in Re: Darryl Daniel ( 2006 )

OPINION HEADING PER CUR

                NO. 12-06-00232-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

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IN RE: DARRYL DANIEL, §          ORIGINAL PROCEEDING

RELATOR

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MEMORANDUM OPINION

            In this original mandamus proceeding, Darryl Daniel challenges the trial court’s order denying his motion to transfer venue.¹  The issue presented is whether the trial court abused its discretion in denying Daniel’s motion to transfer venue to Nacogdoches County under the mandatory venue provision of Section 65.023(a) of the Texas Civil Practice & Remedies Code. Specifically, we have been asked to decide whether the primary relief sought in the underlying suit filed by General Shelters of Texas, S.B., Ltd. (“General Shelters”)  is the issuance of a permanent injunction, which would require that the suit be tried in Nacogdoches County, or the rendition of a declaratory judgment, which would allow the suit to be tried in neighboring Shelby County.  We hold that the primary relief sought by General Shelters is injunctive, not declaratory, and that venue in Nacogdoches County is mandatory.  Therefore, we conditionally grant the writ.

Background

            Darryl Daniel was employed by General Shelters from September 2000 until July 30, 2004. General Shelters manufactures evaporative cooling pad media (“pads”).  Prior to being hired by General Shelters, Daniel executed both a noncompete agreement and a nondisclosure agreement.  General Shelters alleges that these two agreements provide that Daniel had an ongoing contractual duty for up to two years following his employment with General Shelters not to compete with it or provide the company’s proprietary information to others. 

            General Shelters alleges in its Second Amended Original Petition that Daniel has breached these two agreements by providing proprietary information to third parties and attempting to start his own business, which manufactures pads similar to those manufactured by General Shelters.  In its prayer for relief, General Shelters states that it is seeking a declaratory judgment to declare the rights, duties, and legal relations of General Shelters and Daniel.  In addition to other relief, General Shelters seeks both a temporary and a permanent injunction against Daniel requiring him to abide by the provisions of the noncompete agreement and the nondisclosure agreement. 

            At the time he filed his original answer, Daniel also filed a motion to transfer venue asking that the case be transferred to the county of his residence, Nacogdoches County. He based his motion upon the venue statute which provides that “a writ of injunction against a party who is a resident of this state shall be tried in a district or county court in the county in which the party is domiciled.”  Tex. Civ. Prac. & Rem. Code Ann. § 65.023(a) (Vernon 1997).  General Shelters stated in its response to Daniel’s motion to transfer venue that its “primary objective” was “a declaration from the court on various issues raised by Daniel’s employment with General Shelters, his behavior while still employed with General Shelters and his activities after leaving General Shelters.” Later in its response, General Shelters stated that “issuance of a permanent injunction would be merely ancillary to a judgment awarding declaratory relief.” 

            Following a hearing on Daniel’s motion to transfer venue, the trial court entered an order denying the motion.  This original proceeding followed.  On Daniel’s motion, we stayed the proceedings in the trial court until our disposition of this proceeding.

Availability of Mandamus

            A writ of mandamus will issue only if the trial court has committed a clear abuse of discretion and the relators have no adequate remedy by appeal.  In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005).  The trial court abuses its discretion if “it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law” or if it clearly fails to correctly analyze or apply the law.  Id. (quoting Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992)).  The question of proper venue is raised by a party by simply objecting to a plaintiff’s venue choice through a motion to transfer venue.  Billings v. Concordia Heritage Ass’n, 960 S.W.2d 688, 692 (Tex. App.–El Paso 1997, pet. denied).  If the plaintiff’s chosen venue rests on a permissive venue statute and the defendant files a meritorious motion to transfer venue based upon a mandatory venue provision, the trial court must grant the motion. In re City of Dallas, 977 S.W.2d 798, 803 (Tex. App.–Fort Worth 1998, orig. proceeding).  An erroneous denial of such a motion is reviewable by mandamus.  Id.  In determining whether a lawsuit constitutes a suit for permanent injunction for the purpose of determining proper venue, we look only to the express relief sought in the allegations and prayer of the plaintiff’s petition.  Id. 

Primary Relief Sought

            A declaratory judgment simply declares the rights, status, or other legal relations of the parties without ordering anything to be done.  Id. (citing Tex. Civ. Prac. & Rem. Code Ann. § 37.003(a)(b) (Vernon 1997)).  On the other hand, the function of injunctive relief is to restrain motion and to enforce inaction.  Qwest Communications Corp. v. A T & T Corp., 24 S.W.3d 334, 336 (Tex. 2000). 

