on December 7, 2010, the court in the Oklahoma Suit entered a
Scheduling Order with a trial setting of June 13, 2011, one week after the initial trial
setting in the Texas case set forth in the Level 2 Scheduling Order issued by the court
below. (RR, Vol. 2, PX 28).
7
22.
On December 27, 2010, TCB filed a Petition for Writ of Prohibition in the
Oklahoma Supreme Court, seeking reversal of the orders of the Oklahoma trial court on
the grounds that jurisdiction was proper and exclusive in the Texas trial court on the basis
of the first-filed doctrine and by virtue of Paragraph 21 of the Unlimited Guaranty. (RR,
Vol. 2, PX 32).
23.
Also on December 27, 2010, TCB filed its Emergency Application to
Oklahoma Supreme Court for Stay, seeking a stay of the Oklahoma Suit pending the
resolution of the jurisdictional matters. (RR, Vol. 2, PX 29).
24.
On January 3, 2011, the Oklahoma Supreme Court denied TCB's
Emergency Application for Stay. (RR, Vol. 2, PX 36).
25.
On January 14, 2011, Rouse filed his First Motion for Continuance in the
court below, seeking a continuance from the June 6, 2011, setting in the Texas case on
grounds, inter alia, that counsel had a conflict on that date and that the volume of
documents produced in discovery in the Texas case was such that Rouse could not be
ready to try his case on that setting. (RR, Vol. 2, PX 37).
26.
On January 18, 2011, Rouse filed his Brief in Response to Application and
Petition for Writ of Prohibition in the Oklahoma Supreme Court. (RR, Vol. 2, PX 38).
27.
On February 7, 2011, the Oklahoma Supreme Court entered an
interlocutory Order denying TCB's Application to Assume Original Jurisdiction. (RR,
Vol. 2, PX 40).
8
28.
On February 10, 2011, the court below entered its Order granting
Defendant Steve Rouse's First Motion for Continuance, which removed the case below
from the trial court's June 6, 2011, and ordered the parties to submit an Agreed
Scheduling Order. (RR, Vol. 2, PX 41).
29.
On February 24, 2011, having exhausted all of its available legal remedies
in Oklahoma, TCB filed its Supplement to Plaintiffs Second Amended Petition in the
court below, seeking, inter alia, the issuance of a Temporary Anti-Suit Injunction. (RR,
Vol. 2, PX 42).
30.
On March 10, 2011, TCB sought a continuance of the trial setting in the
Oklahoma Suit. (RR, Vol. 2, PX 43).
31.
Taking a position inconsistent with the representations made in the court
below in seeking a continuance from the June 6, 2011 trial setting, Rouse vehemently
opposed a continuance in the Oklahoma Suit, filing his original objection on March 16,
2011, and a Surreply to TCB's Reply, both filed on March 17, 2011. (RR, Vol. 2, PXs
45-47 ).
32.
On March 18, 2011, the parties submitted an Agreed Scheduling Order in
the court below, resetting the Texas case to the November 7, 2011, trial docket. (RR,
Vol. 2, PX 48).
33.
On March 29, 2011, the Oklahoma trial court entered a Minute Order
denying TCB's requested continuance in the Oklahoma Suit. (RR, Vol. 2, PX 49).
9
34.
TCB's Application for Anti-Suit Injunction was heard in the trial court
below on April 4, 2011. (RR, Vol. 1, p. 1).
35.
On April 5, 2011, the court below signed an Order Granting Plaintiffs
Temporary Injunction which is the subject of this appeal, pending the deposit of a $5,000
bond by TCB with the Clerk. (CR, Vol. 1, p. 769).
36.
On April 6, 2011, TCB deposited the required bond in support of the
Temporary Injunction issued in favor of TCB by the court below and the Temporary
Injunction issued. (CR, Vol. 1, p. 775, Appendix A).
37.
Also on April 6, 2011, Rouse filed his Notice of Accelerated Appeal of
Order Granting Plaintiffs Temporary Injunction, perfecting the instant appeal. (CR, Vol.
1,p. 776).
38.
Also on April 6, 2011 Rouse filed a Motion for Order Permitting Steve
Rouse to Continue his Case in Oklahoma in the Oklahoma Suit. Attached as an exhibit to
this document was a copy of the Order Granting Plaintiffs Temporary Injunction signed
by the Court below, which is the subject of this appeal. TCB requests the Court take
judicial notice of this filing by Rouse, which can be verified in the Oklahoma public
records at www.ocdr.com, and which is contained in TCB's Appendix hereto. (Appendix
B).
39.
Also on April 6, 2011 Rouse filed a Motion for Sanctions Against
Defendant Texas Capital Bank and its Counsel Leif Swedlow in the Oklahoma Suit.
Attached as an exhibit to this document was a copy of the Order Granting Plaintiffs
-10-
Temporary Injunction signed by the Court below, which is the subject of this appeal.
TCB requests the Court take judicial notice of this filing by Rouse, which can be verified
in the Oklahoma public records at www.ocdr.com, and which is contained in TCB's
Appendix hereto. (Appendix C).
40.
Also on April 6, 2011 Rouse filed Plaintiffs Motion for Injunction and
Temporary Restraining Order (ex parte) in the Oklahoma Suit, seeking to enjoin the Bank
from any conduct in furtherance of its rights under the Order Granting Plaintiffs
Temporary Injunction signed by the Court below, which is the subject of this appeal.
TCB requests the Court take judicial notice of this filing by Rouse, which can be verified
in the Oklahoma public records at www.ocdr.com, and which is contained in TCB's
Appendix hereto. (Appendix D).
41.
On April 7, 2011 in the Oklahoma Suit, Judge Willard Driesel entered an
Order Governing Further Proceedings in this Case. In that order Judge Driesel stated his
opinion that the Temporary Injunction issued by the Court below was not binding on him
or the parties in the Oklahoma Suit, and further directed the parties in the Oklahoma Suit
to continue to follow all deadlines set by his Scheduling Order in the Oklahoma Suit.
(CR, Vol. 1, p. 802).
