# in Re George Green and Garlan Green

> Texas Court of Appeals, 3rd District (Austin) · February 23, 2015

URL: https://www.frixlaw.com/law-library/cases/4050134

## Case

- **Court:** Texas Court of Appeals, 3rd District (Austin)
- **Decided:** February 23, 2015
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

ACCEPTED
03-14-00725-CV
4240941
THIRD COURT OF APPEALS
AUSTIN, TEXAS
2/22/2015 3:49:29 PM
JEFFREY D. KYLE
CLERK

No. 03-14-00725-CV
FILED IN
3rd COURT OF APPEALS
AUSTIN, TEXAS
2/23/2015 12:00:00 AM
In the Third Court of Appeals JEFFREY D. KYLE
Clerk
Austin, Texas

GEORGE GREEN AND GARLAN GREEN (DECEASED),
Appellants

v.

PORT OF CALL HOMEOWNERS ASSOCIATION
Appellee

APPEAL FROM CAUSE NO. 18314
RD
33 JUDICIAL DISTRICT COURT OF LLANO COUNTY, TEXAS
HON. ALLAN GARRETT, PRESIDING

APPELLANTS’ RESPONSE TO APPLELLEE’S MOTION TO DISMISS
AND REQUEST FOR ADDITIONAL TIME TO SUPPLEMENT
RESPONSE IN ORDER TO COMPLETE THE RECORD

David Junkin
State Bar No. 11058020
Law Office of David Junkin
P.O. Box 2910
Wimberley, Texas 78676
512/847-8600
512/847-8604 (fax)
david@junkinlawoffice.com
Attorney for Appellants
TABLE OF CONTENTS

Index of Authorities ...................................................................................... ii

Brief Statement of the Case ..........................................................................1

Request for Additional Time to Supplement This Response .....................3

Issue Presented

DID THE TRIAL COURT’S VACATING THE
SECOND ORDER (THE ORDER ON WHICH THE
APPEAL IS BASED) CONFER ON IT THE
JURISDICTION TO ENTER THE “DISCOVERY
ORDER” (A NEW ORDER COVERING THE SAME
SUBJECT MATTER) AND MOOT THIS APPEAL? ........................3

Summary of the Response .............................................................................4

Argument ........................................................................................................4

Prayer ............................................................................................................. 8

Certificate of Service .....................................................................................9

Appendix

Appellee’s Request for Clerk’s Record and Reporter’s Record ... Tab 1

Second Order (order on which the appeal is based) ...................... Tab 2

Vacating Order .............................................................................. Tab 3

“Discovery Order” ......................................................................... Tab 4

Cases .............................................................................................. Tab 5

Rules .............................................................................................. Tab 6

i
INDEX OF AUTHORITIES

Case Law Page(s)

Ahmed v. Shimi Ventures, LP,
99 S.W.3d 682 (Tex. App.—Houston [1st Dist.] 2003, no pet.) ............. 5

Burton v. Cravey,
759 S.W.2d 160 (Tex. App.—Houston [1st Dist.] 1988, no writ) ............ 7

Episcopal Diocese of Fort Worth v. Episcopal Church,
422 S.W.3d 646 (Tex. 2013), cert. denied, 135 S.Ct. 431 (2014)........... 6

Parsons v. Galveston County Employees Credit Union,
576 S.W.2d 99 (Tex. Civ. App.—Houston [1st Dist.] 1987, no writ) ...... 4

Qwest Communications Corp. v. AT&T Corp.,
24 S.W.3d 334 (Tex. 2000). .................................................................... 6

Reeves v. City of Dallas,
68 S.W.3d 58 (Tex. App.—Dallas 2001, pet. denied) .......................... 4, 5

Tanguy v. Laux,
259 S.W.3d 851 (Tex. App.—Houston [1st Dist.] 1988, no pet). ........... 5

Texas Health and Human Services Commission v Advocates for
Patient Access, Inc.,
399 S.W.3d 615 (Tex. App.—Austin 2013, no pet.) .......................... 5, 6

Texas Workers’ Compensation Commission v. Garcia,
817 S.W.2d 60 (Tex. 1991) ..................................................................... 6

Rules

Tex. R. App. P. 29 ............................................................................................. 4

ii
TO THE HONORABLE THIRD COURT OF APPEALS:

Appellants, George Green and Garlan Green (now deceased) file this

response to the Appellee’s Motion to Dismiss Appellant’s Appeal Because of

Mootness and respectfully request additional time to respond as follows:

BRIEF STATEMENT OF THE CASE

1. The nature of this case is described in more detail in the

Appellants’ Brief previously filed with this Court. Appellants brought claims

against Port of Call Homeowners Association (“POC”) and individual members

of its board of directors in connection with the mismanagement of POC funds.

The primary issue in the underlying suit that is also at issue in this interlocutory

appeal, is the Appellants’ access to the books and records of POC.

2. The suit was filed on February 5, 2013. CR 8. In connection with

discovery issues, both parties filed Motions to Compel. CR 89 and CR 100. A

hearing was held on those motions on August 14, 2014. The Trial Court

summarized its findings (RR, Vol. 2, page 52, line 9 - page 62, line 11) and an

Order was entered (the “Initial Order”). CR 131. The Initial Order was an

attempt by the Court to fashion a compromise between the broad rights of

access to POC’s records under the Texas Property Code (and the POC

governing documents) and the discovery obligations imposed on litigants, by

Appellants’ Response to Motion to Dismiss - Page 1
ordering the automatic production of POC records every forty-five (45) days.

No objection was made to the Initial Order by any party.

3. POC subsequently served Defendants’ Motion to Enforce

Protective Order. CR 153. The motion was generally based on letter requests

for records and information made by Appellants after the Initial Order. A non-

evidentiary was conducted. After the hearing, POC filed Defendants’

Supplemental Motion to Enforce Protective Order. CR 169.

4. On October 21, 2014, the Trial Court entered an Order Granting

Motion for Enforcement (the “Second Order”) which modified the Initial Order

“nunc pro tunc” and imposed injunctive relief against Appellants relating to

communications of any kind between Appellants and Appellees to include, but

is not limited to, requesting documents pursuant to document production

requirements under the Texas Property Code and the Texas Business

Organizations Code and POC governing documents. CR 175. It is the Second

Order that formed the basis of the Appellants’ interlocutory appeal.

5. On January 30, 2015, after Appellants had already filed their brief

in this Court, the Trial Court entered another Order vacating the Second Order,

without prejudice to Appellees seeking the relief granted in the Second Order

(the “Vacating Order”). Supp. CR 4. However, on the same day, the Trial

Court entered a “Discovery Order” 1 again purporting to prohibit oral or written

1
The Court changed the caption from “Amended Order” to “Discovery Order.” Supp. CR 5.

Appellants’ Response to Motion to Dismiss - Page 2
requests for documents by Appellants except through counsel and which also

vacated the Second Order. Supp. CR 5 - 6.

REQUEST FOR ADDITONAL TIME TO RESPOND

6. The Appellants respectfully request that the Court extend the time

for them to respond to the Motion to Dismiss until a reasonable time after the

Supplemental Reporter’s Record is filed. The Order Appellees claim moots this

interlocutory appeal was signed by the Court on January 30, 2015. On or about

February 6, 2015, the Appellees requested that the reporter’s record be

supplemented with the transcript from the January 30, 2015 hearing and the

Clerk’s Record be supplemented with the two (2) orders issued that day. See

Exhibit A which is incorporated by reference. The Supplemental Clerk’s Record

was filed with the Court on February 10, 2015. The Supplemental Reporter’s

Record has not been filed. That record contains statements from Appellees’

counsel reflecting the injunctive nature and purpose of the “Discovery Order.”

7. Accordingly, Appellants respectfully request the opportunity to

supplement this response when the Supplemental Reporter’s Record is filed.

Subject to this request for additional time to supplement this response, the

Appellants respond to Appellees’ Motion to Dismiss.

ISSUE PRESENTED

A. Did the Trial Court’s vacating the Second Order confer on it the
jurisdiction to enter the “Discovery Order” and moot this appeal?

Appellants’ Response to Motion to Dismiss - Page 3
SUMMARY OF THE RESPONSE

8. The Vacating Order did not moot the appeal, because, while the

Trial Court could vacate the Second Order, it lost jurisdiction to modify the

injunction by way of the Discovery Order issued the same day. The Trial Court

did not have jurisdiction to issue the “Discovery Order” and oust this Court of

jurisdiction by vacating the order on appeal and issuing a new one purporting to

cover the same subject matter. Tex. R. App. P. 29.5.

ARGUMENT

9. The appeal of a temporary injunction terminates the jurisdiction of

the trial court as to the merits of a temporary injunction. See e.g., Reeves v. City

of Dallas, 68 S.W.3d 58, 60 (Tex. App.—Dallas 2001, pet. denied), citing

Parsons v. Galveston County Employees Credit Union, 576 S.W.2d 99, 100 (Tex.

Civ. App.—Houston [1st. Dist.] 1978, no writ) (“An amended temporary

injunction entered after an appeal has been perfected will be stricken.”). While an

interlocutory appeal is pending, the trial court retains jurisdiction to dissolve or

vacate the order appealed and to proceed to trial on the merits. “But a trial court

cannot make any order which ‘interferes with or impairs the jurisdiction of the

appellate court or the effectiveness or any relief sought or that may be granted on

appeal’ while the interlocutory appeal is pending.” Tex. R. App. P. 29.5; Reeves,

68 S.W.3d at 60.

Appellants’ Response to Motion to Dismiss - Page 4
10. In Reeves, the trial court entered a temporary injunction in February,

but in March vacated the February injunction, but entered a new order that

granted basically the same relief, and in April entered another order allowing a

payout of the bond. The Court held:

we conclude that March injunction, except for the first paragraph, and the
April order are determinations of the merits of the temporary injunction
while the February injunction was pending on appeal. Thus we conclude
that March injunction, except the first paragraph that vacated the February
injunction, and the April order were issued without authority and must be
stricken. Additionally, we conclude the March injunction, again except for
the first paragraph, and the April order interferes with or impairs our
jurisdiction and the effectiveness of any relief sought from, or that may
have been granted, by this Court.

Reeves, 68 S.W.3d at 60; see also Texas Health and Human Services Commission

v. Advocates for Patient Access, Inc., 399 S.W.3d 615 (Tex. App.—Austin 2013,

no pet.) (“In accordance with TRAP 29.5, the trial court had authority to modify

or amend the May injunction order to (1) grant identical substantive relief, (2)

grant additional substantive relief, and (3) bring the injunction into compliance

with Civil Procedure Rules 683 and 684 as long as those actions did not interfere

with or impair this Court’s jurisdiction or the effectiveness of the relief HHSC

seeks on appeal from the May injunction order.”); see also Tanguy v. Laux, 259

S.W.3d 851, 855 (Tex. App.—Houston [1st Dist.] 2008, no pet.) (concerning a

dissolved order replaced with new order that concerned exactly the same subject

matter), citing, Ahmed v. Shimi Ventures, LP, 99 S.W.3d 682, 689-90 (Tex.

App.—Houston [1st Dist.] 2003, no pet.) (modified temporary injunction order).

Appellants’ Response to Motion to Dismiss - Page 5
A trial court should not be allowed to frustrate a party’s right to appellate review.

Texas Health and Human Services Commission, 399 S.W.3d at 624.

11. The Vacating Order (Supp. CR 4) and “Discovery Order” (Supp. CR

5) vacated the order that is the basis of this appeal. Without more, the Appellants

agree the Trial Court had jurisdiction to vacate the Second Order and that the

appeal would be moot. However, the same day and in connection with the same

hearing, the Court signed a second order styled as a “Discovery Order.” Supp.

CR. 5. As noted above, the caption of the Order was changed from “Amended

Order” to Discovery Order, but in determining whether there is jurisdiction over

the interlocutory appeal, it is the actual substance of the trial court’s ruling, not the

title of the order that decides the issue. See Episcopal Diocese of Fort Worth v.

Episcopal Church, 422 S.W.3d 646, 649-50 (Tex. 2013) (“The effect of the trial

court’s order . . . is what determines this Court’s direct appeal jurisdiction.”), cert.

denied, 135 S.Ct. 435 (2014), citing, Texas Workers’ Compensation Commission

v. Garcia, 817 S.W.2d 60, 61-62 (Tex. 1991); Qwest Communications Corp. v.

AT&T Corp., 24 S.W.3d 334, 336 (Tex. 2000) (“We hold that, in character and

function, the trial court’s order grants a temporary injunction . . . .”).

12. The third paragraph of the Discovery Order again purports to

prohibit any oral or written request for documents by Appellants. Supp. CR 5.

This covers the same subject matter as the injunctive relief granted by the Second

Order. The Supplemental Reporter’s record is expected to confirm the Trial

Appellants’ Response to Motion to Dismiss - Page 6
Court initially intended to delete at least the third paragraph of the Discovery

Order, but was asked by Appellees’ counsel to leave it in to prohibit the conduct

alleged to have given rise to the Second Order – the order purportedly vacated.

13. Further, to the extent that the “Discovery Order” is being used to

prevent the Appellants from requesting documents under the Texas Property

Code, Texas Business Organizations Code (or, for example, the POC bylaws)

then the “Discovery Order” is an improperly broad preemptive injunctive order

extending beyond discovery requests and requiring Appellants to only exercise

their statutory and contractual rights through counsel. See generally, Burton v.

