Auburn Investments, Inc. v. LYDA Swinerton Builders, Inc. and NSHE TX Gainsville, LLC ( 2008 )

i i i i i i
MEMORANDUM OPINION
No. 04-08-00067-CV
AUBURN INVESTMENTS, INC.,
Appellant
v.
LYDA SWINERTON BUILDERS, INC. and NSHE TX GAINSVILLE, LLC,
Appellees
From the 37th Judicial District Court, Bexar County, Texas
Trial Court No. 2006-CI-11003
Honorable Karen Pozza, Judge Presiding
Opinion by: Sandee Bryan Marion, Justice
Sitting: Catherine Stone, Justice
Sandee Bryan Marion, Justice
Steven C. Hilbig, Justice
Delivered and Filed: July 30, 2008
AFFIRMED
Appellant Auburn Investments, Inc. appeals from the trial court’s denial of its request for a
temporary injunction against Lyda Swinerton Builders, Inc. and NSHE TX Gainsville, LLC.
Because we cannot conclude the trial court abused its discretion in denying the temporary injunction,
we affirm.
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FACTUAL AND PROCEDURAL BACKGROUND
Auburn Investments, Inc. (“Auburn”) owns the Drury Inn and Suites (“Drury”) in downtown
San Antonio. Lyda Swinteron Builders, Inc. (“Lyda”) is constructing a Marriott Courtyard Hotel,
next door to the Drury, for appellees NSHE TX Gainsville, LLC (“NSHE TX”). Some portions of
the Drury and the Marriott are separated by just seven feet. The construction has created dust, debris,
and noise.
Auburn sued Lyda and NSHE TX in July 2006 under theories of trespass, tortious
interference with prospective relations, and nuisance. On December 5, 2007, after the construction
phase had begun, Auburn filed its Amended Application for Temporary Injunction, alleging trespass,
loss of business goodwill, and nuisance. The application asked the court to: 1) halt construction of
the Marriot until actions are taken to stop the trespass onto Auburn’s property by “persons,
equipment, vehicles, debris, tower cranes, [and] construction materials”; 2) limit construction to the
hours between 8 a.m. and 6 p.m.; and 3) compel compliance with certain standards of the federal
Occupational Safety and Health Administration that require construction sites to prevent falling
debris outside its exterior walls.
On December 10, 2007, prior to the injunction hearing, the parties signed a Rule 11
agreement that, among other things, called for Lyda to: 1) restrict its work “that generates any
significant level of noise” to the hours between 8 a.m. and 10:00 p.m. each day; 2) direct lighting
from a tower crane onto the construction site and erect screens to prevent light from shining onto the
Auburn’s property; and 3) erect eight-foot-tall screens around concrete pours to prevent concrete
debris from migrating to Auburn’s property.
The agreement called for Drury’s owner, Rick Drury, and Lyda’s construction manager, Dan
Wetting, to jointly observe a concrete pour on December 11, 2007, in order to identify and resolve
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problems. Also, the parties agreed the terms of the Rule 11 agreement would have no precedential
value and would not be used as evidence in court or as the basis for seeking similar relief in court.
On January 14, 2008, the trial court proceeded with the remaining issues in Auburn’s
application for a temporary injunction concerning dust and debris. In its opening statement, Auburn
asked for “injunctive language that prohibits [Lyda] from having debris land on our property.”
Testimony and exhibits, which included photographs and construction materials, focused on the
issue of dust and debris. According to evidence produced at the hearing to consider the temporary
injunction, Auburn has refunded money to perhaps ten customers who were annoyed by the
construction next door, in addition to offering credits or discounts to others. At the hearing, Rick
Drury testified he has personally picked up nails, lumber, and bits of concrete that have fallen from
the neighboring construction project onto the hotel property. He testified two cars had been
splattered with concrete, while a security guard testified she had been struck, but not injured, by a
small piece of falling debris. Drury also testified that he worried the hotel would lose customers and
long-term goodwill among guests as the construction continues.
The trial court denied the temporary injunction, and this accelerated appeal followed.
STANDARD OF REVIEW
A trial court has broad discretion in deciding whether to grant or deny a temporary injunction.
Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002); Wu v. City of San Antonio, 216
S.W.3d 1, 4 (Tex. App.—San Antonio 2006, no pet.). We review the grant or denial of a temporary
injunction for a clear abuse of discretion without addressing the merits of the underlying case.
Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993); Ireland v. Franklin, 950 S.W.2d 155, 157 (Tex.
App.—San Antonio 1997, no writ). An appellate court will uphold the trial court’s order unless the
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trial court’s action was so arbitrary that it exceeded the bounds of reasonable discretion. Butnaru,
84 S.W.3d at 204. In an appeal from an order granting or denying a request for a temporary
injunction, appellate review is confined to the validity of the order that grants or denies the injunctive
relief. Universal Health Servs., Inc. v. Thompson, 24 S.W.3d 570, 576 (Tex. App.—Austin 2000,
no pet.). We may neither substitute our judgment for that of the trial court nor consider the merits
of the lawsuit. Id. Instead, we view the evidence in the light most favorable to the trial court’s order,
indulging every reasonable inference in its favor, and determine whether the order was so arbitrary
as to exceed the bounds of reasonable discretion. Id. When, as here, no findings of fact or
conclusions of law are requested or filed, we must uphold the trial court’s judgment on any legal
theory supported by the record. See, e.g., Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978); Seaman
v. Seaman, 425 S.W.2d 339, 341 (Tex. 1968).