SUMMARY OF THE ARGUMENT
The entry of the Order Granting Plaintiffs Temporary Injunction by the trial court
was not an abuse of its discretion, and should be affirmed by this Court. The trial court
recognized that Paragraph 21 of the Unlimited Guaranty contained an enforceable
consent to Texas jurisdiction and venue in Dallas County by Rouse. It further recognized
that the claims asserted by Rouse in the Oklahoma Suit arose from the relationship
between TCB and Rouse as established by the Unlimited Guaranty—but for the
Unlimited Guaranty, TCB would have no relationship with Rouse whatsoever, nor would
TCB have been induced to provide the floor plan loan program to Tri-County. His
estoppel argument to the contrary is based on misstatements he attempts to attribute to
TCB in connection with a wholly unrelated matter, and otherwise has no evidentiary
support in the record.
In fact, the claims asserted by Rouse in the Oklahoma Suit are compulsory
counterclaims in response to the breach of contract claim asserted against him by TCB
under the Unlimited Guaranty. Moreover, Rouse's conduct in seeking a continuance in
the Texas case, based in part on an apparent misrepresentation about his inability to
prepare for trial due to the volume of documents produced by TCB, and vigorously
opposing one in the Oklahoma Suit, where TCB produced the same volume of documents
in discovery, constituted a "race to judgment" designed to render the provisions of
Paragraph 21 of the Unlimited Guaranty meaningless. Paragraph 21 of the Unlimited
Guaranty is a valuable contract right of TCB which would be rendered moot in the
absence of an order enjoining Rouse from prosecuting his claims in the Oklahoma Suit
against TCB on the current schedule in that case.
TCB exhausted all of its pre-trial legal remedies in the courts of Oklahoma,
attempting to get those courts to stay the Oklahoma Suit as against TCB because, inter
-12-
alia, of the effect of Paragraph 21 of the Unlimited Guaranty, before it sought the
injunction which is the subject of this appeal. Every court denied the relief sought by
TCB, except the Oklahoma Supreme Court, which in an interlocutory ruling refused to
assume jurisdiction over the question. The evidence considered by the trial court in the
hearing below was sufficient to establish that TCB had a cause of action against Rouse, a
probable right of recovery against Rouse, and a probable, imminent, and irreparable
injury in the interim. Having been rebuffed by the Oklahoma courts, TCB had no
adequate remedy at law. Accordingly, the trial judge acted within sound discretion to
enjoin Rouse from prosecuting his claims against TCB in the Oklahoma Suit in violation
of Paragraph 21 of the Unlimited Guaranty, and should be affirmed.
ARGUMENT
A.
Standard of Review
Whether to grant or deny a temporary injunction is within the sound discretion of
the trial court, and therefore reviewed for an abuse of discretion. Butnaru v. Ford Motor
Co., 84 S.W.3d 198, 204 (Tex. 2002); Graham Mortg. Corp. v. Hall, 307 S.W.3d 472,
478 (Tex. App. Dallas 2010, no pet.). An appellate court "may not substitute its
judgment for that of the trial court and determine the trial court abused its discretion by
granting injunctive relief unless the trial court's action was so arbitrary that it exceeded
the bounds of reasonable discretion." Graham, 307 S.W.3d at 477, citing Butnaru, 84
S.W.3d at 204. Under this standard, the appellate court must view the evidence in the
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light most favorable to the trial court's order and indulge every reasonable inference in its
favor. Id.
An applicant for a temporary injunction must plead and prove (1) a cause of action
against the defendant, (2) a probable right to recovery, and (3) a probable, imminent, and
irreparable injury in the interim. Butnaru, 84 S.W.3d at 204; Graham, 307 S.W.3d at
477. A "probable right to recovery" requires only that the appellee show "that a bona
fide issue exists as to his right to ultimate relief." 183/620 Group Joint Venture v. SPF
Joint Venture, 765 S.W.2d 901, 904 (Tex. App.—Austin 1989, writ dism'd w.o.j.). The
applicant is not required to establish that he will prevail upon final trial. Graham, 307
S.W.3d at 477. A trial court does not abuse its discretion if the applicant pleads a cause
of action and presents some evidence tending to support that cause of action, or where the
trial court bases its decision on conflicting evidence. Id. at 478.
There is no question that Texas courts are empowered to issue injunctions to
prevent parties from proceeding with litigation in a sister state, but principles of comity
dictate that courts exercise this power only sparingly, and in very special circumstances.
Christensen v. Integrity Ins. Co., 719 S.W.2d 161, 163 (Tex. 1986); Am. Intl Spec. Lines
Ins. Co. v. Triton Energy Ltd., 52 S.W.3d 337, 340 (Tex. App. Dallas 2001, pet. dism'd
w.o.j.). An anti-suit injunction is appropriate in the following four instances: (1) to
address a threat to the court's jurisdiction; (2) to prevent the evasion of important public
policy; (3) to prevent a multiplicity of suits; or (4) to protect a party from vexatious or
harassing litigation. Golden Rule Ins. Co. v. Harper, 925 S.W.2d 649, 651 (Tex. 1996),
-14-
citing Gannon v. Payne, 706 S.W.2d 304, 307 (Tex. 1986). The standard of appellate
review for an anti-suit injunction is the same as for any other injunction, the abuse of
discretion standard. Gannon, 706 S.W.2d at 305; Christensen, 719 S.W.2d at 163.
B.
TCB has Stated Valid Causes of Action Against Rouse
The first element an applicant must show to demonstrate entitlement to injunctive
relief is a cause of action against the party sought to be enjoined. Butnaru, 84 S.W.3d at
204; Graham, 307 S.W.3d at 477. TCB has stated valid causes of action against Rouse
arising under the terms of the Unlimited Guaranty which support this element. First, on
April 30, 2010, TCB filed Plaintiffs First Original Petition in the court below, prior to
the existence of any lawsuit in Oklahoma, in which it alleged that Rouse breached the
Unlimited Guaranty by failing to satisfy the obligations of Tri-County after its default
under the floor plan loan program. (CR, Vol. 1, p. 12).
In addition to the financial obligations it imposed on Rouse, the Unlimited
Guaranty, in Paragraph 21, also subjected him to the jurisdiction of Texas courts and
obligated him to litigate his claims against TCB in Dallas County, Texas. (CR, Vol. 1, p.