Cravey, 759 S.W.2d 160, 162 (Tex. App.—Houston [1st Dist.] 1988, no writ)

(“Again, we note that appellants are attempting to engraft notions borrowed from

Texas discovery practice onto a statutory right to inspect. Article 1396-2.23

contains no limitations on the members right to inspect as long as the books and

records are those of the non-profit corporation and the inspection is for “any

proper purpose.”).

14. The Vacating Order did not moot the appeal, because the Trial Court

issued an order the same day effectively granting injunctive relief that was also

part of the injunctive relief granted in the Second Order. The Trial Court did not

have jurisdiction to issue the “Discovery Order” and cannot oust this Court of

Appellants’ Response to Motion to Dismiss - Page 7
jurisdiction by vacating the order on appeal and issuing a new one purporting to

cover the same subject matter – even though arguably narrower in scope.2

PRAYER

Appellants move that the Appellees’ Motion to Dismiss be denied and

that Appellants be awarded all such other and further relief, including general

relief, to which they might be entitled.

Respectfully submitted,

Law Office of David Junkin

_______________________
David Junkin
State Bar No. 11058020
P.O. Box 2910
Wimberley, Texas 78676
512/847-8600
512/847-8604 (fax)
david@junkinlawoffice.com

Attorney for Appellants
George and Garlan Green

2
While the “Discovery Order” purports to allow communication (just no requests for “documents”) it arguably
then includes a prohibition on requests for information if the information would be provided in documentary
form. For example, the Discovery Order purports to prohibit Appellants from obtaining a simple accounting
from POC for Appellants’ payments to POC unless the request is made through counsel.

Appellants’ Response to Motion to Dismiss - Page 8
CERTIFICATE OF SERVICE

I hereby certify that a copy of this response brief was served on the
following counsel of record and in the manner indicated on February 22, 2015.

VIA FAX OR AND/OR ESERVE

Brantley Ross Pringle, Jr.
Heidi Coughlin
Wright & Greenhill, PC
221 West 6th Street, Suite 1800
Austin, TX 78701

VIA FAX AND/OR ESERVE

L. Hayes Fuller, III
Naman, Howell, Smith, & Lee, PLLC
P.O. Box 1470
Waco, TX 76703-1470

___________________________
David Junkin

Appellants’ Response to Motion to Dismiss - Page 9
175
176
4
5
6
Page 682 Page 685

99 S.W.3d 682 (Tex.App.—Houston [1st Dist.] 2003) Beltway incorporated in October 2000 and is the
managing general partner of Shimi, which was formed
Mohammed Atique AHMED, Appellant, [1] the same month. Shortly after Shimi's formation, Shimi
purchased the assets, goodwill, and books of business of
v. the Houston offices of Amco Insurance Agencies, Inc.
("Amco").
SHIMI VENTURES, L.P. and Beltway Insurance
Agency, Inc., Appellees. The undisputed evidence shows that, through the
date of the temporary injunction hearing, Beltway had
No. 01-02-00914-CV.
never been licensed as an insurance agency by the Texas
Department of Insurance, even though Beltway's petition
Court of Appeals of Texas, First District, Houston.
admitted that, since the purchase of Amco's business,
January 31, 2003. Beltway had been "in the business of selling Texas
personal automobile liability insurance." In contrast,
Page 683 Ahmed--originally the president, board member,
employee, and shareholder of Beltway and also a limited
[Copyrighted Material Omitted] partner in Shimi--had been a licensed, limited lines agent
since 1999. There was testimony that Beltway had
Page 684 wanted Ahmed to get an insurance license in Beltway's
name and that Ahmed could have obtained that license in
John H. Thomisee Jr., Houston, for Appellant.
as few as six weeks.
John H. Sklar, Houston, for Appellee.
Starting sometime in late 2000, Ahmed began
entering into producer agreements in his own name with
Panel consists of Justices TAFT, KEYES, and
insurers or their agents with whom Beltway did business.
HIGLEY.
Ahmed received commission checks pursuant to these
OPINION agreements. Through July 23, 2002, when he left
Beltway, Ahmed endorsed his commission checks earned
TIM TAFT, Justice. under any of these producer agreements to Beltway and
deposited them in Beltway's account.
Appellant, Mohammed Atique Ahmed, takes this
interlocutory appeal from the granting of a temporary Ahmed signed one such producer agreement in early
injunction. See TEX. CIV. PRAC. & REM.CODE 2002 with Logic Underwriters, Inc. ("Logic"), an
ANN.§ 51.014(a)(4) (Vernon Supp.2003). We determine insurance agency with which Beltway did business. As
(1) whether the trial court could enter, and whether we with his other producer agreements, Ahmed signed the
may review in this interlocutory appeal, a modified agreement in his own name, not expressly as agent of
temporary injunction order that was entered after Ahmed Beltway. Logic generally issued commission checks
had appealed the original temporary injunction order; (2) either in Ahmed's name or jointly in his and Beltway's
whether we must vacate the injunction in part because it name, showing Beltway's address under the payee line.
requires some acts violating the Insurance Code; and (3) [3] However, Logic mailed these checks to the addresses
whether the trial court abused its discretion in of Ahmed's personal stores, not to Beltway's address.
determining that appellees, Beltway Insurance Agency, Following the usual procedure, Ahmed endorsed the
Inc. ("Beltway") and Shimi Ventures, L.P. ("Shimi"), Logic commission checks to Beltway.
carried their burden of showing a probable right of
recovery and irreparable injury. We modify the On July 23, 2002, Beltway's shareholders and board
temporary injunction order in part, to vacate certain of its members met and removed Ahmed as a board member,
provisions, and affirm it as so modified. president, and employee of Beltway. The board removed
Ahmed because he had not obtained the licenses required
Background for Beltway to act as a limited lines agency. According to
Beltway and Shimi's evidence, Ahmed promised at that
The following background facts come from evidence meeting not to interfere with Beltway's operations or
presented at the temporary injunction hearing and from relations with insurers after his removal. Nonetheless,
two affidavits, which the trial court considered without Ahmed thereafter instructed Logic to issue commission
objection, that were attached to Beltway and Shimi's checks solely in his name and to send them to him.
petition. [2]
This dispute concerns who is entitled to the
commission checks issued after Ahmed's removal for conduct business and shall deliver such proceeds to
insurance policies that Ahmed wrote before his removal. [Shimi and Beltway's] counsel....
In a nutshell, the parties dispute the capacity in which
Ahmed acted under the producer IT IS FURTHER ORDERED that Mohammed
Atique Ahmed shall deliver to [Shimi and Beltway's]
Page 686 counsel a photocopy of each commission check that has
been deposited to accounts under his control for
agreements and, thus, the ownership of his commissions. commissions earned on policies written through July 23,
Ahmed testified that he entered into the producer 2002 from Logic Underwriters, Inc. or paid by any
agreements on his own behalf, not as Beltway's agent; insurer with whom [Shimi] or [Beltway] conduct
that the commissions earned pursuant to his producer business and shall deliver such photocopies to [Shimi and
agreements were his alone; and that the commission Beltway's] counsel....
checks that he endorsed to Beltway were loans, although
he admitted that no loan documents existed. Beltway and Page 687
Shimi presented evidence that Ahmed acted as Beltway's
agent under the producer agreements through July 23, IT IS FURTHER ORDERED that Mohammed
2002; that Ahmed knew that the commissions he earned Atique Ahmed shall endorse and make payable to the
on policies written before that date belonged to Beltway; order of [Beltway] all checks from Logic Underwriters,
and that no loan existed. Inc. or paid by any insurer with whom [Shimi] or
[Beltway] conduct business for commissions earned on
Shimi and Beltway sued Ahmed for fraud and policies written through July 23, 2002 and shall deliver
conversion, seeking a temporary restraining order within forty-eight (48) hours after his receipt of all such
("TRO") and temporary and permanent injunctions and checks to [Shimi and Beltway's] counsel.
damages. [4] The ancillary judge granted an ex parte
TRO that restrained Ahmed, his wife, and those acting IT IS FURTHER ORDERED that [Shimi and
for or with them from "directly or indirectly removing, Beltway] and Mohammed Atique Ahmed shall photocopy
transferring, wiring, spending, investing, secreting, or ... each commission check that comes into their respective
disposing" of funds belonging to Beltway and Shimi, possession for commissions earned on policies written
whether from Logic or otherwise. The TRO also through July 23, 2002 from Logic Underwriters, Inc. or
restrained the same people from contacting any insurers any other insurer with whom [Shimi] or [Beltway]
with whom Beltway and Shimi conducted business. conduct business and shall make such photocopies
available to opposing counsel upon request.
Ahmed answered, seeking to dissolve the TRO,
counter-claiming for contract breach and conversion, and IT IS FURTHER ORDERED that Mohammed
seeking a TRO and temporary and permanent injunctions Atique Ahmed, his family members, agents, servants,
against Beltway and Shimi. On August 19, 2002, the trial employees, attorneys and all other persons or entities in
court held an evidentiary hearing on the applications for active concert or participation with him are enjoined from
temporary injunction. The trial court orally granted directly or indirectly contacting Logic Underwriters, Inc.
Beltway and Shimi's application and denied Ahmed's. [5] or any insurer with whom [Shimi] or [Beltway] conduct
On August 23 2002, the trial court signed a temporary business for any purpose related to insurance policies
injunction order, which provided in pertinent part as written or commissions earned on insurance policies
follows: written through July 23, 2002 and claiming that they
represent the interests of [Shimi and Beltway].
IT IS THEREFORE ORDERED that Mohammed
Atique Ahmed and all persons acting on behalf of or in (Emphasis added.)
concert with him, and all persons with actual notice of
this Order, are temporarily enjoined from directly or Ahmed appealed the temporary injunction order
indirectly removing, transferring, wiring, spending, three days later. He then left the country, reportedly to
investing, secreting, or in any manner whatsoever visit a sick family member. In September 2002, Beltway
disposing of the commissions from Logic Underwriters, and Shimi moved to modify the temporary injunction
Inc. or the commissions paid by any insurer, or any other order because Ahmed had allegedly failed to remit the
funds that belong to [Shimi] or [Beltway]. commissions that he had already deposited (about
$47,000), to endorse further commission checks to
IT IS FURTHER ORDERED that Mohammed Beltway, and to provide Beltway and Shimi with copies
Atique Ahmed shall remit to [Beltway] the proceeds from of further commission checks. Beltway and Shimi
all commission checks that have been deposited to claimed that Ahmed had not returned to the country.
accounts under his control for commissions earned on After holding a non-evidentiary hearing on the
policies written through July 23, 2002 modification motion, the trial court entered a modified
(approx.$47,325.00) from Logic Underwriters, Inc. or temporary injunction order, which was substantively
paid by any insurer with whom [Shimi] or [Beltway] similar to the first order except that it lowered Shimi and
Beltway's bond and also ordered all insurers doing
business with Shimi or Beltway to reissue any on a party's motion or on the appellate court's own
commission checks issued to Ahmed or Ahmed and initiative, the appellate court may review the following:
Beltway jointly since August 2002, making them payable (1) a further appealable interlocutory order concerning
solely to Beltway, and to make all future commissions the same subject matter; and (2) any interlocutory order
checks on policies written through July 23, 2002 payable that interferes with or impairs the effectiveness of the
solely to Beltway. relief sought or that may be granted on appeal.

Effect of Temporary Injunction's Modification TEX.R.APP. P. 29.6(a) (emphasis added).
After Perfection of Appeal
The modified temporary injunction order clearly
While this interlocutory appeal was pending, and "concern[s] the same subject matter" as the earlier order
after Ahmed had filed his brief, the trial court entered an that was appealed. See TEX.R.APP. P. 29.6(a)(1).
order modifying the appealed temporary injunction order. Therefore, we may review the modified order in this
Citing Rule of Appellate Procedure 29.6, Ahmed has interlocutory appeal as long as it is itself an "appealable
moved this Court to review the modified temporary interlocutory order." [8] See id.
injunction order in this appeal. See TEX.R.APP. P. 29.6.
Generally, we have jurisdiction to hear an appeal
The second temporary injunction order was entitled from an interlocutory order only if a statute explicitly
"order modifying temporary injunction," not "amended makes the order appealable. SeeStary v. DeBord, 967
order," and it did not expressly vacate the first order. S.W.2d 352, 352-53 (Tex.1998). "A person may appeal
However, other than adding a provision applicable to from an interlocutory order of a district court ... that: ...
insurers, reducing Beltway and Shimi's bond, and grants or refuses a temporary injunction or grants or
changing some compliance dates, the modified order was overrules a motion to dissolve a temporary injunction as
identical to the first order. Moreover, the modified order provided by Chapter 65." [9] TEX. CIV. PRAC. &
concerned exactly what the earlier order had, and it did REM.CODE ANN. § 51.014(a)(4) (Vernon Supp.2003).
not incorporate by reference any terms from the first
order or state that it merely supplemented the first We must strictly construe section 51.014's grant of
order--that is, the second order was a complete temporary interlocutory jurisdiction because the Legislature
injunction in itself concerning exactly the same subject intended it to be a narrow exception to the general rule
matter. The modified order thus implicitly that only final judgments are appealable. SeeBally Total
Fitness Corp. v. Jackson, 53 S.W.3d 352, 355
Page 688 (Tex.2001); Baylor Coll. of Med. v. Tate, 77 S.W.3d 467,
469-70 (Tex.App.-Houston [1st Dist.] 2002, no writ). An
superseded the earlier order. [6] Cf.Anderson v. Teco order modifying a temporary injunction order is not
Pipeline Co., 985 S.W.2d 559, 562 (Tex.App.-San exactly an order that "grants or refuses a temporary
Antonio 1998, pet. denied) (holding that later judgment, injunction
styled "amended final judgment," implicitly vacated
earlier judgment, styled "final judgment"). Page 689

Neither party questions whether we may consider or grants or overrules a motion to dissolve a temporary
the modified order in an interlocutory appeal from the injunction." See TEX. CIV. PRAC. & REM.CODE ANN.
superseded order, or whether the modified order is void § 51.014(a)(4). Nonetheless, this Court has construed
in whole or in part, or whether the interlocutory appeal is section 51.014(a)(4) to grant interlocutory review of an
somehow moot because it was taken from a order modifying a temporary injunction, given the
now-superseded injunction order. We note, however, that similarity of that order to the orders listed in section
these questions concern either our own jurisdiction over 51.014(a)(4). SeeToby Martin Oilfield Trucking, Inc. v.
this appeal, which we must consider even if the parties do Martin, 640 S.W.2d 352, 354-55 (Tex.App.-Houston [1st
not, [7] or the trial court's jurisdiction to modify its Dist.] 1982, no writ). [10] Allowing an interlocutory
injunction, which will affect which order we review, a appeal of such an order is especially appropriate when, as
matter we must decide anyway to review Ahmed's issues. here, the modified order implicitly vacates and then
Accordingly, we examine the effect of the modified replaces the original one: that situation is very much like
order. a dissolution, followed by a granting, over both of which
rulings section 51.014(a)(4) expressly allows an
A. Our Jurisdiction Over the Modified interlocutory appeal. See TEX. CIV. PRAC. &
Temporary Injunction Order REM.CODE ANN. § 51.014(a)(4).

