James Burkholder, Mike Morgan, Joe Urbanek, Melissa Grebb, Ruthie Ewers, Benjamin Bujanda, Fred Cordova, and Laguna Bay Condominium Association, Inc. v. Timothy Wilkins

Citations: 504 S.W.3d 485; 2016 Tex. App. LEXIS 11345; 2016 WL 6124662Docket: 13-16-00273-CV

Court: Court of Appeals of Texas; October 20, 2016; Texas; State Appellate Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The Court of Appeals for the Thirteenth District of Texas is reviewing a temporary injunction granted to Timothy Wilkins, a unit owner at Laguna Bay Condominiums, which restricts the Laguna Bay Condominium Association (COA) and its board members from collecting a special assessment of $91,316 from him and from foreclosing on his property. This assessment was purportedly for Wilkins’s share of costs associated with repairs following Hurricane Dolly. The COA challenges the injunction, arguing that Wilkins did not demonstrate the required elements of irreparable injury and lack of adequate legal remedy, and that the trial court improperly evaluated the balance of equities.

Wilkins previously sued the COA in 2013 after his condo sustained water damage due to the hurricane, leading to a settlement that required the COA to make repairs within a specified timeframe. However, the COA failed to complete these repairs as mandated, which Wilkins claims resulted in further damage and mold, rendering the unit uninhabitable and unsalable. The court ultimately upheld the temporary injunction in favor of Wilkins.

Wilkins argues that the COA failed to specify which sliding glass doors met its specifications. He refused to pay a special assessment of $91,316 for common-area repairs and began withholding COA dues, prompting the COA to attempt foreclosure on his condo. In response, Wilkins filed a lawsuit alleging breach of contract, breach of fiduciary duty, and various fraud claims. He also sought a temporary injunction to prevent the COA from collecting the special assessment or foreclosing. Supporting his request, he provided evidence including his affidavit, a settlement agreement, photos of damage, discovery responses, an engineering report, and a remediation proposal.

The COA acknowledged its commitment to repair Wilkins's unit but claimed it was unaware of the full extent of necessary repairs when the settlement was made, asserting that repairs should be conducted top-down due to the building's structure, which Wilkins's unit being on the second floor would complicate. The COA proposed a shared repair plan costing Wilkins $91,316 but did not provide evidence for its claims. The trial court granted the temporary injunction, finding that the COA intended to pursue foreclosure and that Wilkins was likely to succeed in his lawsuit. The court determined that the injunction was necessary to prevent irreparable harm to Wilkins and to maintain the status quo, with the potential harm to him outweighing any impact on the COA.

The appellate review of the temporary injunction is based on whether the trial court abused its discretion, which includes assessing whether the court had sufficient information and whether it properly applied its discretion. The COA contends that Wilkins did not provide sufficient evidence of potential irreparable harm that would leave him without an adequate legal remedy.

The Court of Appeals (COA) asserts that Wilkins presented only his affidavit as evidence for a temporary injunction, which they argue is not permissible unless the parties agree to its use. They reference *Millwrights Local Union Number 2484 v. Rust Engineering Company*, establishing that affidavits cannot support a temporary injunction without such agreement. Wilkins counters that two exceptions apply: if the opposing party does not object to the affidavit's use, or if the affidavit is formally entered into evidence during the hearing. He claims both exceptions are valid in this case, arguing that his affidavit indicates that without the injunction, the COA will initiate foreclosure, demonstrating irreparable harm with no adequate remedy at law.

The law under Section 51.014(a)(4) of the Civil Practice and Remedies Code allows for interlocutory appeals regarding temporary injunctions, aimed at preserving the status quo pending trial. To secure a temporary injunction, the applicant must establish: a valid cause of action, a probable right to relief, and imminent irreparable injury. Irreparable injury is defined as situations where damages cannot be adequately measured or compensated, particularly in cases involving unique property. Case law, including *N. Cypress Med. Ctr. Operating Co. v. St. Laurent* and *El Paso Dev. Co. v. Berryman*, supports the notion that foreclosure constitutes irreparable harm. The applicant bears the burden of providing evidence for each element necessary for a temporary injunction. Generally, affidavits are inadmissible without party agreement, but if the opposing party does not object at trial, they cannot raise the objection on appeal.

In Ahmed v. Shimi Ventures, the court addressed the COA's challenge regarding the consideration of Wilkins's affidavit in support of his application for a temporary injunction. The court noted that the COA did not object to the affidavit in the trial court, which precluded them from raising the issue on appeal. The affidavit detailed Wilkins's claims about the COA's failure to fulfill obligations under a Settlement Agreement and their initiation of foreclosure proceedings against him in bad faith after he withheld dues in response to a special assessment he refused to pay. The COA's counsel acknowledged at the temporary injunction hearing that they would need to be persuaded to halt foreclosure proceedings. The trial court found sufficient evidence of the COA's intent to collect a significant amount, which supported Wilkins's case. The affidavit, alongside other evidence, established that Wilkins faced a credible threat of foreclosure, risking irreparable harm to his ownership of the property. The court concluded that Wilkins demonstrated the necessary elements for a temporary injunction, affirming the trial court's decision to maintain the status quo until a trial could resolve the merits. The COA's objections were overruled, and no abuse of discretion was found in the trial court's ruling.

The Court of Appeals (COA) challenged the trial court's decision to grant a temporary injunction, arguing that it hindered the COA's ability to repair a building, affecting twenty-nine condo owners, and that this harm outweighed any potential injury to Wilkins from foreclosure. The COA did not present evidence to substantiate its claims. Legally, when evaluating a temporary injunction, courts assess the equities and the potential harms to both parties. The trial court may consider the severity of possible injuries if the injunction is wrongly granted or denied. The appellate review of the trial court's equity assessment follows an abuse of discretion standard, where conflicts in evidence do not automatically invalidate the court's decision if supported by some evidence.

In this case, Wilkins provided evidence indicating that without the injunction, foreclosure would likely occur, causing him irreparable harm. The COA relied solely on its pleadings and attorney arguments, which are not considered competent evidence. Consequently, the COA failed to demonstrate the injuries it claimed to face, while Wilkins presented a reasonable basis for his potential injury. Therefore, the appellate court upheld the trial court's ruling, affirming the injunction and concluding that the trial court did not abuse its discretion. The order was affirmed as of October 20, 2016.