66). On May 11, 2010, Rouse filed the Oklahoma Suit in direct contravention of and to
avoid the requirements of Paragraph 21. (RR, Vol. 2, PX 7). After exhausting its legal
remedies in the Oklahoma courts seeking dismissal of Rouse's claims, TCB filed
Plaintiffs Supplement to Second Amended Petition on February 24, 2011, in which it
added a second breach of contract claim against Rouse under the Unlimited Guaranty for
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his violation of Paragraph 21, as well as its application for the anti-suit injunction which
Rouse now appeals. (RR, Vol. 2, PX 42).
The foregoing pleadings were admitted into evidence at the Temporary Injunction
hearing on April 4, 2011, and the trial court specifically recognized the claims brought
under the Unlimited Guaranty in the findings and conclusions enumerated in the Order
Granting Plaintiff's Temporary Injunction. (CR, Vol. 1, p. 769). Viewing the evidence
in the light most favorable to the trial court's order as mandated by Graham, supra, the
trial court did not abuse its discretion in issuing the requested injunction by reason of a
failure of TCB to state a valid cause of action against Rouse.
C.
TCB has Shown a Probable Right of Recovery Against Rouse
In order to recover under a guaranty, a plaintiff must show proof of: (1) the
existence and ownership of the guaranty; (2) the terms of the under lying contract by the
holder; (3) the occurrence of the conditions upon which liability is based; and (4) the
failure or refusal to perform the promise by the guarantor. Marshall v. Ford Motor Co.,
878 S.W.2d 629, 631 (Tex. App.—Dallas 1994, no writ). In the hearing on April 4,
2011, all of the loan documents and the Unlimited Guaranty were admitted into evidence.
(RR, Vol. 2, PXs 6A-6D). The trial court heard testimony from TCB Executive Vice
President Bruce Shilcutt that the Tri-County loan was in default and that the outstanding
balance due exceeded $6 million. (RR, Vol. 1, p. 22). At the hearing Mr. Rouse testified
that he was a guarantor under the floor plan loan program. (RR, Vol. 1, p. 73). The trial
court considered ample evidence showing that TCB had a probable right of recovery for
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the debt secured by Rouse and his partners under the Unlimited Guaranty, and it was not
an abuse of discretion to issue the Temporary Injunction in light of this evidence.
Moreover, Paragraph 21 of the Unlimited Guaranty contained a mandatory forum
selection provision subjecting Rouse to the jurisdiction of Texas courts, and requiring
him to litigate all "all disputes arising under or pertaining to this Guaranty...in the county
or judicial district where Bank's address for notice purposes is located." (CR, Vol. 1, p.
66). TCB's address for notice purposes was set forth in Paragraph 1(a) of the Unlimited
Guaranty and is located in Dallas County, Texas. (CR, Vol. 1, p. 59). Based on the
foregoing evidence, the trial court found specifically that TCB would likely prevail on its
claim of Rouse's breach of the provisions of Paragraph 21 of the Unlimited Guaranty.
(CR, Vol. 1, p. 770). TCB would show that the evidence supports the trial court's
conclusion and that, based on this evidence, the issuance of a Temporary Injunction was
not an abuse of discretion.
The main thrust of Rouse's argument on appeal focuses on Paragraph 21 of the
Unlimited Guaranty, Rouse asserts that his claims in the Oklahoma Suit against TCB
should not be enjoined because they are tort claims which do not arise under the
Unlimited Guaranty. As set forth below, the language of the Unlimited Guaranty, and the
fact that Rouse's Oklahoma claims constitute compulsory counterclaims to TC13's Texas
suit on the Unlimited Guaranty (see discussion beginning infra at p. 25), compel the
opposite conclusion.
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1.
Rouse's Oklahoma Claims Arise from the Guaranty.
Forum selection clauses are generally and presumptively enforceable. In re Laibe
Corp., 307 S.W.3d 314, 316 (Tex. 2010). By entering into an agreement having a forum
selection clause, the parties effectively represent to each other that the agreed forum is
not so inconvenient that enforcing the clause will deprive either party of its day in court,
whether for cost or other reasons. Id. Absent proof of "special and unusual
circumstances," trial in a contractually designated forum, by agreement, is not "so
gravely difficult and inconvenient" as to warrant disregarding the agreed upon forum. Id.
Consequently, the party seeking to avoid the effect of a contractual forum selection has a
heavy burden of proof to overcome his agreement. Id. Parties to a contract have an
obligation to protect themselves by reading what they sign and, absent a showing of
fraud, cannot excuse themselves from the consequences of failing to meet that obligation,
In re Lyon Fin. Servs., 257 S.W.3d 228, 233 (Tex. 2008). Rouse's claims in the
Oklahoma Suit allege fraud, but not that he was defrauded into entering the Unlimited
Guaranty, including Paragraph 21. (RR, Vol. 2, PX 7).
Rouse argues that the tort claims he has asserted against TCB in the Oklahoma
Suit are exempt from Paragraph 21 because they are not "disputes arising under or
pertaining to this Guaranty" as contemplated therein. Rouse's Amended Brief at p. 11.
A review of the law of this Court construing similar forum selection clauses belies such a
conclusion. In My Cafe-CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860 (Tex, App.—
Dallas 2003, no pet,), this Court considered whether a forum selection clause was
-18-
unenforceable, inter cilia, because the agreement in which it was contained had allegedly
been fraudulently induced. There the plaintiff alleged the defendant had fraudulently
misrepresented the profitability of the franchise in order to induce it to enter the
agreement. Id. at 866. The forum selection clause in question governed "any dispute
arising under or in connection with" the agreement, including any claim affecting its
validity. Id. The Court held that the forum selection clause was sufficiently broad to
include claims of fraudulent inducement. Id. at 866-867.
A similar opinion was rendered by this Court just last year in RSR Corp. v.
Siegmund, 309 S.W.3d 686 (Tex. App. Dallas 2010, no pet.). RSR Corp. involved the
construction of two venue clauses, the first in a 2003 manufacturing agreement between
RSR and Inppamet, which provided, in pertinent part, as follows:
The parties hereby submit to the jurisdiction of any State court or Federal
court of the United States of America sitting in Dallas, Texas, U.S.A., and
any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement....
Id. at 694.