Rule of Appellate Procedure 29.6 governs our Consistent with Martin, we hold that we have
jurisdiction to review, in an interlocutory appeal, a trial jurisdiction to review an order modifying a temporary
court order entered after the appeal's perfection: injunction by interlocutory appeal. SeeMartin, 640
S.W.2d at 354-55; see alsoCurrie v. Int'l Telecharge,
While an appeal from an interlocutory order is pending, Inc., 722 S.W.2d 471, 472-73 (Tex.App.-Dallas 1986, no
writ). Accordingly, we further hold that we have injunction order.
jurisdiction to review the modified temporary injunction
order in this interlocutory appeal from the There is case law that appears to be contrary, but
now-superseded temporary injunction order. See because of amendments to the applicable rules, it does
TEX.R.APP. P. 29.6(a)(1). not control. For example, at common law, before the
Supreme Court adopted the predecessor to these rules,
We grant Ahmed's motion to review the modified some courts had held that the interlocutory appeal of an
temporary injunction order. See id. order deprived the trial court of jurisdiction over the
subject matter of the appealed order, so that all
B. The Trial Court's Jurisdiction to Enter the subsequent trial court orders on the same subject were
Modified Temporary Injunction Order void. SeeParsons v. Galveston County Employees Credit
Union, 576 S.W.2d 99, 100 (Tex.Civ.App.-Houston [1st
That does not end our inquiry. Our holding that we Dist.] 1978, order granting stay) (in vacating amended
may review the modified temporary injunction order in order entered after interlocutory appeal taken, holding,
this interlocutory appeal is not the same as holding that "The perfection of an appeal from an order granting a
the modified order itself is valid. temporary injunction terminates the jurisdiction of the
trial court insofar as the temporary injunction is
The modified order is valid if the trial court had
concerned."). [12] Under the pre-rules common law, the
jurisdiction to enter it during the interlocutory appeal.
modified temporary injunction order here would have
Rule of Appellate Procedure 29.5 sets out the trial court's
been void, and only the original temporary injunction
jurisdiction after an interlocutory appeal is filed. See
order would have remained in effect. SeeHumble
TEX.R.APP. P. 29.5. Rule 29.5 provides that, during the
Exploration Co. v. Fairway Land Co., 641 S.W.2d 934,
pendency of an interlocutory appeal, the trial court retains
940 (Tex.App.-Dallas 1982, writ ref'd n r.e.) (considering
subject-matter jurisdiction of the case and may make
merits of original receivership order on interlocutory
"further orders, including one dissolving the order
appeal, while vacating order modifying receivership after
appealed from, and if permitted by law, may proceed
appeal for lack of jurisdiction in trial court).
with a trial on the merits." Id. [11] The rule expressly
prohibits the trial court from making an order that is But the Supreme Court's adoption of Rule of Civil
inconsistent with any temporary orders of the appellate Procedure 385b in 1983, and its adoption of substantively
court or that "interferes with or impairs" the appellate similar Rule of Appellate Procedure 43(d) in 1986,
court's jurisdiction or the effectiveness of the relief that a changed that common law rule. See TEX.R. CIV. P.
party 385b(d), Order of the Supreme Court, Adopting Rules of
Civil Procedure (Dec. 5, 1983, eff.Apr.1, 1984), TEXAS
Page 690
CASES, 661-62 S.W.2d XXIX, XCIII (West 1984),
seeks or that the appellate court may grant. TEX.R.APP. superseded by TEX.R.APP. P. 43(d), Order of the
P. 29.5(a), (b). Supreme Court and the

We have already held that we have interlocutory Page 691
jurisdiction to review the modified order under statute
Texas Court of Criminal Appeals, Promulgating New
and rule; therefore, the fact that the modified order
Rules of Appellate Procedure (Apr. 10, 1986, eff. Sept. 1,
implicitly supplanted the earlier, appealed order does not
1986, superseded eff. Sept. 1, 1997), TEXAS CASES,
in itself interfere with our interlocutory jurisdiction in
707-08 S.W.2d XXIX, LV (West 1986). Former rules
violation of rule 29.5. Additionally, to the extent that the
385b(d) and 43(d) provided that the trial court retained
modified order's content does not materially differ from
jurisdiction to "issue further orders, including dissolution
that of the superseded order, the modified order neither
of the order appealed from," but expressly prohibited
prevents our review of Ahmed's issues nor affects the
orders "granting substantially the same relief as that
relief that he requests or that we could grant him. Finally,
granted by the order appealed from," those contrary to
we note that the modified temporary injunction order's
temporary appellate orders, or those interfering with or
additional provisions do not adversely affect the relief
impairing the effectiveness of relief on appeal. See id.
that Ahmed requests or that we could grant him.
Under either former rule 385b(d) or former rule 43(d), the
Compare, e.g.,McAllen Med. Ctr., Inc. v. Cortez, 66
modified order would have been void for granting
S.W.3d 227, 238 (Tex.2001) (holding that severance
substantially the same relief as the original order, and we
order, entered after defendant appealed class-action
would have reviewed only the original temporary
certification, violated rule 29.5(b) because it severed out
injunction order. SeeSt. Louis S.W. Ry. Co. v. Voluntary
what had been the class-action claims against appealing
Purchasing Groups, Inc., 929 S.W.2d 25, 33
defendant and because, although appellant could have
(Tex.App.-Texarkana 1996, no writ); Cobb v. Thurmond,
intervened in severed suit, deadline for appealing
899 S.W.2d 18, 19 (Tex.App.-San Antonio 1995, writ
class-certification order in that suit had already expired).
denied); Hopper v. Safeguard Bus. Sys., Inc., 787 S.W.2d
Therefore, under the plain language of rule 29.5, the trial
court had jurisdiction to enter the modified temporary
624, 626-27 (Tex.App.-San Antonio 1990, no writ). and its prompt administration as is equitable relief. Id.