DISCUSSION
To obtain a temporary injunction, the applicant must plead and prove three specific elements:
(1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a
probable, imminent, and irreparable injury in the interim. Butnaru, 84 S.W.3d at 204; City of San
Antonio v. Vakey, 123 S.W.3d 497, 499 (Tex. App.—San Antonio 2003, no pet.). An injury is
irreparable if the injured party cannot be adequately compensated in damages or if the damages
cannot be measured by any certain pecuniary standard. Butnaru, 84 S.W.3d at 204. In its Amended
Application for Temporary Injunction, Auburn complained it had suffered — and would continue
to suffer — probable, imminent, and irreparable injury due to the loss of goodwill and the risk of
injury to its guests or employees by falling debris.
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1. Loss of goodwill
Goodwill is property and, as such, its owner may recover for damages to it. Texas & P. Ry.
Co. v. Mercer, 90 S.W.2d 557, 560 (1936). Goodwill is generally understood to mean the
advantages that accrue to a business on account of its name, location, reputation, and success.
Swinnea v. ERI Consulting Eng’g, Inc., 236 S.W.3d 825, 837 (Tex. App.—Tyler 2007, pet. filed);
Taormina v. Culicchia, 355 S.W.2d 569, 574 (Tex. Civ. App.—El Paso 1962, writ ref’d n.r.e.). The
value of the goodwill “depends upon the fixed and favorable consideration of customers arising from
an established and well-known and well-conducted business.” Taormina , 355 S.W.2d at 574.
Here, Oscar Cepeda, general manager of the Drury hotel, testified that some customers had
complained about noise or debris. Cepeda claimed the hotel’s occupancy rate had declined due to
the construction, to which Lyda objected on the ground that Auburn had not established a foundation
for its assertion. The court sustained Lyda’s objection and rejected Cepeda’s testimony as
speculation, stating:
If [Cepeda] wants to say people have come and complained and left,
I understand that. [H]e can testify to that. [I]f he wants to say
occupancy was this percent one year and occupancy was this percent
another year . . . it would require significant analysis . . . to say what’s
causing that. I think you need Chamber of Commerce numbers and
visitor numbers and sporting events that happened this year . . . . And
so that’s my concern with blaming that occupancy rate decrease on
this construction.
Auburn argues that its loss of customers is incalculable goodwill because a guest who suffers
a bad experience will perhaps choose not to stay in a Drury property again, and will likely tell other
persons about his bad experience, causing a further loss of revenue. Although the loss of business
goodwill may be sufficient to show irreparable injury for purposes of a temporary injunction, such
a loss cannot be left to speculation because, at a minimum, opinions must be based on objective
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facts, figures or data from which the loss of goodwill may be ascertained. See Hicks Oil & Butane
Co. v. Garza, No. 04-05-00836-CV, 2006 WL 2263896, at *2 (Tex. App.—San Antonio August 9,
2006, no pet.) (mem. op, not designated for publication) (quoting Helena Chem. Co. v. Wilkins, 47
S.W.3d 486, 504 (Tex 2001)). Here, after the trial court stated its concern, Auburn did not connect
the decline in occupancy rate to the dust and debris. Therefore, the trial court had no objective facts,
figures or data from which the loss of goodwill could be ascertained.
2. Risk of injury to guests or employees
Auburn claimed its guests and employees are in danger of imminent injury by falling debris
or some similar construction-related accident. Imminent injury must be proven to obtain injunctive
relief. Butnaru, 84 S.W.3d at 204; City of San Antonio, 123 S.W.3d at 501. The purpose of
injunctive relief is to halt wrongful acts that are threatened or in the course of accomplishment, rather
than to grant relief against past actionable wrongs or to prevent commission of wrongs not
imminently threatened. See Tex. Health Care Info. Council v. Seton Health Plan, Inc., 94 S.W.3d
841, 853 (Tex. App.—Austin 2002, pet. denied). Injunctive relief is not proper, however, when the
party seeking the injunction has mere fear or apprehension of the possibility of injury. Harbor
Perfusion, Inc. v. Floyd, 45 S.W.3d 713, 716 (Tex. App.—Corpus Christi 2001, no pet.). Here, a
security guard at the Drury testified she was struck by a small piece of debris she said fell from the
construction site. Fortunately, she was not injured. Also, Auburn presented an array of construction
debris it said it collected from its property, consisting mostly of nails and other small items, as well
as a thirteen-foot two-by-four covered with nails, wire, and concrete.
Lyda challenged the veracity of Auburn’s claims of imminent harm. Dan Wettig, Lyda’s
construction manager, testified in a lengthy narrative on direct examination that his company had
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tried without success to gain the cooperation of Auburn. Wettig’s testimony that his personnel were
not permitted on the Drury property to observe the problem from Auburn’s perspective was not
challenged. Auburn also did not dispute Wettig’s testimony that his own personnel checked into the
Drury hotel in order to gain access to the property, but when they were discovered, they were asked
to leave. Wettig expressed doubt that the thirteen-foot two-by-four had actually fallen from the
heights of the construction onto the Drury property. Similarly, Marriott property owner Richard
Finvarb testified that Auburn, while alleging fear of imminent injury to its workers or guests, was
more interested in collecting debris for trial exhibits instead of showing Lyda problems as they
occurred so that the problems could be corrected immediately. Finvarb testified he would have
preferred to work cooperatively with Auburn.
Considering the evidence in the light most favorable to the trial court’s order, we conclude
Auburn’s concern about the danger of imminent injury from falling debris or some similar
construction-related accident is based on a “fear or apprehension of the possibility of injury.”
CONCLUSION
We cannot conclude, based on this record, that the court abused its discretion in denying the
injunction. Therefore, we overrule Auburn’s issue on appeal, and affirm the trial court’s order
denying injunctive relief.
Sandee Bryan Marion, Justice
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