A subsequent confidentiality agreement entered between the parties in 2007
contained a venue clause providing that all disputes "arising hereunder" would be settled
in the courts of Santiago, Chile. Id. at 695. The issue in this case turned on which venue
provision was applicable, and this Court considered the law on forum selection clauses in
making the determination. Id. at 699-700. Under that body of law, a court must
determine whether the clause applies to the claims asserted in the lawsuit. Id. at 700.
This requires a "common sense examination of the claims and the forum selection clause
-19-
to determine if the clause covers the claims." Id., quoting In re Int'l Profit Assocs., Ina,
274 S.W.3d 672, 677 (Tex. 2009). Accordingly, this Court focused on the breadth of the
language used in the forum selection clauses. The 2007 clause, based on the "arising
hereunder" language, was found to be narrow, and applying "only if appellants are suing
on rights or obligations that are created by the 2007 agreements." RSR Corp., 309 S.W.
3d at 701. This Court found that the 2003 consent-to-jurisdiction clause, on the other
hand, encompassed a much broader spectrum of matters:
In contrast, the consent-to-jurisdiction clause contained in the 2003
agreement applies to "any action or pursuit arising out of or relating to this
Agreement" and provides that those claims may be heard in state or federal
court sitting in Dallas, Texas, Courts interpreting similar language
conclude that such clauses are broad and encompass all claims that have
some possible relationship with the agreement, including those claims that
may only "relate to" the agreement. ... "The phrase 'relates to' in
particular, is recognized as a very broad term." ... Thus, the 2003
Agreement's jurisdictional clause applies if the claims at issue arise under
or have a connection with the agreement.
Id. (internal citations omitted).
This Court then considered the pleadings to determine which venue clause was
applicable. "After making a common-sense examination of the claims and the relevant
jurisdictional clauses, we conclude that the appellants' claims arise out of or relate to the
2003 Agreement and therefore fall within the consent-to-jurisdiction clause designating
Dallas, Texas as the proper forum." Id. at 704.
The same conclusion is warranted in this case. Paragraph 21 of the Unlimited
Guaranty subjects Rouse to the jurisdiction of Texas courts and fixes venue in Dallas
County for "any and all disputes arising under or pertaining to this Guaranty...." (CR,
-20-
Vol. 1, p. 66). The phrase "pertaining to" is particularly broad, similar to the phrase
"relates to" considered by this Court in RSR Corp. Considering the pleadings, Rouse's
Petition in the Oklahoma Suit references his status as guarantor several times in support
of the claims asserted against TCB therein. (RR, Vol. 2, PX 7). Moreover, all of Rouse's
claims in the Oklahoma Suit allege improper conduct on the part of TCB in its
administration of the floor plan loan program, and Paragraph 2 of the Unlimited Guaranty
confirms that it was given by Rouse in order to induce TCB, and thus as consideration
for, TCB's agreement "to extend or continue to extend credit and other financial
accommodations" to Tri-County. (CR, Vol. 1, p. 60). The plain language of the
Unlimited Guaranty confirms that, absent the Unlimited Guaranty, there would have been
no extension of credit by TCB to Tri-County, and the claims asserted by Rouse against
TCB would therefore have never come into existence.
The trial court specifically found that Rouse filed the Oklahoma Suit "on the same
issues over which this Court has jurisdiction in this cause" and that "Texas has a strong
public policy in favor of enforcing contractual forum selection clauses" which would be
evaded if Rouse is allowed to proceed in the Oklahoma Suit. (CR, Vol. 1, pp. 770, 771).
The cases cited above are consistent with the trial court's findings and support the
issuance of the Temporary Injunction. Equally important is what the trial court did not
hear—there is no evidence that Rouse, individually, has any relationship whatsoever with
TCB apart from the Unlimited Guaranty. Where the only relationship between Rouse
and TCB is embodied in the contract, then all claims, however pled, arise from the
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contract for purposes of evaluating a forum selection clause. In re Intl Profit Assocs.,
274 S.W.3d at 678 (where one party claims no relationship with the other apart from the
contract, "the claims and alleged damages arise from the contractual relationship between
the parties, not from general obligations imposed by law.").
Since the issuance of the Temporary Injunction by the court below Rouse has
dismissed several claims against TCB in the Oklahoma Suit. The remaining claims
against TCB in the Oklahoma Suit are for fraud, constructive fraud/estoppel by silence,
and civil conspiracy. The factual basis for the fraud and conspiracy claims Rouse makes
are that TCB participated with others to extend funding under the terms of the floor plan
loan program using fraudulent Manufacturer's Certificates of Origin (commonly
referenced in the automotive industry as Manufacturer's Statements of Origin, or
"MSOs"). (RR, Vol. 2, PX 7). However, Rouse induced the floor plan loan program
under which the alleged fraud took place by agreeing to and signing the Unlimited
Guaranty. (CR, Vol. 1, p. 60). Without the Unlimited Guaranty, there would be no floor
plan loan program funding at all, thus those claims undoubtedly arise from or pertain to
the guaranty. The claims for constructive fraudlestoppel by silence brought by Rouse in
the Oklahoma Suit are that TCB had some duty to disclose its knowledge about the
"fraud, theft and embezzlement" being undertaken with respect to the floor plan loan
program by virtue of the fact that it had "required Mr. Rouse to personally guaranty [sic]
the line of credit." (RR, Vol. 2, PX 7 at p.12). These allegations on their face arise from
or relate to the Unlimited Guaranty. At the hearing below, the trial court heard Mr.
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Rouse confirm that his Oklahoma claims were "that someone used those MSOs to obtain
money from the bank of which [he was] a guarantor," directly linking his claims to his
status as guarantor. (RR, Vol. 1, p. 73). In short, all of the claims asserted by Rouse
against TCB in the Oklahoma Suit clearly either "arise from" or "pertain to" the
Unlimited Guaranty. Thus, TCB has met its burden to show a probable right of recovery
for Rouse's violation of Paragraph 21 of the Unlimited Guaranty, and the issuance of the
injunction should be affirmed in this regard.
2.
Rouse's Estoppel Argument is Misleading and Without Merit.