Once again, however, the Supreme Court Whether to grant a temporary injunction lies within
substantively amended the rules in 1997 by adopting rule the trial court's sound discretion. Tel. Equip. Network, 80
29.5, quoted above. See Order of the Supreme Court and S.W.3d at 607. We will thus not reverse the trial court's
the Texas Court of Criminal Appeals, Final Approval of order unless the trial court's action was "so arbitrary that
Revisions to the Texas Rules of Appellate Procedure it exceeded the bounds of reasonable discretion." Id. One
(Aug. 15, 1997, eff.Sept.1, 1997), TEXAS CASES, way that a trial court abuses its discretion is to apply the
948-49 S.W.2d LXI, C (West 1997). Importantly, the law erroneously to undisputed facts. Id. A trial court also
revision omitted the prohibition against entering an order abuses its discretion when it issues an injunction that
granting substantially the same relief as that granted by orders an illegal act, even when done in the name of
the appealed order--which change was made, according preserving the status quo. SeeRegistered Nurse Care
to the comments, because the former prohibition was too Home, 965 S.W.2d at 708 (vacating temporary injunction
broad. See TEX.R.APP. P. 29.5 & cmt. Therefore, the order granted in favor of plaintiffs/appellees because trial
case law interpreting the "substantially similar" court abused discretion by issuing injunction that
prohibition of former rules 43(d) and 385b(d) is not preserved status quo by allowing plaintiffs to continue
binding under rule 29.5. Neither is the pre-rules common operating facilities under conditions violating law); see
law prohibition against any further orders viable under alsoDeNoie v. Bd. of Regents of Univ. of Tex. Sys., 609
rule 29.5. [13] S.W.2d 601, 603 (Tex.Civ.App.-Austin 1980, no writ)
("Status quo can never be a course of conduct which is a
We hold that the trial court had jurisdiction to enter prima facie violation of law."). We view the evidence in
the modified temporary injunction order. See the light most favorable to the trial court's order,
TEX.R.APP. P. 29.6. We also hold that we may review indulging every reasonable inference in its favor.
that modified order in this interlocutory appeal. See Amalgamated Acme Affiliates, Inc. v. Minton, 33 S.W.3d
TEX.R.APP. P. 29.5. 387, 392 (Tex.App.-Austin 2000, no pet.); Tel. Equip.
Network, 80 S.W.3d at 607.
Page 692
B. Violation of Law
The Merits of the Modified Temporary
Injunction Order 1. Whether the Modified Temporary Injunction
Order Requires Acts Violating Statute
A. Standard of Review and Burden of Proof
In issue four, Ahmed argues that the modified
A temporary injunction's purpose is to preserve the temporary injunction order is void to the extent that it
status quo of the litigation's subject matter pending trial. compels him and third parties to violate the Insurance
Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 Code.
(Tex.2002). We may not review the merits of the
applicant's case in an interlocutory appeal from a The Insurance Code prohibits an insurer or
temporary injunction order. Tel. Equip. Network, Inc. v. insurance agent engaged in the business of insurance in
TA/Westchase Place, Ltd., 80 S.W.3d 601, 607 Texas from "pay[ing], directly or indirectly, ... any
(Tex.App.-Houston [1st Dist.] 2002, no pet.). commission or other valuable consideration to ... any
person for services performed by that person as an
To obtain a temporary injunction, an applicant must insurance agent in this state" unless the person holds an
plead and prove (1) a cause of action against the insurance license.
defendant, (2) a probable right to the relief sought, and
(3) a probable, imminent, and irreparable injury in the Page 693
interim. Butnaru, 84 S.W.3d at 204. In establishing a
probable right to the relief sought, the applicant need not TEX. INS.CODE ANN. art. 21.01-2, § 2A(b) (Vernon
establish that it will prevail at trial. SeeCity of Supp.2003). [14] The Insurance Code also prohibits "any
Friendswood v. Registered Nurse Care Home, 965 person to act, as an agent or otherwise, in soliciting or
S.W.2d 705, 707 (Tex.App.-Houston [1st Dist.] 1998, no receiving applications for insurance of any kind
pet.). To establish an irreparable injury, the injured whatever" in Texas and from "in any manner" aiding "in
applicant must show that it "cannot be adequately the transaction of the business of any insurance
compensated in damages or ... the damages cannot be company" without "first procuring a license or certificate
measured by any certain pecuniary standard." Butnaru, of authority...." TEX. INS.CODE ANN. art. 21.01, § 2
84 S.W.3d at 204. That is, the applicant must establish (Vernon Supp.2003). [15] The Code defines an "agent" as
that there is no adequate remedy at law for damages.
SeeSurko Enters., Inc. v. Borg-Warner Acceptance Corp., [a]ny person who solicits insurance on behalf of any
782 S.W.2d 223, 225 (Tex.App.-Houston [1st Dist.] insurance company, ... or who takes or transmits other
1989, no writ). An adequate remedy at law is one that is than for himself any application for insurance or any
as complete, practical, and efficient to the ends of justice policy of insurance to or from such company, ... or who
shall receive or deliver a policy of insurance of any such injunction the amount of revenues that would have
company, or who shall ... receive, or collect, or transmit flowed to Beltway had Ahmed obtained Beltway's
any premium of insurance, ... or do or perform any other license. That is, the protected funds represent the
act or thing in the making or consummating of any damages that Beltway and Shimi hope to collect under
contract of insurance for or with any such insurance their fraud claim. However, that theory of the injunction's
company other than for himself, ... whether any of such purpose has nothing to do with the fact that the
acts shall be done at the instance or request, or by the mechanism that the injunction uses to carry out that
employment of such insurance company, or of, or by, any purpose requires licensed agents and insurers to pay
broker or other person.... commissions directly to an unlicensed corporation
performing insurance services, contrary to the law.
TEX. INS.CODE ANN. art. 21.02, § (a) (Vernon
Supp.2003). [16] Accordingly, we must vacate those portions of the
modified temporary injunction order that require Ahmed's
The quoted prohibitions apply to persons licensed commissions to be paid, directly or indirectly, to
as, among other things, property and casualty insurance Beltway. SeeRegistered Nurse Care Home, 965 S.W.2d
agents. See TEX. INS.CODE ANN. art. 21.01,§ 3(16) at 708. We thus sustain issue four. [19]
(Vernon Supp.2003). The undisputed evidence showed
that Ahmed was at all pertinent times such an agent, Page 695
specifically, a licensed limited lines agent for automobile
insurance. 2. Whether Beltway and Shimi Showed a
Probable Right of Recovery
The Insurance Code defines "person" for purposes of
the above-quoted statutes to include corporations and In issue one, Ahmed argues that Beltway and Shimi
partnerships. See TEX. INS.CODE ANN. art. 21.07, § did not establish a probable right of recovery on their
1A(8) (Vernon Supp.2003). [17] The Code further conversion or fraud claims because those claims were
allegedly based on Ahmed's payment of commissions to
Page 694 them, an act that we have held would violate the
Insurance Code. With respect to the fraud claim, Ahmed
defines a "corporation" to be "a legal entity that is also argues that there was no evidence that he
organized under the business corporations laws or limited misrepresented anything.
liability company laws of this state, another state, or a
territory of the United States and that has as one of its Courts have long refused to enforce contracts that
purposes the authority to act as an insurance agent." TEX. called for paying or sharing insurance commissions in
INS.CODE ANN. art. 21.07,§ 1A(3) (Vernon violation of the Insurance Code provisions discussed
Supp.2003). It was undisputed that Beltway was a Texas above. SeeBenefits Admin. Corp. v. Rearick, 705 S.W.2d
corporation and that, through the time of the temporary 234, 235-36 (Tex.App.-Texarkana 1986, no writ);
injunction hearing, Beltway was not a licensed insurance Perkins v. Lambert, 325 S.W.2d 436, 440
agency. Therefore, the statutes prohibiting (Tex.Civ.App.-Austin 1959, writ dism'd); Stone v.
commission-sharing and insurance solicitation applied to Sterling Mut. Life Ins. Co., 127 S.W.2d 345, 347-48
Beltway to the extent that it wrote insurance policies or (Tex.Civ.App.-Galveston 1939, no writ); Employers Cas.
otherwise acted as an insurance agent, which Beltway Co. v. Mitchell, Gartner & Walton, 84 S.W.2d 862, 864
admitted here and below that it did. (Tex.Civ.App.-Fort Worth 1935, no writ); see alsoIns.
Co. of N. Am. v. Morris, 981 S.W.2d 667, 681-82
The modified temporary injunction order requires (Tex.1998); Tidelands Life Ins. Co. v. Armstrong, 414
Ahmed, a licensed insurance agent, to remit his S.W.2d 196, 198 (Tex.Civ.App.-Austin 1967, no writ).
commissions and to endorse his commission checks to Ahmed relies on this line of cases. However, Ahmed
Beltway, a corporation that is not a licensed insurance overlooks that at least one cause of action that Beltway
agency. The order also requires third-party insurers or and Shimi pled--that for fraud--does not seek to enforce
their managing agents to make commission payments an agreement to share commissions. To the contrary, as
directly to Beltway, which again is unlicensed. The Beltway and Shimi explain on appeal, that cause of action
Insurance Code clearly prohibits such actions. The assumes that Beltway could not legally share Ahmed's
modified temporary injunction order thus requires illegal commissions. Instead, the cause of action relies on their
acts, even if the trial court merely intended to keep the allegation that Ahmed did not obtain Beltway's license
status quo by ordering them. [18] SeeRegistered Nurse after having been charged with doing so specifically so
Care Home, 965 S.W.2d at 708. that he could keep the commissions from Beltway,
allegedly contrary to the parties' arrangement. [20] That
Beltway and Shimi do not argue that an unlicensed theory of recovery is not based on enforcement of an
corporation performing insurance agent services can illegal arrangement to share commissions.
legally share a licensed agent's commissions. Rather, they
respond that they never contracted to share Ahmed's Fraud requires " 'a material misrepresentation, which
commissions, but sought merely to preserve by the
was false, and which was either known to be false when as Beltway's officer and employee for the purpose of
made or was asserted without knowledge of its truth, obtaining Beltway's license. This means that Beltway
which was intended to be acted upon, which was relied (through its corporate representative, Ahmed) was itself
upon, and which caused injury.' " Formosa Plastics Corp. taking responsibility for getting its own license before
USA v. Presidio Engs. & Contractors, Inc., 960 S.W.2d allowing Ahmed (as its employee) to earn commissions.
41, 47-48 (Tex.1998) (quoting Sears, Roebuck & Co. v. The fact that Ahmed never got that license might show
Meadows, 877 S.W.2d 281, 282 (Tex.1994)). Ahmed that Ahmed failed his corporate principal, but it does not
relies on Armstrong v. Tidelands Life Insurance Co. to necessarily demonstrate that Beltway was not entitled to
argue that no reliance existed as a matter of law. 466 rely on him as its own corporate officer. Therefore,
S.W.2d 407 (Tex.Civ.App.-Corpus Christi 1971, no writ). Armstrong does not as a matter of law defeat the reliance
The Armstrong court considered, among other things, needed for Beltway and Shimi's fraud claim.
summary judgments in favor of the defendant insurer on
the contract-breach and fraud claims of an insurance Ahmed also argues that the trial court abused its
agent. Seeid. at 408. The agent based his fraud claim on discretion because there was no evidence that Ahmed had
the insurer's having misrepresented that it would obtain misrepresented anything. However, there was evidence
the proper license for him to act as an agent. See id. The that Ahmed had been charged with obtaining a license for
damages that the agent sought were the commissions that Beltway and that he could have done so in as few as six
he would have received had the weeks, but that he did not. The law prevented unlicensed
Beltway from sharing Ahmed's commissions, yet
Page 696 Beltway still collected commissions. Additionally,
Beltway did not remove Ahmed for failure to obtain
insurer obtained the license. Seeid. at 409. After holding Beltway's license until mid-2002, close to two years after
that the contract between the agent and the insurer was he earned his first commissions. Viewed in the required
void and unenforceable because the agent was not light, these facts raise reasonable inferences that Ahmed
properly licensed, the Armstrong court affirmed the hid his failure to get the license and that Beltway relied
summary judgment rendered on the fraud claim. See id. on that misrepresentation.
The court noted that the statute placed the responsibility
on the agent to obtain the license before acting as an Accordingly, we hold that the trial court did not
insurance agent. See id. Based on this statutory abuse its discretion if it concluded that Beltway and
requirement, the Armstrong court held that the agent Shimi showed a probable right of recovery on at least
could not rely on the insurer's promise to get a license for their fraud cause of action.
him. Seeid. at 409-10, 411.
We overrule issue one. [21]
We distinguish Armstrong for two reasons. First, in
Armstrong, it was the insurance agent who performed the Page 697
services requiring a license, yet he relied on another
entity first to obtain that license for him. Put another way, C. Irreparable Injury
one party took responsibility for obtaining the insurance
In issue two, Ahmed argues that Beltway and Shimi
agent's license, while the other party took responsibility
presented no evidence that injury was imminent or
for acting as the insurance agent. Under that arrangement,
irreparable or that Beltway and Shimi had no adequate
the individual began acting as an insurance agent without
legal remedy absent the temporary injunction.
having first confirmed that the insurer, a separate entity,
had gotten the license that was a prerequisite to the
The modified temporary injunction order recited that
individual's acting. Here, in contrast, viewed in the
Ahmed's possession of commission checks would
appropriate light and indulging all reasonable inferences
irreparably harm Beltway and Shimi by making them
in Beltway and Shimi's favor, one party (Ahmed) took
experience "an immediate, and if not addressed, ongoing,
responsibility both for obtaining the license, which the
shortfall in operating revenues resulting in disruption of
evidence shows might have been done quickly, and for
business operations, including the inability to provide
earning the disputed commissions. Ahmed determined
insurance services to its customers." The order also
both when Beltway would be licensed and when he
recited that Beltway and Shimi had no adequate remedy
would start earning commissions on Beltway's behalf.
at law to compensate them for these damages.
The individual in Armstrong could not rely on another to
obtain his license before acting as an agent, which We hold that evidence supported the trial court's
arrangement might (and did) end up violating the statute; determination on both grounds. Regarding irreparable
in contrast, nothing prevented Ahmed from procuring a harm, Ahmed testified that, through July 23, 2002--that
license for his corporation before acting as an agent. is, for over 20 months--he had deposited all his
commission checks into Beltway's account. Ahmed
Second, the individual in Armstrong relied on a
testified that he had loaned these sums to Beltway to pay
separate entity to obtain his license. In contrast, viewed in
for Beltway's operating expenses: "I was trying to keep
the right light, Ahmed, as Beltway's president, was acting
the money [sic] afloat. Without my loaning this money,
the company would have gone under and the investment ---------
my partners would have [sic] made would have
physically vanished. " (Emphasis added.) The temporary Notes:
injunction hearing was held only 29 days after Ahmed
had left Beltway and stopped depositing commissions [1] Mohammed Atique Ahmed and his wife, Farheen
into Beltway's account. Given Ahmed's own testimony Ahmed, were both defendants below. However, only
that Beltway had depended on these sums for survival for Mohammed Atique Ahmed filed a notice of interlocutory
almost two years, the trial court could reasonably have appeal, and appellees state in their brief that they
inferred that Beltway's needs had not changed nonsuited Farheen Ahmed during the pendency of this
substantially in 29 days. interlocutory appeal.

Moreover, there was evidence from which the trial [2] Ahmed argues that we may not consider the affidavits
court could reasonably have concluded that Beltway and because they are not evidence and because the parties did
Shimi had no adequate remedy at law. Ahmed admitted not agree to treat them as evidence. Ahmed is correct
that, although he considered the commissions that he had that, absent the parties' agreement, affidavits attached to
earned since the beginning to be his personal property, he pleadings and not admitted into evidence do not
had not paid any income taxes on them to date. Ahmed's constitute evidence. SeeMillwrights Local Union No.
counterclaim alleged that the amount of commissions he 2484 v. Rust Eng'g Co., 433 S.W.2d 683, 685-86
had loaned to Beltway was $1,500,000 over the 22 (Tex.1968) (holding that, absent parties' agreement, proof
months preceding the suit's filing; he also testified that, at required for temporary injunction cannot be made by
least at the time of the hearing, his commissions were affidavit attached to injunction application); Letson v.
about $300,000 a year. One could thus reasonably infer Barnes, 979 S.W.2d 414, 417, 418-19
that, under Ahmed's theory of the case, he could have (Tex.App.-Amarillo 1998, pet. denied) (same). However,
potential, outstanding tax liability on a substantial we disagree with Ahmed that we may not consider these
income. Additionally, Ahmed testified that he no longer affidavits under the circumstances present here. Here, the
had errors and omissions coverage for himself trial court announced during the hearing that it could base
individually, from which one could reasonably infer its decision on the exhibits and testimony from the
possible personal liability if Ahmed were sued. Finally, hearing and also on "affidavits filed with the petition" and
two days after the original temporary injunction hearing, on "evidence [sic] provided in [Ahmed's] answer." No
Ahmed went to Pakistan. The next day, Ahmed's counsel one objected to this stated procedure. The trial court was
filed a motion to extend the temporary injunction's the fact finder; therefore, its declaring during the
deadlines, which motion attached a family member's evidentiary hearing that it could consider the affidavits
affidavit estimating that Ahmed would return from was tantamount to its having--rightly or
Pakistan in three weeks. However, as of the date of the wrongly--admitted those affidavits into evidence.
injunction-modification hearing held about two months Ahmed's counsel, who now argues that the affidavits did
later--and as was clear from counsels' discussion at that not constitute evidence, implicitly acquiesced in this
second hearing--Ahmed had not yet returned from procedure below when, after the trial court's quoted
Pakistan. The trial court thus knew of Ahmed's continued statement, he questioned his own client based on the
absence when it signed the modified temporary affidavits attached to Beltway and Shimi's petition.
injunction order. That order carried forth the same Cf.Millwrights, 433 S.W.2d at 686 (holding that parties
inadequate-remedy recital that had appeared in the may agree to allow temporary injunction proof by
original order. affidavit). In any event, Ahmed cannot now complain
about the trial court's having considered these affidavits
Based on this evidence, we hold that the trial court when, after having been advised that the trial court would
did not abuse its discretion in concluding that Beltway do so, Ahmed did not complain below. See TEX.R.APP.
and Shimi would suffer irreparable harm and had no P. 33.1(a)(1); cf.Tigua Gen. Hosp., Inc. v. Feuerberg, 645
adequate remedy at law. S.W.2d 575, 576 (Tex.App.-El Paso 1982, no writ)
(treating affidavits as sufficient temporary injunction
We overrule issue two. proof, despite lack of parties' agreement to do so below,
when opposing party did not complain of deficiency of
Page 698 affidavits on appeal).