            Daniel contends that when an action for declaratory judgment is combined with injunctive relief, the injunctive relief is primary.  As authority for this contention, he cites In re Continental Airlines, Inc., 988 S.W.2d 733  (Tex. 1998).  In that case, the City of Fort Worth filed suit for a declaratory judgment to have a Tarrant County district court declare its rights under agreements with the City of Dallas as to three airlines attempting to fly out of Love Field in Dallas. Id. at 735.  After their motions to transfer venue to Dallas County were denied, the three airlines filed a petition for writ of mandamus asserting that venue was mandatory in Dallas County because the ultimate relief that the City of Fort Worth was seeking was injunctive.  Id. at 736.  In its pleadings, the City of Fort Worth sought only a declaratory judgment and never sought any relief suggesting an injunction.  Id.  However, the airlines contended that the City of Fort Worth would be able to obtain a declaratory judgment and then use injunctive remedies to enforce it.  Id.  Our supreme court determined that venue was proper in Tarrant County because “[t]he mere possibility that a defendant will disobey the final judgment of a court, causing [a plaintiff] to resort to enforce its judgment through injunction, does not transform the suit into an injunction suit under § 65.023(a).”  Id. at 736-37.  In reaching this conclusion, the court noted that “[t]he pleadings state a justiciable controversy that may be fully resolved by a declaratory judgment.” Id. at 737. 

            In its prayer, General Shelters specifically seeks injunctive relief in addition to relief under the Texas Uniform Declaratory Judgments Act.  See Tex. Civ. Prac. & Rem. Code Ann. § 37.001–37.011 (Vernon 1997 & Supp. 2005).  If the petition includes both a plea for declaratory judgment and an injunction, the primary purpose of the suit is an injunction. See In re Continental Airlines, 988 S.W.2d at 736.  Because General Shelters seeks both types of relief, this case cannot be fully resolved under the Declaratory Judgments Act.

            We are familiar with Karagounis v. Bexar County Hospital District, 70 S.W.3d 145 (Tex. App.– San Antonio 2001, pet. denied).  In that case, the plaintiff sued to enforce a contract seeking, among other remedies, to enjoin the defendants to allow him to complete a fifth year of residency training.  Id. at 146.  The court noted that the effect of granting the injunctive relief would be to compel the carrying out of the contract.  Id.   Accordingly, the court held that because the true nature of the relief being sought was specific performance of a contract, Section 65.023 did not apply.  Id. at 147.  In Karagounis, the relief the plaintiff sought was, in effect, a positive decree of specific performance.  However, performance of a contract may also be specifically enforced by an injunction restraining acts in violation of the contract, which is, in effect, a negative decree of specific performance.  67 Tex. Jur. 3d Specific Performance § 2 (2003).  In the case before us, General Shelters’s Second Amended Original Petition can be construed as an attempt to have Daniel specifically perform the nondisclosure and noncompete agreements.  Attempting to restrain Daniel from violating the agreements requires an injunction, which is a negative form of specific performance. Therefore, injunction was the primary relief sought by General Shelters, and Daniel made the showing required to invoke Section 65.023(a).

Conclusion

            Based upon our review of the record and the foregoing analysis, we conclude that the trial court should have transferred venue to Nacogdoches County under Section 65.023. Appeal is an inadequate remedy for an erroneous venue order.  Accordingly, we conditionally grant mandamus relief.  We trust that the trial court will promptly vacate its order of June 14, 2006 denying Daniel’s motion to transfer venue and enter an order transferring venue to Nacogdoches County.  The writ will issue only if the trial court fails to comply with this court’s opinion and order within ten days.  The trial court shall furnish this Court, within the time for compliance with this Court’s opinion and order, a certified copy of its order evidencing such compliance.  Our stay of July 5, 2006 is lifted.

            Writ conditionally granted.

                                                                                                     JAMES T. WORTHEN   

                                                                                                                 Chief Justice

Opinion delivered August 16, 2006.

Panel consisted of Worthen, C.J. and Griffith, J.

(PUBLISH)

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¹ The real party in interest is General Shelters of Texas, S.B., Ltd. The respondent is the Honorable Guy Griffin, Judge of the 123rd Judicial District Court, Shelby County, Texas.