The second argument made by Rouse in support of his position that the claims he
has asserted in the Oklahoma Suit do not arise from the Unlimited Guaranty is an
estoppel argument, Specially, he asserts that "TCB has itself admitted that the two cases
are not identical, and should be estopped from now taking a different position." Rouse's
Amended Brief at p. 7. This argument is based on the contents of Plaintiffs Response to
Motion to Stay of Defendant Automotive Transfers, Inc. ("ATI") filed by TCB in the
court below. (RR, Vol. 2, DX 6). In order to see the specious nature of this argument,
however, this Court need look no further than the fact that in order to make it, Rouse has
intentionally misquoted TCB's Response to ATI in his Amended Brief not once, but
twice.
Initially, Rouse alleges that TCB represented to the trial court in its Response to
ATI that "the two lawsuits allege two different and distinct injuries occurred in two
different jurisdictions, that will in all likelihood have significant factual distinctions."
- 23 -
Rouse's Amended Brief at p. 5. Two pages later, Rouse alleges that TCB stated in its
Response to ATI that the two lawsuits "allege two different and distinct injuries
occurring in two different jurisdictions, which will in all likelihood have significant
factual distinctions." Rouse's Amended Brief at p. 7. What TCB actually said in
response to ATI's arguments in its Motion to Stay, which were based on principles of
comity and dominant jurisdiction, is not at all what is "quoted" by Rouse in his Amended
Brief, but related to the differences between the two suits as they were significant to the
claims asserted against ATI in each:
In addition, considerations of comity should not come into play in a
situation where the two lawsuits allege two different injuries occurring in
two different jurisdictions. The Rouse lawsuit in Oklahoma alleges that
ATI defrauded Rouse, a resident of Oklahoma. In the instant case, the
allegations are that ATI participated in a conspiratorial scheme in Texas,
the object of which was to fraudulently induce Plaintiff into advancing
floor plan loan funds for phantom automobiles.
In addition, these are two fraud claims against ATI that are clearly
made in support of recovery sought for two distinct injuries, and will in all
likelihood have significant factual distinctions. In his case in Oklahoma,
Rouse complains of injury in the form of the loss of his business and
business income as a result of, inter alia, the fraudulent conduct of ATI.
Here, Plaintiff seeks recovery of its loss in the form of fraudulently induced
advances which have not been repaid.
(RR, Vol. 2, DX 6 at pp. 3-4).
What Rouse has done is dubious—taking portions of two quotes in two separate
paragraphs in TCB's Response to ATI's Motion to Stay, then combining them to form a
single "quote," then offering the result to this Court completely out of context, in the
hopes that he can prop up an estoppel argument that otherwise has no factual support.
Nothing stated by TCB in its Response to ATI relating to the nature of the claims asserted
24
against ATI in the two proceedings is in any way contrary to the arguments made to the
trial court in support of the issuance of the Temporary Injunction, nor to any arguments
made herein to this Court. The fact that the claims asserted in the two suits against ATI
are different has no bearing on the issue of whether the claims asserted by Rouse against
TCB in the Oklahoma Suit arise from the Unlimited Guaranty. Rouse was not a party to
the ATI Motion to Stay, offered no evidence or argument to the court below that he
detrimentally relied on the contents of TCB's Response in any way, and simply cannot
support his estoppel argument before this Court. The claims by and between TCB and
Rouse in the court below and in the Oklahoma Suit all have their genesis in the lenderborrower relationship between TCB and Tri-County, a relationship that would not have
existed had Rouse and his fellow guarantors not executed the Unlimited Guaranty as "an
inducement to Bank to extend or continue to extend credit and other financial
accommodations" to Tri-County. (CR, Vol. 1, p. 60). Rouse's estoppel argument is
without merit.
3.
Rouse's Oklahoma Claims are Compulsory Counterclaims in Texas.
Another way to verify that the claims asserted by Rouse against TCB in the
Oklahoma Suit "arise from" or "pertain to" the Unlimited Guaranty and are thus properly
adjudicated in the court below is that they are compulsory counterclaims to the first-filed
breach of the Unlimited Guaranty claim asserted by TCB against Rouse in Texas. This is
a further basis on which to sustain the lower court's issuance of the anti-suit injunction.
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TEX. R.
Civ. P. 97(a) governs compulsory counterclaims, providing, in pertinent part, as
follows:
A pleading shall state as a counterclaim any claim within the jurisdiction of
the court, not the subject of a pending action, which at the time of filing the
pleading the pleader has against any opposing party, if it arises out of the
transaction or occurrence that is the subject matter of the opposing party's
claim and does not require for its adjudication the presence of third parties
of whom the court cannot acquire jurisdiction....
See also, Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 207 (Tex. 1999);
Moore v. First Fin. Resolution Enters., Inc., 277 S.W.3d 510, 514 (Tex. App.
Dallas
2009, no pet.); Tindle v. Jackson Nat'l Life Ins. Co., 837 S.W.2d 795, 798 (Tex. App.—
Dallas 1992, no writ).
The claims asserted by Rouse in the Oklahoma Suit are identical to those set forth
in his counterclaim asserted in the court below, and constitute a compulsory counterclaim
to TCB' s breach of contract action. First, it is unquestioned that Rouse's claims are
within the jurisdiction of the Texas court. Rouse concedes as much, having asserted them
as counterclaims in his original pro se answer to TCB's claims below. (RR, Vol. 2, PX
13).
Second, Rouse's claims, because they arose from the Unlimited Guaranty, were
already the subject of a pending action by the time he filed the Oklahoma Suit. The fact
that Rouse had already filed his suit in Oklahoma by the time his answer was due in the
Texas case does not destroy the compulsory nature of his counterclaims. This issue was
addressed in Commint Tech. Servs., Inc. v. Quickel, 314 S.W.3d 646 (Tex. App.—
Houston [14th Dist.] 2010, no pet.). There, the Houston Court of Appeals was faced with
-26-
an identical situation where Quickel's suit was filed first in Collin County in December
2007, and Commint then filed suit in Harris County immediately after being served but
before its answer in the Collin County suit was due. Id at 649. The trial court granted
Quickel's summary judgment in the Harris County case on the basis that Commint's
claims were compulsory counterclaims in the Collin County lawsuit. Id. at 649-650. On
review, the Houston Court of Appeals analyzed the second element of the compulsory
counterclaim rule, whether the counterclaims are the subject matter of a pending action.