Conclusion [3] There were some exceptions. In June 2002, at
Ahmed's request while he was out of town, Logic issued
We modify the modified temporary injunction order commission checks jointly to Ahmed and a company
by vacating those portions of that order that require called BW Insurance Agency, Inc. ("BWI"). BWI was
Ahmed to relinquish or to sign over commissions to formed by Beltway's board of directors in March 2002.
Beltway or that require licensed insurers or their agents to BWI had obtained assumed-name certificates to do
pay commissions directly to Beltway. We affirm the business as "Beltway Insurance" and was actually
modified temporary injunction order as so modified. operating Beltway's stores by the time of the temporary
injunction hearing. It appears to be for these reasons, Exploration Co. v. Fairway Land Co., 641 S.W.2d 934,
among others, that Ahmed requested that Logic issue the 936, 940 (Tex.App.-Dallas 1982, writ ref'd n.r.e.); Holst
commission checks for June in his absence to BWI, rather v. Newsletters, Inc., 578 S.W.2d 420, 421
than to Beltway. (Tex.Civ.App.-Houston [1st Dist.] 1979, writ ref'd n r.e.);
Caldwell v. Meyers, 446 S.W.2d 709, 710
[4] Beltway and Shimi also pled conspiracy between (Tex.Civ.App.-Austin, orig.proceeding); City of Corpus
Ahmed and his wife, Farheen Ahmed. However, during Christi v. Lone Star Fish & Oyster Co., 335 S.W.2d 621,
the appeal, Beltway and Shimi non-suited Ahmed's wife 622 (Tex.Civ.App.-San Antonio 1960, no writ); Hyatt v.
without prejudice, and they admit in their brief that the Mercury Life & Health Co., 202 S.W.2d 325, 327
non-suit vitiates their conspiracy claim. (Tex.Civ.App.-San Antonio 1947, orig. proceeding).

[5] Ahmed does not complain on appeal of the denial of [13] Only one case is to the contrary. In Reeves v. City of
his temporary injunction application. Dallas, after a temporary injunction order had been
appealed, the trial court entered a second temporary
[6] We note that, even if the modified temporary injunction order (1) that expressly vacated the first
injunction order had not supplanted the original order in injunction order and (2) that granted essentially the same
its entirety, our disposition would have been the same for relief as had the first. Seeid., 68 S.W.3d 58, 60
the reasons discussed below. (Tex.App.-Dallas 2001, pet. denied). Relying on rule
29.5's express grant of jurisdiction to dissolve an
[7] SeeBrown v. Herman, 852 S.W.2d 91, 93
appealed temporary injunction, the Reeves court first held
(Tex.App.-Austin 1993, orig. proceeding) (holding that
that the trial court had jurisdiction to enter the second
court of potential jurisdiction has jurisdiction to
temporary injunction order to the extent that the second
determine its jurisdiction).
order vacated the first order, further holding that the
[8] For reasons discussed further below, only subsection vacating of the first order rendered the appeal from the
(a)(1) of rule 29.6 concerns us here. first order moot. See id. With this holding we do not
necessarily disagree. The Reeves court also held that the
[9] TEX. CIV. PRAC. & REM.CODE ANN. §§ remainder of the second temporary injunction
65.001-.045 (Vernon 1997 & Supp.2003) (concerning order--which apparently added a trial date that the first
injunctions). order did not have (see TEX.R. CIV. P. 683, requiring
temporary injunction order to set trial date)--interfered
[10] AccordBarrier v. Little, No. 01-98-01361-CV, slip with its appellate jurisdiction and the relief that it could
op. at 2, 1999 WL 439011 (Tex.App.-Houston [1st Dist.] grant and so violated rule 29.5(b). SeeReeves, 68 S.W.3d
June 17, 1999, no pet.) (not designated for publication) at 60. Neither do we disagree with this holding, and we
(quoting Martin ); Currie v. Int'l Telecharge, Inc., 722 distinguish Reeves on this basis. However, the Reeves
S.W.2d 471, 472-73 (Tex.App.-Dallas 1986, no writ) court alternatively held that the trial court had no
(relying on Martin ); seeArrechea v. Plantowsky, 705 jurisdiction to enter the second temporary injunction
S.W.2d 186, 187, 188-89 (Tex.App.-Houston [14th Dist.] order to the extent that it did anything but vacate the first
1985, no writ) (without discussing jurisdictional issue, order. See id. In this holding, the Reeves court relied
reviewing by interlocutory appeal order modifying solely on pre-rules authority--now superseded by
temporary injunction); Pierce Mortuary Colls., Inc. v. rule--that the trial court loses jurisdiction completely over
Bjerke, 841 S.W.2d 878, 880 (Tex.App.-Dallas 1992, writ the merits of the injunction order once interlocutory
denied) (in dicta, explaining why Currie's holding was appeal is perfected. See id. Because this holding of the
correct for orders modifying temporary injunctions, but Reeves court is based on superseded law, we respectfully
did not apply to amended class certification order that disagree with it.
expanded class). But seeLudewig v. Houston Pipeline
Co., 737 S.W.2d 15, 16 (Tex.App.-Corpus Christi 1987, [14] The parties began their business arrangement before
no writ) (holding that order amending temporary article 21.01-2, section 2A(b)'s effective date of
injunction order was not appealable). September 1, 2001. See Act of May 18, 2001, 77th Leg.,
R.S., ch. 703, §§ 1.04, 10.01, 2001 Tex. Gen. Laws 1348,
[11] The trial court issued both temporary injunction 1354, 1401 (now codified at TEX. INS.CODE ANN. art.
orders before rule 29.5 was modified effective January 1, 21.01-2, § 2A(b) (Vernon Supp.2003)). However, article
2003. See Order of the Supreme Court, Final Approval of 21.01-2A(b) merely recodified prior law (1) that was in
Amendments to the Texas Rules of Appellate Procedure, effect at all times pertinent to this case and (2) that
Misc. Docket No. 02-9237 (Dec. 23, 2002, eff.Jan.1, contained a prohibition not materially different in any
2003). Because the 2003 amendment does not affect the way pertinent to this appeal from the prohibition in the
disposition of this appeal, however, we quote the current current law. See Act of May 25, 1979, 66th Leg., R.S.,
version of the rule. See id. ch. 404, § 1, 1979 Tex. Gen. Laws 884, 885 (eff. June 6,
1979) (first adding this prohibition to Insurance Code,
[12] AccordBoynton v. Brown, 164 S.W. 897, 897 prohibiting commission payment to unlicensed "person or
(Tex.Civ.App.-San Antonio 1914, writ ref'd); Humble corporation" for insurance-agent services), amended by
Act of May 23, 1997, 75th Leg., R.S., ch. 596, § 1, 1997 which Beltway and Shimi would be entitled on final trial
Tex. Gen. Laws 2083, 2083-84,recodified at current code and (2) granted more relief than that for which Beltway
section by Act of May 18, 2001, 77th Leg., R.S., ch. 703, and Shimi pled. Because our holding on issue four does
§§ 1.04, 1.09, 10.01, 2001 Tex. Gen. Laws 1348, 1354, not require vacating the entire modified temporary
1357-58, 1401 (now codified at TEX. INS.CODE ANN. injunction order, our holding does not moot Ahmed's
art. 21.01-2, § 2A(b) (Vernon Supp.2003)). Accordingly, issue one (whether Beltway and Shimi showed a probable
for simplicity's sake, we refer only to current statute. right of recovery on their two claims), his issue two
(whether Beltway and Shimi proved a probable,
[15] Again, because the 2001 amendment to this statute imminent, and irreparable injury), or his issue five
did not change the preexisting law in any way material to (whether the trial court abused its discretion by allegedly
this appeal, we refer only to the current statute. See (Act relying on a finding of breach of fiduciary duty in
of 1951, 52nd Leg., R.S., ch. 491, 1951 Tex. Gen. Laws granting the temporary injunction).
868, 1061, title heading added by Act of April 23, 1999,
76th Leg., R.S., ch. 101, § 2, 1999 Tex. Gen. Laws 486, [20] This theory of Beltway and Shimi's fraud cause of
534, amended by Act of May 18, 2001, 77th Leg., R.S., action was not precisely the theory that they pled below.
ch. 703, § 1.01, 2001 Tex. Gen. Laws 1348, 1349) (now Rather, their petition alleged that Ahmed had committed
codified at TEX. INS.CODE ANN. art. 21.01, § 2 fraud by allegedly falsely claiming that he would not
(Vernon Supp.2003)). interfere with Beltway's business after his removal.
However, the fraud theory on which Beltway and Shimi
[16] The definition of an agent was substantively similar rely on appeal was supported by the temporary-injunction
at all times pertinent to this appeal. See Act of 1951, 52nd evidence, when viewed in the light most favorable to the
Leg., R.S., ch. 491, 1951 Tex. Gen. Laws 868, 1061-62, ruling, and Ahmed has not claimed surprise at the
amended by Act of May 13, 1985, 69th Leg., R.S., ch. assertion of this theory on appeal.
203, § 1, 1985 Tex. Gen. Laws 790, 790, amended by Act
of May 18, 2001, 77th Leg., R.S., ch. 703, § 1.07, 2001 [21] Our holding on issue one moots Ahmed's issue
Tex. Gen. Laws 1348, 1357 (now codified at TEX. five--whether the trial court abused its discretion by
INS.CODE ANN. art. 21.02, § (a) (Vernon Supp.2003)). allegedly relying on a finding of breach of fiduciary duty
in granting the temporary injunction: even if the trial
[17] At all times pertinent to this appeal, persons and court erred in finding this, a claim for fraud does not
corporations both were prohibited from sharing require a breach of fiduciary duty.
commissions and acting as an agent without a license. See
Act of May 26, 1977, 65th Leg., R.S., ch. 579, § 2, 1977 ---------
Tex. Gen. Laws 1421, 1421-22 (adopting "person or
corporation" language), amended by Act of May 25,
1979, 66th Leg., R.S., ch. 404, § 1, 1979 Tex. Gen. Laws
884, 884-85, amended by Act of May 23, 1997, 75th
Leg., R.S., ch. 596, § 1, 1997 Tex. Gen. Laws 2083,
2083-84, amended by Act of May 18, 2001, 77th Leg.,
ch. 703, § 1.09, 2001 Tex. Gen. Laws 1357, 1357-58
(now codified at TEX. INS.CODE ANN. art. 21.07, §
1A(8) (Vernon Supp.2003)).

[18] Sometime in the summer of 2002, BWI (not
Beltway) obtained the license and registrations needed to
act as a limited lines agency. Although BWI was actually
operating Beltway's stores by the time of the temporary
injunction hearing, the undisputed evidence showed that
BWI and Beltway were separate corporate entities and
that BWI was not Beltway's corporate successor.
Moreover, the modified temporary injunction order did
not order Ahmed's commissions paid to BWI, but to
Beltway. BWI's relationship with Beltway, and the fact
that BWI was licensed, are thus immaterial to our holding
under issue four.

[19] Our holding on this issue obviates the need to reach
Ahmed's issue three, which argues that the trial court
exceeded its jurisdiction in issuing the temporary
injunction because the order to turn over and endorse all
commission checks to Beltway (1) granted all the relief to
Page 160 challenged by point of error and is therefore binding on
appeal. Wade v. Anderson, 602 S.W.2d 347, 349
759 S.W.2d 160 (Tex.App. —Houston [1 Dist.] 1988) (Tex.Civ.App.--Beaumont 1980, writ ref'd n.r.e.). The
court ordered the production of "all of Lou W. Burton's
Lou W. BURTON and Galleria Diplomat Association, records and files in any way related to his representation"
Inc., Appellants, of the Association.

v. In their first of three points of error, appellants
contend that the trial court erred in ordering the
Jeffrey M. CRAVEY, et al., Appellees.
production of Burton's records because the application
and proof fail to establish a cause of action or a probable
No. 01-88-00270-CV.
right and a probable injury.
Court of Appeals of Texas, First District, Houston
Appellants mischaracterize the nature of the trial
August 18, 1988 court proceedings. For example, they argue that appellees
have other adequate remedies under Tex.R.Civ.P. 167,
Rehearing Denied Sept. 8, 1988. 168 and 737 to pursue inspection. This assertion ignores
the fact that a writ of mandamus is the proper remedy to
Wade B. Reese, Houston, for appellants. enforce the right of inspection. See 20 R. Hamilton,
Texas Business Organizations § 801 (1973). Appellees
Lou W. Burton, Houston, pro se. did not have to establish an independent cause of action;
they merely had to establish their statutory right to
John K. Grubb, Houston, for appellees.
inspect.
Before SAM BASS, DUGGAN and LEVY, JJ.
Tex.Prop.Code Ann. § 81.209 (Vernon 1984)
provides the following for condominium records:
OPINION
(a) The administrator or board of administration of a
DUGGAN, Justice.
condominium regime or a person appointed by the
This appeal involves the right to inspect records and bylaws of the regime shall keep a detailed written
books of a condominium association. Appellees, a group account of the receipts and expenditures related to the
of dissident owners, filed a petition for writs of building and its administration that specifies the expenses
mandamus and injunction because of the appellant incurred by the regime.
Galleria Diplomat Association's board of directors'
(b) The accounts and supporting vouchers of a
refusal to allow the inspection of records. In a corrected
condominium regime shall be made available to the
order dated March 2, 1988, the trial court granted the writ
apartment owners for examination on working days at
of
convenient, established, and publicly announced hours.
Page 161
(c) The books and records of a condominium regime must
mandamus, ordering the Association to maintain its comply with good accounting procedures and must be
books and records at its offices and make these records audited at least once each year by an auditor who is not
available for inspection and copying. The trial court also associated with the condominium regime.
enjoined appellants from interfering with appellees' right
(Emphasis added.)
to inspect these books and records. The court further
ordered the delay of the annual election by the
The Texas Non-Profit Corporation Act,
Association's members.
Tex.Rev.Civ.Stat.Ann. art. 1396-2.23 (Vernon 1980),
additionally provides:
All of the points of error attack the ordered
production of records in the possession of appellant
A. Each corporation shall keep correct and complete
Burton, the attorney for the appellant Association. The
books and records of account and shall keep minutes of
trial court entered a finding of fact that the Association's
the proceedings of its members, board of directors, and
Board of Directors hired Burton "to handle numerous
committees having any authority of the board of directors
matters for the Association and that records of Lou W.
and shall keep at its registered office or principal office in
Burton relating to Association matters are part of the
this State a record of the names and addresses of its
books and records of the Galleria Diplomat Townhomes
members entitled to vote.
Homeowner's Association, Inc. a/k/a the Galleria
Diplomat Association, Inc." This finding of fact is not B. All books and records of a corporation may be
inspected by any member, or his agent or attorney, for the Law of Private Corporations § 2253.1 (1987). The
any proper purpose at any reasonable time. trial court, however, sustained appellees' objections to
appellants' attempted inquiries about ulterior or vindictive
(Emphasis added.) motives for the inspection of records. Appellants do not
complain about the exclusion of this testimony.
In their application for writ of mandamus, appellees
were attempting to enforce their statutory rights as Appellants' second point of error is overruled.
condominium apartment owners to inspect the "accounts
and supporting vouchers of a condominium regime" Appellants contend in their third point of error that
under Property Code § 81.209, and as corporation the trial court erred in granting the production order
members to inspect "all books and records" of a because it requires the inspection of privileged
non-profit corporation under article 1396-2.23. The trial documents.
court did not err in ordering the production of Burton's
records. Again, we note that appellants are attempting to
engraft notions borrowed from Texas discovery practice
Appellants' first point of error is overruled. onto a statutory right to inspect. Article 1396-2.23
contains no limitations on the member's right to inspect
Page 162 as long as the books and records are those of the
non-profit corporation and the inspection is for "any
Appellants contend in their second point of error that proper purpose." The trial court found that Burton's
the trial court erred in ordering production of the records records and files relating to the Association were part of
and files of the attorney for the condominium association the Association's books and records, and appellants have
because the order is overly broad, unduly burdensome, not contended that the intended inspection is for an
and requires the production of irrelevant information. improper purpose. The only limitation under article
1396-2.23 is "proper purpose." Appellants have failed to
Appellees sought the production of records that they
prove that the purpose of the inspection was improper.
were statutorily entitled to inspect. Appellants'
complaints about the order appear to be an attempt to Moreover, if the attorney-client privilege did apply,
engraft discovery notions upon the appellees' statutory we would hold that the trial court did not abuse its
right of inspection, which is independent of any right of discretion in ordering the inspection of Burton's records.
discovery in litigation. See San Antonio Models, Inc. v. The attorney-client privilege is not absolute; appellants'
Peeples, 686 S.W.2d 666 (Tex.App.--San Antonio 1985, interest in the nondisclosure of communications protected
orig. proceeding). The right to inspect under article by the privilege would have to be balanced against the
1396-2.23 encompasses "all books and records." The trial inspection rights of the members of the non-profit
court found that Burton's files and records relating to the corporation. See In re LTV Securities Litigation, 89
Association were the "books and records" of the F.R.D. 595, 609-611 (N.D.Tex.1981). Under the facts of
Association. This finding is not challenged on appeal. this case, the trial court did not abuse its discretion in
This right of condominium owners to inspect the books ordering the inspection of Burton's records.
and records, like the comparable right to inspect granted
shareholders in corporations, is limited by the Appellants' third point of error is overruled.
requirement that the inspection be for any "proper
purpose." See R. Hamilton, Texas Business The judgment is affirmed.
Organizations § 804 (1973); see also Annotation, What
Corporate Documents Are Subject to Shareholder's Right
to Inspection 88 A.L.R.3d 663 (1978).

Once the trial court found that Burton's files and
records relating to the Association were part of the books
and records of the Association, appellees were entitled to
inspect them for any "proper purpose." Appellants,
however, do not contend that the intended inspection is
for an improper purpose. There was testimony by
appellees that they were concerned about the
"substantial" and "inordinate" fees paid to Burton by the
Association. Although the parties have presented no cases
squarely on point, it would appear that it was the
appellant Association's burden of proof to establish the
absence of proper purpose. Uvalde Rock Asphalt Co. v.
Loughridge, 425 S.W.2d 818 (Tex.1968); Moore v. Rock
Creek Oil Corp., 59 S.W.2d 815 (Tex.Comm'n App.1933,
holding approved); see also, 5A Fletcher, Cyclopedia of
Page 646 OPINION

422 S.W.3d 646 (Tex. 2013) Page 647

THE EPISCOPAL DIOCESE OF FORT WORTH, Phil Johnson, Justice.
ET AL, PETITIONERS,
This direct appeal involves the same principal issue
v. we addressed in Masterson v. Diocese of Northwest
Texas, __ S.W.3d __, (Tex. 2013): what methodology is
THE EPISCOPAL CHURCH, ET AL., to be used when Texas courts decide which faction is
RESPONDENTS entitled to a religious organization's property following a
split or schism? In Masterson we held that the
No. 11-0265 methodology referred to as " neutral principles of law"
must be used. But, in this case the trial court granted
Supreme Court of Texas
summary judgment on the basis of the " deference" or "
August 30, 2013 identity" methodology, and the record does not warrant
rendition of judgment to either party based on neutral
Argued October 16, 2012. principles of law.

Released for Publication March 21, 2014. We reverse and remand to the trial court for further
proceedings.
ON DIRECT APPEAL FROM THE 141ST
DISTRICT COURT, TARRANT COUNTY, TEXAS. I. Background

Amicus Curiae for Liberty Institute: Kelly J. The Episcopal Church (TEC) is a religious
Shackelford, Liberty Legal Institute, Plano, TX. organization founded in 1789. It has three structural tiers.
The first and highest is the General Convention. The
Eprhaim Radner, Pro se. General Convention consists of representatives from each
diocese and most of TEC's bishops. It adopts and amends
For The Episcopal Diocese of Fort Worth, TEC's constitution and canons. The second tier is
Appellant: J. Shelby Sharpe, Sharpe & Rector, Fort comprised of regional, geographically defined dioceses.
Worth, TX; Kendall M. Gray, Andrews Kurth LLP, Dioceses are governed by their own conventions. Each
Houston, TX; R. David Weaver, The Weaver Law Firm diocese's convention adopts and amends its own
PC, Arlington, TX; Scott A. Brister, Andrews Kurth LLP, constitution and canons, but must accede to
Austin, TX.
Page 648
For Local Episcopal Congregations, Appellee:
Frank Gilstrap, Frank Hill, Hill Gilstrap, P.C., Arlington, TEC's constitution and canons. The third tier is
TX. comprised of local congregations. Local congregations
are classified as parishes, missions, or congregations. In
For Local Episcopal Parties, Appellee: Jonathan order to be accepted into union with TEC, missions and
D.F. Nelson, Jonathan D. F. Nelson PC, Arlington, TX; congregations must subscribe to and accede to the
Kathleen Wells, Taylor Olson Adkins Sralla & Elam constitutions and canons of both TEC and the Diocese in
LLP, Fort Worth, TX; Thomas S. Leatherbury, William which they are located.
D. Sims Jr., Vinson & Elkins LLP, Dallas, TX.
In 1982 the Episcopal Diocese of Fort Worth (the
For The Episcopal Church, Appellee: David Beers, Diocese or Fort Worth Diocese) was formed after the
Mary Kostel, Goodwin Proctor LLP, Washington, DC; Episcopal Diocese of Dallas voted to divide into two
Sandra Cockran Liser, Naman Howell Smith & Lee parts. The Fort Worth Diocese was organized " pursuant
PLLC, Fort Worth, TX. to the Constitution and Canons of the Episcopal Church"
and its convention adopted a constitution and canons. The
JUSTICE JOHNSON delivered the opinion of the Diocese's constitution provided that all property acquired
Court, in which JUSTICE HECHT, JUSTICE GREEN, for the Church and the Diocese " shall be vested in [the]
and JUSTICE GUZMAN joined, and in Parts I, II, III, Corporation of the Episcopal Diocese of Fort Worth."
and IV-A of which CHIEF JUSTICE JEFFERSON The canons of the Diocese provided that management of
joined. JUSTICE WILLETT filed a dissenting opinion, in the affairs of the corporation " shall be conducted and
which JUSTICE LEHRMANN, JUSTICE BOYD, and administered by a Board of Trustees of five (5) elected
JUSTICE DEVINE joined. members, all of whom are either Lay persons in good
standing of a parish or mission in the Diocese, or
members of the Clergy canonically resident in the significant disagreement between the parties was whether
Diocese." The Bishop of the Diocese was designated to the " deference" (also sometimes referred to as the "
serve as chair of the board of the corporation. After identity" ) or " neutral principles of law" methodology
adopting its constitution and canons the Diocese was should be applied to resolve the property issue. TEC
admitted into union with TEC at TEC's December 1982 contended that pursuant to this Court's decision in Brown
General Convention. v. Clark , 102 Tex. 323, 116 S.W. 360 (Tex. 1909), the
deference methodology has been applied in Texas for
In February 1983, the Fort Worth Diocese filed over a century and should continue to be applied. Under
articles of incorporation for the Fort Worth Corporation. that methodology, it argued, TEC was entitled to
That same year the Dallas and Fort Worth Dioceses filed summary judgment because it recognized Bishops Gulick
suit in Dallas County and obtained a judgment and Ohls, the leaders elected at the 2009 convention, and
transferring part of the Dallas Diocese's real and personal the appointees of the Bishops as the true and continuing
property to the Fort Worth Diocese. The 1984 judgment Episcopal Diocese. TEC also contended that even if the
vested legal title of the transferred property in the Fort neutral principles methodology were applied, it would be
Worth Corporation, except for certain assets for which entitled to summary judgment. The Diocese, on the other
the presiding Bishop of the Dallas Diocese and his hand, contended that in Brown this Court effectively
successors in office had been designated as trustee. The applied the neutral principles methodology without
judgment transferred the latter assets to the Bishop of the specifically calling it by that name, and Texas courts
Fort Worth Diocese and his successor in office as trustee. have continued to substantively apply that methodology
to resolve property issues arising when churches split.
Doctrinal controversy arose within TEC, leading the Under the neutral principles methodology, the Diocese
Fort Worth Corporation to file amendments to its articles argued, it was entitled to summary judgment affirming its
of incorporation in 2006 to, in part, remove all references right to the property. The Diocese also maintained that
to TEC. The corporate bylaws were similarly amended. even if the deference methodology were applied, it would
The 2007 and 2008 conventions of the Fort Worth still be entitled to summary judgment.[3]
Diocese voted to withdraw from TEC, enter into
membership with the Anglican Province of the Southern The trial court agreed with TEC that deference
Cone, and adopt amendments to the Diocese's principles should apply, applied them, and granted
constitution removing references to TEC.[1] summary judgment for TEC. The Diocese sought direct
appeal to this Court and we noted probable jurisdiction.
Page 649 We had previously granted the petition for review in
Masterson, and we heard oral arguments for both cases
TEC responded. It accepted the renunciation of Jack
on the same day.
Iker, Bishop of the Fort Worth Diocese, and TEC's
Presiding Bishop removed Iker from all positions of II. Jurisdiction
authority within TEC. In February 2009, TEC's Presiding
Bishop convened a " special meeting of Convention" for The Government Code provides that " [a]n appeal
members of the Fort Worth Diocese who remained loyal may be taken directly to the supreme court from an order
to TEC. Those present at the meeting elected Edwin of a trial court granting or denying an interlocutory or
Gulick as Provisional Bishop of the Diocese and Chair of permanent injunction on the ground of the
the Board of Trustees for the Fort Worth Corporation. constitutionality of a statute of this state." Tex. Gov't
The 2009 Convention also voted to reverse the Code § 22.001(c). The trial court granted summary
constitutional amendments adopted at the 2007 and 2008 judgment and issued injunctions ordering the defendants
Conventions and declared all relevant offices of the to surrender all Diocesan property and control of the
Diocese to be vacant. Bishop Gulick then appointed Diocesan Corporation to the Episcopal Diocese of Fort
replacements to the offices declared vacant, including the Worth, and ordering the defendants to desist from
offices of the Trustees of the Corporation. TEC holding themselves out as leaders of the Diocese. While
recognized the persons elected at the 2009 Convention as the trial court order did not
the duly constituted leadership of the Diocese.
Page 650
TEC, Rev. C. Wallis Ohls, who succeeded Bishop
Gulick as Provisional Bishop of the Episcopal Diocese of explicitly address the constitutionality of a statute, " [t]he
Fort Worth, and clergy and lay individuals loyal to TEC effect of the trial court's order . . . is what determines this
(collectively, TEC) filed suit against The Episcopal Court's direct appeal jurisdiction." Tex. Workers'
Diocese of Fort Worth, the Fort Worth Corporation, Compensation Comm'n v. Garcia, 817 S.W.2d 60, 61
Bishop Iker, the 2006 trustees of the corporation, and (Tex. 1991).
former TEC members (collectively, the Diocese), seeking
title to and possession of the property held in the name of In its motion for summary judgment TEC argued, in
the Diocese and the Fort Worth Corporation.[2] Both part, that the actions of the Board of Trustees in
TEC and the Diocese moved for summary judgment. A amending the Fort Worth Corporation's articles of
incorporation were void because the actions went beyond of our decision in
the authority of the corporation, which was created and
existed as an entity subordinate to a Diocese of TEC. Page 651
TEC argued that " [t]he secular act of incorporation does
not alter the relationship between a hierarchical church Brown v. Clark, 102 Tex. 323, 116 S.W. 360 (Tex. 1909),
and one of its subordinate units" and that finding and that Texas courts should utilize that methodology in
otherwise " would risk First Amendment implications." determining which faction of a religious organization is
The Diocese, on the other hand, argued that the case was entitled to the property when the organization splits. __
governed by the Texas Non-Profit Corporation Act[4] S.W.3d at __, We also concluded that even though both
and the Texas Uniform Unincorporated Nonprofit the deference and neutral principles methodologies are
Association Act[5]; under those statutes a corporation constitutionally permissible, Texas courts should use only
may amend its articles of incorporation and bylaws; and the neutral principles methodology in order to avoid
TEC had no power to limit or disregard amendments to confusion in deciding this type of controversy. Id.
the Corporation's articles and bylaws.
IV. Application
In its summary judgment order the trial court cited
A. Summary Judgment--Deference
cases it said recognized " that a local faction of a
hierarchical church may not avoid the local church's
Based on our decision in Masterson, we hold that
obligations to the larger church by amending corporate
the trial court erred by granting summary judgment to
documents or otherwise invoking nonprofit corporations
TEC on the basis of deference principles. __ S.W.3d at
law." The trial court substantively ruled that because the
__.
First Amendment to the United States Constitution
deprived it of jurisdiction to apply Texas nonprofit B. Summary Judgment--Neutral Principles
corporation statutes, applying them to determine the
parties' rights would violate Constitutional provisions. TEC asserts that application of neutral principles
The court's injunction requiring defendants to surrender may violate free-exercise protections if, for example, the
control of the Fort Worth Corporation to the Episcopal Diocese is permitted to void its commitments to church
Diocese of Fort Worth was based on that determination. laws because the specific formalities of Texas law
The effect of the trial court's order and injunction was a governing trusts were not followed or if they are applied
ruling that the Non-Profit Corporation Act would violate retroactively. See Jones, 443 U.S. at 606 (noting that the
the First Amendment if it were applied in this case. case did not " involve a claim that retroactive application
Accordingly, we have jurisdiction to address the merits of of a neutral-principles approach infringes free exercise
the appeal. rights" ). But TEC recognizes that whether application of
the neutral principles approach is unconstitutional
III. " Deference" and " Neutral Principles" depends on how it is applied. See id. at 606 (" It remains
to be determined whether the Georgia neutral-principles
In Masterson we addressed the deference and
analysis was constitutionally applied on the facts of this
neutral principles methodologies for deciding property
case." ). Because neutral principles have yet to be applied
issues when religious organizations split. __ S.W.3d at
in this case, we cannot determine the constitutionality of
__. Without repeating that discussion in full, suffice it to
their application. Further, TEC does not argue that
say that generally courts applying the deference approach
application of procedural matters such as summary
to church property disputes utilize neutral principles of
judgment procedures and burdens of proof are
law to determine where the religious organization has
unconstitutional. Thus, we address the arguments of the
placed authority to make decisions about church
parties regarding who is entitled to summary judgment
property. See Jones v. Wolf, 443 U.S. 595, 603-04, 99
pursuant to neutral principles and conclude that neither
S.Ct. 3020, 61 L.Ed.2d 775 (1979). Once a court has
TEC nor the Diocese is. See Gilbert Tex. Constr., L.P. v.
made this determination, it defers to and enforces the
Underwriters at Lloyd's London , 327 S.W.3d 118, 124
decision of the religious authority if the dispute has been
(Tex. 2010) (noting that when both parties move for
decided within that authority structure. Id. But courts
summary judgment and the trial court grants one motion
applying the neutral principles methodology defer to
and denies the other, appellate courts consider the
religious entities' decisions on ecclesiastical and church
summary-judgment evidence, determine all questions
polity issues such as who may be members of the entities
presented, and render the judgment the trial court should
and whether to remove a bishop or pastor, while they
have rendered).
decide non-ecclesiastical issues such as property
ownership and whether trusts exist based on the same Under the neutral principles methodology,
neutral principles of secular law that apply to other ownership of disputed property is to be determined by
entities. See Serbian E. Orthodox Diocese v. considering evidence such as deeds to the properties,
Milivojevich, 426 U.S. 696, 708-09, 96 S.Ct. 2372, 49 terms of the local church charter (including articles of
L.Ed.2d 151 (1976). We concluded in Masterson that the incorporation and bylaws, if any), and relevant provisions
neutral principles methodology was the substantive basis of governing documents of the general church. E.g.,
Jones, 443 U.S. at 602-03; see Presbyterian Church v. E. required by the corporate bylaws to be lay persons in "
Heights, 225 Ga. 259, 167 S.E.2d 658, 659-60 (Ga. good standing," the Diocese rules require them to be
1969). TEC points out that deeds to the properties loyal Episcopalians, and the bylaws provide that trustees
involved were not part of the summary judgment record do not serve once they become disqualified. Those
when the trial court ruled. Thus, TEC argues, if we do not determinations, TEC argues, were made by Bishops
sustain the summary judgment in its favor, we should Gulick and Ohls and the 2009 convention, and courts
remand the case so the trial court may consider the record must defer to those determinations because they are
on the basis of neutral principles and the four factors ecclesiastical decisions.
referenced in Jones : (1) governing documents of the
general church, (2) governing documents of the local While we agree that determination of who is or can
church entities, (3) deeds, and (4) state statutes governing be a member in good standing of TEC or a diocese is an
church property. See Jones, 443 U.S. at 602-03. We agree ecclesiastical decision, the decisions by Bishops Gulick
that the case must be remanded for further proceedings and Ohls and the 2009 convention do not necessarily
under neutral principles. determine whether the earlier actions of the corporate
trustees were invalid under Texas law. The corporation
Although deeds to the numerous properties was incorporated pursuant to Texas corporation law and
involved were not before the trial court when it granted that law dictates how the corporation can be operated,
summary judgment, the Diocese asserts that there is no including determining the terms of office of corporate
dispute directors, the circumstances under which articles and
bylaws can be amended, and the effect of the
Page 652 amendments. See Tex. Bus. Org. Code § § 22.001-.409.
We conclude that this record fails to show that, as a
about its holding title to and having control of the matter of law, the trustees had been disqualified from
properties. But TEC disagrees with that position. And serving as corporate trustees at the relevant times. Nor
absent agreement or conclusive proof of title to the does the record conclusively show whether the 2009
individual properties and the capacities in which the titles appointments to the corporation board by Bishop Ohl
were taken, fact questions exist under neutral principles were valid or invalid under Texas law, or whether, under
of law, at a minimum, about who holds title to each Texas law, the actions taken by the trustees appointed
property and in what capacity.[6] Accordingly, we cannot
render judgment on the basis of neutral principles. Page 653