Id. at 652. Commint argued that by the time it was required to file an answer in Collin
County, its action was already pending as an independent suit in Harris County. The
Houston Court of Appeals disagreed:
Following Commint's argument, parties could easily escape the application
of the compulsory counterclaim rule by following the course of action
taken by Commint. After being served with notice of the lawsuit, a party
could then race to the courthouse and file a similar action against the
opposing party before his answer was due in the original suit, without
triggering the compulsory counterclaim rule. We conclude the Texas
Supreme Court did not intend through an application of its compulsory
counterclaim test, that it would create such an easy path of avoidance and
thereby increase the number of lawsuits filed.
Id.
Under this rule, the fact that Rouse filed the Oklahoma Suit after TCB filed the
Texas case, but before his answer in the Texas case was due, is of no import. Because
the claims asserted by Rouse in the Oklahoma Suit were already the subject of a pending
action at the time he filed the Oklahoma Suit, they are properly characterized as
compulsory counterclaims under
TEX. R. CIV. P.
-27-
97(a). Rouse tacitly acknowledged this
inasmuch as he reified the same claims in his pro se answer in the Texas case as
counterclaims. (RR, Vol. 2, PX 13).
Next, Rouse's claims do not require the presence of third parties over whom the
court below cannot acquire jurisdiction. As of the filing of this brief, Rouse has settled
with and/or dismissed all parties in the Oklahoma Suit except TCB, Mike Calhoun,
Tommy Davis and Jerry Norfield, the latter three of whom are Defendants in the Texas
case brought by TCB, and all of whom have appeared and answered below. (RR, Vol. 2,
PX 14). Rouse has already asserted cross-claims against these parties. (RR, Vol. 2, PX
13). No other parties are needed to fully adjudicate the claims asserted by Rouse in the
court below, and further establish that Rouse's claims in the Oklahoma Suit constitute
compulsory counterclaims in the case filed by TCB.
The one remaining element in the compulsory counterclaim rule is also satisfied
Rouse's claims arise out of the transaction or occurrence that is the subject matter of
TCB's claims below. Texas courts apply a logical relationship test to determine whether
counterclaims arise out of the same transaction or occurrence. Moore, 277 S.W.3d at
516; Jack H. Brown & Co. v. Nw. Sign Co., 718 S.W.2d 397, 400 (Tex. App.—Dallas
1986, writ ref d. n.r.e.) This Court noted in Jack H. Brown that "transaction" has a
flexible meaning that may comprehend a series of many occurrences, depending less on
the relative immediateness of the occurrences as upon their logical relationship. Jack H.
Brown, 782 S.W.2d at 399. Accordingly, no logical relationship exists "when none of the
same facts are relevant to both claims." Id. at 400. Nevertheless, "whenever the same
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facts, which may or may not be disputed, are significant and logically relevant to both
claims, the 'logical relationship' test is satisfied." Id. In that case, a logical relationship
existed between the claims on appeal and those in a prior suit brought by Northwest Sign
in a different state, despite the fact that three distinct contracts were involved in the
transaction, and the trial court's decision that the second suit in Texas was barred by
TEX.
R. Civ. P. 97(a) was affirmed. Id.
A number of courts have held that a suit to recover on a note is a compulsory
counterclaim to the makers' and/or guarantors' claim of fraud, and vice versa. The
holding in White Stores, Inc. v. Nowaski, 760 S.W.2d 53 (Tex. App.—Ft. Worth 1988, no
writ), arose from such a situation. There a number of guarantors filed suit in Jefferson
County in October 1985 against White Stores and others, alleging fraud and other causes
of action relating to the operation of a number of Whites Stores Series 4000 dealerships,
Id. at 54. White Stores subsequently filed suit in Wichita County to recover amounts
owed by the corporations which were guaranteed by the plaintiffs in the Jefferson County
suit in December 1986. Id. The Wichita County trial court abated and ultimately
dismissed the second case following a motion to abate filed by the guarantors on the
grounds that the claims were compulsory counterclaims under
TEX. R.
Civ. P. 97(a) to the
claims filed in Jefferson County. Id. The Houston Court of Appeals considered the issue
of whether the guaranties arose out of the same transaction or occurrence of the Jefferson
County lawsuit, and concluded that they were compulsory counterclaims, holding that
even though the validity of the agreements was not challenged in the Jefferson County
-29-
suit, at issue there was "the entire nature of the business relationship between the parties."
Id. at 55.
The same finding was handed down in Cmty. State Bank v. NSW Invs., LLC, 38
S.W.3d 256 (Tex. App.
Texarkana 2001, pet. dism'd w.o.j). In that case the appellate
court affirmed the trial court's issuance of a temporary injunction precluding prosecution
of a second suit by the bank, on grounds that its claims were compulsory counterclaims to
the first suit for fraud and conspiracy brought by the guarantors. Id. at 257, 260.
Likewise, the same rule applies in reverse—a suit for fraud by a guarantor is a
compulsory counterclaim to a suit by the holder on the underlying note. Lesbrookton,
Inc. v. Jackson, 797 S.W.2d 276, 281 (Tex. App.—Amarillo 1990, writ denied). In that
case, the appellate court applied this Court's "logical relationship" test and found that the
guarantor's claims of fraud in the transaction, fraud in the inducement and conspiracy
were all related to and grounded in the same transaction or occurrence that gave rise to
the guaranty. Id. at 281-282.
The same conclusion was reached by the Waco Court of Appeals in Rucker v.
Bank One Texas, N.A., 36 S.W.3d 649 (Tex. App.—Waco 2000, pet. denied). In that
case the trial court had severed the guarantors' counterclaims into a new cause after
granting summary judgment for the note holder. Id. at 651. On appeal, the Waco court
noted that Texas law provides an exception to a trial court's discretion to grant severance
when the claims sought to be severed are compulsory counterclaims. Id. It went on to
analyze the guarantors' severed claims for fraud and misrepresentation and found them to
-30-
arise from the same transaction as the bank's suit on the note. Id. at 652. Of significance
in the analysis was the observation that "if the Guarantors prevail on the issues asserted
as both affirmative defenses and as a counterclaim, Bank One's recovery on the
guarantees will be affected." Id. Clearly if Rouse were to prevail on his counterclaims in
this case, TCB's recovery would be affected.