C. Remand by Bishop Ohl in 2009 were valid or invalid.

Because the trial court must apply neutral principles Third, the Diocese argues that TEC has no trust
on remand, for its guidance we address certain arguments interest in the property. TEC Canon I.7.4, also known as
made by the parties relating to that methodology. See the Dennis Canon, provides:
Edinburg Hosp. Auth. v. Trevino , 941 S.W.2d 76, 81
(Tex. 1997) (" Although resolution of this issue is not All real and personal property held by or for the benefit
essential to our disposition of this case, we address it to of any Parish, Mission or Congregation is held in trust for
provide the trial court with guidance in the retrial . . . ." ). this Church and the Diocese thereof in which such Parish,
Mission or Congregation is located. The existence of this
We first note that on remand the trial court is not trust, however, shall in no way limit the power and
limited to considering only the four factors listed in Jones authority of the Parish, Mission or Congregation
. As we said in Masterson, Jones did not purport to otherwise existing over such property so long as the
establish a federal common law of neutral principles to be particular Parish, Mission or Congregation remains a part
applied in this type of case. __ S.W.3d at __. Rather, the of, and subject this Church and its Constitution and
elements listed in Jones are illustrative. If it were Canons.
otherwise and courts were limited to applying some, but
not all, of a state's neutral principles of law in resolving The Diocese asserts that this canon does not create a
non-ecclesiastical questions, religious entities would not trust under Texas law, but that even if it does, it was
receive equal treatment with secular entities. We do not revocable and the Diocese revoked it when the Diocesan
believe the Supreme Court intended to say or imply that canons were amended to state:
should be the case.
Property held by the Corporation for the use of a Parish,
Next we address the Diocese's argument that under Mission or Diocesan School belongs beneficially to such
neutral principles courts do not defer to TEC's decisions Parish, Mission or Diocesan School only. No adverse
about non-ecclesiastical matters such as the identity of claim to such beneficial interest by the Corporation, by
the trustees of the Fort Worth Corporation. The Diocese the Diocese, or by The Episcopal Church of the United
argues that under the Non-Profit Corporation Act the States of America is acknowledged, but rather is
trustees are the 2006 trustees who are named as expressly denied.
defendants in this suit. TEC responds that the trustees are
TEC counters that the Dennis Canon creates a trust an injunction " on the ground of the constitutionality of a
because the corporation acceded to it and the Diocese statute of this state." [1]
could not have adopted a canon revoking the trust. TEC
also asserts that the statutes applicable to charitable trusts Today's direct appeal is directly unappealable. The
apply, but if they do not, a resulting trust or other trust trial court's order nowhere mentions any constitution or
may be applied here because the history, organization, statute, much less the constitutionality of a statute.
and governing documents of the Church, the Diocese, and Indeed, the trial court stated verbally that it was not
the parish support implication of a trust. The Diocese pivoting on the constitutionality of state law. This dispute
responds to TEC's arguments by referencing Texas undoubtedly has a First Amendment overlay, but for a
statutory law requiring a trust to be in writing and direct appeal, constitutionality must exist not just in the
providing that trusts are revocable unless they are ether, but in the order.
expressly made irrevocable. See Tex. Prop. Code §
112.004, .051. These issues were not addressed by the As the trial court did not determine " the
trial court because it granted summary judgment based on constitutionality of a statute of this state," its injunction
deference principles. Upon remand the parties will have could hardly be issued " on the ground of the
the opportunity to develop the record as necessary and constitutionality of a statute of this state." Accordingly,
present these arguments for the trial court to consider in we lack jurisdiction. As I have underscored before (albeit,
determining the rights of the parties according to neutral like today, in a dissent):
principles of law. But regarding the trial court's
Ultimately, it falls to us, the courts, to police our own
consideration of the issue, we note that in Masterson we
jurisdiction. It is a responsibility rooted in renunciation, a
addressed the Dennis Canon and Texas law. There we
refusal to exert power over disputes not properly before
said that even assuming a trust was created as to parish
us. Rare is a government official who disclaims power,
property by the Dennis Canon and the bylaws and actions
but liberties are often secured best by studied inaction
of a parish nonprofit corporation holding title to the
rather than hurried action.[2]
property, the Dennis Canon " simply does not contain
language making the trust expressly irrevocable...Even if The merits in this case are unquestionably
the Canon could be read to imply the trust was important--and thankfully they are resolved today in a
irrevocable, that is not good enough under Texas law. companion case[3]--but here the Court can only reach
[Texas Property Code § 112.051] requires express terms them by overreaching. We have no jurisdiction to decide
making it irrevocable." Masterson, __ S.W.3d at __. this case as a direct appeal. I would dismiss for want of
jurisdiction, and because the Court does otherwise, I
Finally, as to the argument that application of
respectfully dissent.
neutral principles may pose constitutional questions if
they are retroactively applied, we note that over a century
I. Background
ago in Brown v. Clark, 102 Tex. 323, 116 S.W. 360 (Tex.
1909), our analysis and holding substantively reflected The trial court in this case issued two injunctions,
the neutral principles methodology. requiring the defendants (now styling themselves as the
Episcopal Diocese of Fort Worth):
V. Conclusion
1. " to surrender all Diocesan property, as well as control
We reverse the judgment of the trial court and of the Diocesan Corporation" to the Episcopal Church
remand the case to that court for further proceedings and other plaintiffs; and 2. " to desist from holding
consistent with this opinion. themselves out as leaders of the Diocese."
DISSENT The court's reasons for granting the injunctions are
laid out in paragraphs one through three of its order:
Page 654
1. The Episcopal Church (the " Church" ) is a hierarchical
Justice Willett, joined by Justice Lehrmann, Justice
church as a matter of law, and since its formation in 1983
Boyd and Justice Devine, dissenting.
the Episcopal Diocese of Fort Worth (the " Diocese" ) has
Until 1940, when Texans amended their been a constituent part of the Church. Because the
constitution, the Supreme Court of Texas lacked any Church is hierarchical, the Court follows Texas precedent
authority to decide direct appeals (i.e., appeals that governing hierarchical church property disputes, which
leapfrog the court of appeals and pass directly to this holds that in the event of a dispute among its members, a
Court). Four years later, the Legislature first exercised its constituent part of a hierarchical church consists of those
new power to permit direct appeals, and in the sixty-nine individuals remaining loyal to the hierarchical church
years since, this Court has exercised that jurisdiction body. Under the
sparingly, only forty-three times. The reason is simply
Page 655
stated: Our direct-appeal jurisdiction is exceedingly
narrow and only proper if the trial court granted or denied
law articulated by Texas courts, those are the individuals II. Discussion
who remain entitled to the use and control of the church
property. A. History of Direct Appellate Jurisdiction

2. As a further result of the principles set out by the A 1940 constitutional amendment gave the
Supreme Court in Brown and applied in Texas to Legislature power to grant direct appeals to this Court.[7]
hierarchical church property disputes since 1909, the Not until 1944, though, did the Legislature do so.[8] The
Court also declares that, because The Episcopal Church is original conferral allowed direct appeals from injunctions
hierarchical, all property held by or for the Diocese may based on two grounds,
be used only for the mission of the Church, subject to the
Church's Constitution and canons. Page 656

3. Applying those same cases and their recognition that a either (1) the constitutionality or unconstitutionality of a
local faction of a hierarchical church may not avoid the state statute, or (2) the validity or invalidity of certain
local church's obligations to the larger church by state administrative orders.[9] Today, the statutory grant
amending corporate documents or otherwise invoking of direct-appeal jurisdiction covers just one situation: "
nonprofit corporations law, the Court further declares that [A]n order of a trial court granting or denying an
the changes made by the Defendants to the articles and interlocutory or permanent injunction on the ground of
bylaws of the Diocesan Corporation are ultra vires and the constitutionality of a statute of this state." [10]
void.
I have found only forty-three cases where we have
(citations omitted). exercised direct-appeal jurisdiction. That is, while such
jurisdiction has existed for nearly seventy years, we have
There are no findings of fact or conclusions of law exercised it stintingly. In twenty-four of the forty-three
attached. The order does not mention the United States cases, our opinion made clear that the trial court either
Constitution, the Texas Constitution, or any particular made a direct holding about a statute's constitutionality or
state statute. The only possible allusion to a statute is to " issued declaratory relief that a statute was or was not
nonprofit corporations law," which the trial court found constitutional.[11] In eleven other cases, the trial court's
the defendants could not " invok[e]" to " avoid [their] order clearly must have been based on constitutional
obligations to the larger church." The trial court's legal grounds, either because the opinion implies that only
support for this conclusion was a string citation to a constitutional issues were raised to the trial court[12] or
number of cases, not a citation to any constitutional because the trial court granted an injunction enforcing a
provision. statute over constitutional objection, thus implicitly
upholding the statute against
What is more, the defendants asked the trial court to
amend the order to specify that the court had held a Page 657
statute unconstitutional. The court declined to do so,
orally stating that its ruling was based not on constitutional attack.[13] In two other cases, we
constitutionality, but rather on its application of Brown v. summarily stated that the trial court granted or denied the
Clark [4]: injunction on the ground of a statute's
constitutionality.[14] But in at least six direct-appeal
I still can't just craft something to make it go to the cases, we did not make it clear why we thought the trial
Supreme Court. I mean, it -- my understanding was that court's injunction was based on constitutional
the -- the trust laws that you were talking about don't grounds.[15] These cases address jurisdiction rather
apply in this situation because of Brown, not because cursorily, and only one of the opinions garnered a dissent
they're not constitutional. on the jurisdictional issue,[16] to which the majority
opinion declined to respond.[17]
Our decision in Brown relied heavily on Watson v.
Jones .[5] Watson, in turn, " appl[ied] not the But in the vast majority of cases where we have
Constitution but a 'broad and sound view of the relations exercised direct-appeal jurisdiction, it has been
of church and state under our system of laws.'" [6] abundantly clear that the trial court issued or denied an
injunction on the ground of a statute's constitutionality.
Nonetheless, the defendants filed a direct appeal.
We noted probable jurisdiction and heard oral argument. We have also issued at least eleven opinions in
But jurisdictional defects do not heal with age, no matter which we dismissed attempted direct appeals for want of
how novel, pressing, or consequential the issues at stake jurisdiction because the statutory test was not met.[18]
or how many judicial and party resources have been We have variously explained that our direct-appeal
expended. The most fundamental restraint on judicial jurisdiction " is a limited one," [19] that we have been "
power is jurisdiction--our very authority to decide cases strict in applying" or have " strictly applied" direct-appeal
in the first place--and if we lack it, we lack it. jurisdictional requirements,[20] and that " [w]e have
strictly construed our direct appeal jurisdiction." [21]
Therefore, we have held that to meet the jurisdictional case was decided two years before the United States
prerequisites, a trial court must actually " pass upon the Supreme Court clarified in Jones v. Wolf that the "
constitutionality of [a] statute," [22] " determin[e]" a deference" rule is not mandated by the First
statute's constitutionality,[23] or " base its decision" on Amendment.[37]
constitutional grounds.[24] Indeed, " [i]t is not enough
that a question of the constitutionality of a statute may A diaphanous hint that a statute was viewed through
have been raised in order for our direct appeal a constitutional prism is not enough to justify exercising
jurisdiction to attach in injunction cases; in addition the our " limited" [38] and " strictly construed" [39]
trial court must have made a holding on the question direct-appeal
based on the grounds of the constitutionality or
unconstitutionality of the statute." [25] Page 659

Page 658 jurisdiction. And here, the trial judge orally eschewed
such a ruling, making it doubly clear that its order was
A close examination of the eleven cases where we not based on constitutional grounds. In light of Jones
dismissed for want of jurisdiction reveals strict adherence (that the deference approach is not constitutionally
to the Legislature's restricted framework. For example, required) and the trial court's comments (that it was
we held " no jurisdiction" where the trial court made the holding the statutes inapplicable but not
injunction decision based on res judicata[26] or where the unconstitutional), it seems an impressive stretch to
trial court was directed to do so by a writ of prohibition transform the trial court's citation to an ambiguous pre-
by the court of civil appeals.[27] That is, because the trial Jones case into a constitutional holding striking down
court did not decide the merits of the constitutional issue, state law.
we lacked direct-appeal jurisdiction.[28] Similarly, we
held that we did not have such jurisdiction where the trial Perhaps the order's silence and the judge's
court denied an injunction because the plaintiffs lacked " disavowal are beside the point if unconstitutionality was
the necessary justiciable interest" to sue.[29] We even the inescapable basis for the trial court's ruling, as the
held that we lacked jurisdiction over a direct appeal of a majority concludes. Indeed, the defendants contend the
temporary injunction involving a " serious question" of order makes no sense unless it turned on a constitutional
the constitutionality of a statute, because the real purpose holding. As the defendants interpret the order, the trial
of the temporary injunction was merely to preserve the court effectively held certain statutes unconstitutional if
status quo, and the trial court did not make any holdings applied to local churches of hierarchical religions. In their
finally determining the constitutional issue.[30] Statement of Jurisdiction, the defendants argue that a
court can only reject statutes like this on " constitutional
B. Application grounds." This assertion rests on the faulty premise that
any time a court deems a statute inapplicable, it's because
Given our long, consistent history of cautiously and the statute would be unconstitutional if applied. Not true.
narrowly construing our direct-appeal jurisdiction, the
outcome of this case seems essentially predetermined: A court can refuse to apply a statute for various
We lack jurisdiction. The Legislature allows parties to non-constitutional reasons. For example, if a statute
skip the court of appeals in one extraordinarily limited purports to change long-standing common law, a court
circumstance: where the trial court's injunction turned " closely examines whether the Legislature truly intended
on the ground of the constitutionality of a [state] statute." to supplant the settled rule.[40] The trial court in this case
[31] The crux and rationale of the trial court's order is may have applied (or misapplied) this kind of analysis,
dispositive. Here, the trial court did not " pass upon the finding that pertinent statutes did not indicate legislative
constitutionality of a statute," [32] " determin[e]" a intent to abandon the common-law deference principle
statute's constitutionality,[33] or " base its decision" on that we declared in Brown . Perhaps the trial court looked
constitutional grounds.[34] While the constitutional at a century of legislative inaction after Brown and took it
issues may have been raised in the trial court, that alone as legislative acquiescence. There are other
is " not enough." [35] non-constitutional reasons to deem a statute ineffective,
like the absurdity doctrine.[41] So even if a trial court
At most, the trial court's order only vaguely alludes implicitly invalidates a statute or finds it inapplicable, its
to nonprofit-related statutes, and there is certainly no reason for doing so is not necessarily because the
indication in the order that the trial court was making a Constitution demands it.
constitutional determination. The trial court order refers
generally to nonprofit law and says the defendants cannot Thus, it cannot be true that by following Brown v.
rely on this law to escape the deference principle, Clark, the trial court implicitly held that any statute that
providing a string citation as support. But only one of the might apply under neutral principles is necessarily
cases in the string citation even refers to constitutional unconstitutional if applied to a church-property dispute in
principles, and that case does not hold that only the a hierarchical setting. This argument is foreclosed by
deference approach is constitutional.[36] Moreover, that Jones v. Wolf . If states are free, consistent with the First
Amendment, to choose either approach, then choosing declare laws unconstitutional--is a genuinely stunning
the deference test cannot equate to an implicit holding one, and one that judges exercise with surpassing
that applying statutes relevant under neutral principles trepidation. Given the stakes, it is difficult to imagine a
would be unconstitutional. Nobody can argue that Texas judge striking down a legislative enactment stealthily,
courts are required to adopt neutral principles-- Jones using gauzy language that requires reading between the
precludes that argument. lines. This judge certainly didn't believe he had declared
anything unconstitutional, and he said as much--on the
Tellingly, the defendants do not attempt to record and unequivocally.
analogize this case to any other in which the Court has
exercised direct-appeal jurisdiction. None is comparable. Today marks the second time this Court has
No constitutional question was presented (or decided) in stretched our direct-appeal jurisdiction beyond its
the trial court, and none is presented (or decided) statutory bounds.[44] The objective in both cases has
here.[42] apparently been to let the Court fast-forward to the merits
of an important case. But an issue's importance and our
Page 660 commendable desire to resolve it swiftly does not give us
license to enlarge our jurisdictional powers by fiat. In
Undoubtedly, we have already noted probable language that could have been written with today's case
jurisdiction, heard argument on the merits, and committed in mind, Chief Justice Phillips wrote in dissent over a
substantial judicial resources to resolving the issues--to decade ago:
say nothing of the effort and cost expended by the parties.
But to assert jurisdiction simply because it would be Dismissing a case on jurisdictional grounds may be
inconvenient to do otherwise betrays the deeply rooted frustrating to judges
constitutional principle that our jurisdiction is conferred
ultimately from the People, directly through our Page 661
Constitution and indirectly through our elected
representatives. and litigants alike, particularly when issues of statewide
import are involved . . . . However, the Legislature has
Dismissing this case for want of jurisdiction would chosen to make direct appeal an uncommon remedy,
be sure to furrow brows, but there is no more principled available only in rare and specific situations. Regardless
reason to dismiss a case than to decide, even belatedly, of the day's exigencies, our highest and only duty is to
that you lack the power to decide. Besides, and this is respect the appropriate limits of our power . . . . I fear that
some consolation, the core merits issue our Court has allowed a hard case to make bad law
presented--deciding which legal test should govern today.[45]
church-property disputes--is squarely resolved in today's
companion case,[43] so a dismissal here would not The Court may come to rue its decision to assert
unduly delay authoritative resolution or work any direct-appeal jurisdiction in this case. Our rules seem to
irreparable harm. mandate our exercise of such jurisdiction in cases where
a permanent injunction is based on the constitutionality
III. Conclusion of a statute (because our rules make direct-appeal
jurisdiction discretionary only in temporary injunction
Our characterizations of direct-appeal jurisdiction, cases).[46] Therefore, in addition to encroaching on the
something we have " strictly construed," are not Legislature's constitutional prerogative to define our
ambiguous: direct-appeal jurisdiction, the Court's decision may
perversely require this Court to immediately hear all
o " rare" direct appeals of permanent injunctions that even vaguely
implicate a statute's constitutionality.
o " restricted"
I would dismiss this case for want of jurisdiction,
o " very limited"
and because the Court does otherwise, I respectfully
In light of this consistent clarity, the Court's dissent.
exercise of jurisdiction has an unfortunate ipse dixit
---------
quality to it. The statutory test for direct-appeal
jurisdiction is whether the trial court made its decision " Notes:
on the ground of the constitutionality of a [state] statute."
A statute, for example, must be invalidated, not just [1]Three parishes in the Diocese did not agree with the
implicated. Direct-appeal jurisdiction is a rare (as it actions and withdrew from the Diocese. The Fort Worth
should be) short-circuiting of the usual rules, and I Corporation transferred property used by the withdrawing
respectfully take exception to broadening the exception. parishes to them.

The power of judicial review--the authority to [2]The defendants sought mandamus in the court of
appeals regarding whether the attorneys for TEC had v. Del Rio , 67 S.W.3d 85, 98 n.4 (Tex. 2001) (Phillips,
authority to file suit on behalf of the Corporation and the C.J., dissenting) (" Since 1981, the Court's appellate
Diocese. See In re Salazar, 315 S.W.3d 279 (Tex. jurisdiction has extended to all civil cases 'as . . . provided
App.--Fort Worth 2010, orig. proceeding). The court of . . . by law,' Tex. Const. art. V, § 3, so that the Legislature
appeals conditionally granted mandamus relief, holding could now provide for direct appeals without a specific
they did not. Id. at 285-86. constitutional grant of authority." ). Accordingly, the
Legislature has now provided for direct appeal from
[3]The Diocese also asserts that we should dismiss certain trial court rulings that involve Public Utility
certain tort claims TEC brought against individual Commissi

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4050134. Public record. Not legal advice.