The trial court's issuance of the anti-suit injunction in this case should be affirmed
because the claims brought by Rouse in the Oklahoma Suit are compulsory to those
brought by TCB on the Unlimited Guaranty, and thus arise from it. As noted above,
Rouse's remaining claims against TCB in the Oklahoma Suit, for fraud, constructive
fraud/estoppel by silence, and civil conspiracy, are claims arising out of the same
transaction and occurrence that led to the existence of the Unlimited Guaranty—the floor
plan loan program written by TCB for Tri-County, The Unlimited Guaranty was given
by Rouse as an inducement for the floor plan loan program. (CR, Vol. 1, p. 60). All of
the claims asserted by Rouse in the Oklahoma Suit and as counterclaims in the case
below are have their factual bases in TCB's administration of the floor plan loan
program. (RR, Vol. 2, PX 7, PX 13). Yet without the Tri-County partners' participation
in the Unlimited Guaranty, there would have been no floor plan loan program. As stated
by the White Stores court, at issue in the case below is the "entire nature of the business
relationship between the parties" and thus Rouse's claims in the Oklahoma Suit were
properly enjoined because, as compulsory counterclaims to the breach of guaranty action
first brought by TCB in Texas, they necessarily arise from the Unlimited Guaranty.
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D.
TCB has Shown a Probable, Imminent and Irreparable Injury
An injury 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. TCB has a contractual right in the mandatory venue
provision of the Unlimited Guaranty, the value of which is incapable of being stated in
pecuniary terms, which will be irreparably harmed (in fact, destroyed) if the Oklahoma
Suit is allowed to proceed against TCB to a judgment.
Moreover, this Court has previously recognized that a lawsuit filed in a venue
contrary to that required by a contract is vexatious and harassing and sufficient to support
a trial court's finding of irreparable harm. Triton Energy, 52 S.W.3d at 343. There an
insured filed suit in Texas against its insurance company asserting a claim for coverage.
Id, at 339. The insurance company subsequently filed a suit in California seeking a
declaratory judgment that the claim in the Texas suit was not covered. Id. In the
California suit, the insurance company denied the insured's request for an extension of its
answer deadline and made several attempts to obtain an accelerated summary judgment
hearing, both before and after the insured appeared in the suit. Id. The insured filed an
application for anti-suit injunction in the Texas case seeking to enjoin the insurance
company from pursuing the California lawsuit and set it for hearing. Id. Thereafter the
insurance company attempted to reset its Motion for Summary Judgment hearing in the
California suit prior to the anti-suit injunction hearing in Texas "to avoid the risk of
inconsistent judgments." Id.
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The Texas trial court granted the insured's request for anti-suit injunction based on
a "Service of Suit" endorsement to the parties' insurance policy, wherein the insurance
company consented to the jurisdiction of any competent court in the United States and
further that "in any suit filed against the Company upon this contract, the Company will
abide by the final decision of such court or of any appellate court in the event of any
appeal." Id. at 340. The Texas trial court reasoned that, because the insured filed suit
first and the insurance company consented to be bound by any court the insured chose,
allowing the insurance company to proceed in a parallel suit in another state would render
"Service of Suit" provision "meaningless." Id. at 341. The trial court also found that the
subsequent California lawsuit the insurance company filed was vexatious and harassing,
specifically citing the insurance company's refusal to allow the insured additional time to
answer the lawsuit and its attempts to obtain an accelerated summary judgment hearing,
such that it constituted a "race to judgment" in California. Id. at 342.
In affirming, this Court noted that the trial court had made findings in support of
the issuance of the injunction on three of the four Golden Rule factors, and that the
findings, which included the "race to judgment" as discussed above, supported its
conclusion that the insured had suffered irreparable harm. Id. at 343. This Court held it
was not an abuse of discretion to find the California suit vexatious and harassing in light
of the circumstances. Id. This holding is consistent with the implication of the Texas
Supreme Court's reasoning in Golden Rule is that a party's "race to the courthouse" is
one of the "circumstances which render an injunction necessary 'to prevent an irreparable
- 33 -
miscarriage of justice.'" Golden Rule, 925 S.W.2d at 651-652, quoting Gannon, 706
S.W.2d at 307.
Similar considerations compel the same conclusion in this case. Rouse was
clearly conducting a "race to judgment" by seeking a continuance of the Texas case,
based, inter alga, on the volume of documents produced in this case, while vehemently
opposing the continuance sought by TCB in the Oklahoma Suit on a setting that was only
one week later. (RR, Vol. 2, PX 37, PXs 44-47). The trial court specifically found this
conduct to be vexatious and harassing. (CR, Vol. 1, p. 770-771). It also found that
Paragraph 21 of the Unlimited Guaranty would be rendered meaningless if Rouse were
permitted to litigate his claims in the Oklahoma Suit rather than in the court below. (CR,
Vol. 1, p. 771). In fact, but for the issuance of the anti-suit injunction, Rouse's conduct
would have indeed rendered Paragraph 21 of the Unlimited Guaranty meaningless. This
is sufficient evidence of irreparable harm to support the trial court's issuance of the
injunction, and the same should be affirmed.
E.
Issuance of the Anti-Suit Injunction Meets the Golden Rule Criteria
As previously noted, the Texas Supreme Court has set out four factors for
consideration by a court reviewing the issuance of an anti-suit injunction. An anti-suit
injunction is appropriate: (1) to address a threat to the court's jurisdiction; (2) to prevent
the evasion of important public policy; (3) to prevent a multiplicity of suits; or (4) to
protect a party from vexatious or harassing litigation. Golden Rule, 925 S.W.2d at 651.
The reviewing court must apply the same abuse of discretion standard applicable to the
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issuance of any injunction. Gannon, 706 S.W.2d at 305; Christensen, 719 S.W.2d at 163.
Viewing the evidence considered by the trial court in the light most favorable to the order
issued below, and indulging every inference arising from the evidence in favor thereof, it
is clear that the issuance of the anti-suit injunction is supported under all four of the
circumstances enumerated in Golden Rule, and the decision to issue the same was not an
abuse of discretion.
As discussed above, in Triton Energy this Court found no fault with the trial
court's determination that the race to the courthouse in California by the insurance
company was "vexatious and harassing" as contemplated by Golden Rule. Triton
Energy, 52 S.W.3d at 343. The trial court also found the California lawsuit subsequently
filed by the defendant was a threat to its jurisdiction. Id. at 342. On appeal this Court
agreed, holding that the Golden Rule standard is not whether a court will be deprived of
jurisdiction, but whether there is a "threat" to the court's jurisdiction. Id., citing Golden
Rule, 925 S.W.2d at 651. "Thus, we cannot conclude that the trial court acted without
reference to guiding principles in finding a threat to its jurisdiction." Triton Energy, 52
S.W.3d at 343. Likewise, the this Court approved the finding of the trial court that the
California suit had to be enjoined to avoid the evasion of an important public policy, that
insurance companies not be allowed to "back off' their contractual obligations. Id. at
341.
The court below made similar findings with respect to Rouse's continued
prosecution of the Oklahoma Suit—that it was vexatious and harassing, that it constituted
-35-
a threat to the court's jurisdiction, and that it was an attempt to evade an important Texas
public policy in favor of the enforcement of venue selection clauses, (CR, Vol. 1, p.
771). Rouse's conduct clearly threatened the jurisdiction of the court below. Rouse
contractually obligated himself to litigate all disputes concerning the Unlimited Guaranty
in Dallas County, Texas, submitting himself to the jurisdiction of Dallas County courts.
(CR, Vol. 1, p. 66). As noted herein, all of the claims asserted by Rouse in the Oklahoma
Suit arise from the Unlimited Guaranty. The Oklahoma Suit constituted an attempt by
Rouse to thwart his contractual obligation. The court below found specifically that it had
jurisdiction over the issues Rouse seeks to litigate in the Oklahoma Suit based on the
Unlimited Guaranty, and that Rouse's conduct in attempting to circumvent the Texas trial
setting in favor of that in the Oklahoma Suit constituted a threat to its jurisdiction. (CR,
Vol. 1, p. 770-771). Clearly there was ample evidence in the record below to support this
finding, and the issuance of the injunction should be affirmed.
Likewise, the finding below that Texas has a public policy in favor of enforcing
contractual forum selection clauses was not an abuse of discretion. It also forms a valid
basis for the issuance of an anti-suit injunction. The Texas Supreme Court has held that
"jsjubjecting a party to a trial in a forum other than that agreed upon and requiring an
appeal to vindicate the rights granted in a forum-selection clause is clear harassment." In
re AIU Ins. Co., 148 S.W,3d 109, 117 (Tex, 2003), It goes without saying that Rouse's
conduct in pursuing the Oklahoma Suit against TCB creates a multiplicity of suits which
the anti-suit injunction would prevent. Paragraph 21 of the Unlimited Guaranty provided
-36-
that the forum agreed upon by these parties was Dallas County, Texas, and the
enforcement of that provision through the issuance of an anti-suit injunction should be
affirmed.
CONCLUSION AND PRAYER
The trial court properly issued the Temporary Injunction to enjoin Rouse from
prosecuting his claims in the Oklahoma Suit against TCB. Paragraph 21 of the
Unlimited Guaranty is an enforceable forum selection clause, and gives the court below
jurisdiction over the claims asserted against TCB by Rouse in Oklahoma, which are all
"disputes arising under or pertaining to" the only relationship that exists between TCB
and Rouse, that of lender and guarantor. TCB had no adequate remedy at law when the
injunction issued, having exhausted all possible legal remedies in Oklahoma. Absent the
anti-suit injunction, Rouse's conduct would render Paragraph 21 meaningless, and his
race to judgment in Oklahoma would destroy the contractual obligation by which he
agreed to seek redress of his claims in Dallas County, Texas. The evidence heard by the
court below must be viewed in the light most favorable to the issuance of the injunction,
and all reasonable inferences indulged in favor of the trial court's findings. Under this
standard, there was clearly no abuse of discretion by the trial court in issuance of the
injunction. TCB prays that the issuance of the anti-suit injunction be affirmed.
Respectfully submitted,
C ANTEY HAN ER L L
By:
44# RANDALL K. ' E
State Bar No. 16303800
JAMES T. PHILLIPS
State Bar No. 00794455
1999 Bryan Street, Suite 3300
Dallas, Texas 75201
Tel: (214) 978-4100
Fax: (214) 978-4150
rpri ce(&,canteyb anger. com
[email protected]
STEPHEN L. TATUM
State Bar No. 19674500
Burnett Plaza, Suite 2100
801 Cherry Street, Unit #2
Fort Worth, Texas 76102
817-877-2800 (Telephone)
817-877-2807 (Fax)
ATTORNEYS FOR APPELLEE
CERTIFICATE OF SERVICE
This is to certify that a true and correct copy of the foregoing document was sent
via Certified Mail, Return Receipt Requested on the following counsel of record and
Defendants appearing pro se on this 1 st day of August, 2011:
John K. Vaughan
Stacey D. Walvoord
Michelle S. Sortor
Vaughan, Ramsey & Walvoord
530 S. Carrier Parkway, Suite 300
Grand Prairie, TX 75051
Michael S. Calhoun, pro se
10827 Hwy 154 South
Yantis, Texas 75497
Carrie L. Morris, pro se
P. 0. Box 58
Asher, OK 74826-0058
William Pope Langdale, III
William C. Nijem
Langdale Vallotton, LLP
1007 North Patterson Street
P. 0. Box 1547
Valdosta, GA 31601
Dwight M. Francis
Aimee Oleson
Gardere Wynne Sewell LLP
1601 Elm Street, Suite 3000
Dallas, Texas 75201
William R. Power
Law Office of William R. Power
705 B. North Pacific Street
Mineola, TX 75773
Michael C. Wynne
Wynne & Smith, L.L.P.
707 W. Washington Street
P. O. Box 2228
Sherman, TX 75091-2228
Steven J. Berry
Berry, Odom, Rabinowitz & Bobo LLP
611 9th Avenue
Fort Worth, Texas 76104