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Midway CC Venture I, LP v. O&V Venture, LLC

Court of Appeals of Texas, First District

June 29, 2017

MIDWAY CC VENTURE I, LP, Appellant
v.
O&V VENTURE, LLC, Appellee

         On Appeal from the 133rd District Court Harris County, Texas Trial Court Case No. 2016-88838

          Panel consists of Chief Justice Radack and Justices Keyes and Massengale.

          OPINION

          Sherry Radack Chief Justice

         The issue in this case is whether the district court erred by temporarily enjoining a landlord from filing a suit in justice court to evict a tenant for nonpayment of rent because of a previously-filed declaratory judgment action in the district court. Because the justice court has exclusive jurisdiction in a landlord-tenant dispute over possession, and no issue of title is involved, we hold that the trial court's order enjoining the landlord from filing an eviction suit in justice court was an abuse of discretion. Accordingly, we reverse the trial court's temporary injunction order and remand for further proceedings.

         BACKGROUND

         Midway CC Venture I, LP is the owner and landlord of certain commercial space in Houston, TX, and O&V Venture, LLC is its tenant. Their original lease was signed in 2010, and, in 2015, the parties amended the lease, whereby O&V would move out of its original lease into a temporary space while a new space was built out to accommodate O&V's plan to open a wine bar. After delays associated with obtaining the necessary permits for the space, O&V moved back into the space in August 2016. Thereafter, the parties were unable to agree regarding what rent credits, if any, O&V was entitled to because of the delayed occupation.

         On December 27, 2016, Midway sent notice to O&V that it was in default for failing to pay rent and that Midway was exercising its right to terminate O&V's possession. Midway gave O&V three days to vacate the space.

         Rather than vacate the premises, O&V filed a petition in Harris County District Court on December 30, 2016, seeking a declaratory judgment that it was entitled to certain rent credits and was not in default of the lease. O&V also sought a temporary injunction to prevent Midway from "filing any legal action seeking to dispossess [O&V] of its right to access and conduct business at the New Leased Premise."

         That same day, the ancillary judge signed a temporary restraining order ["TRO"] that enjoined Midway from "filing any legal action seeking to dispossess [O&V] of its right to access and conduct business at the New Leased Premise from the date of the entry of this order until fourteen (14) days thereafter, or until further order of this Court."

         After granting O&V's motion to extend the TRO, the trial court held a temporary injunction hearing on January 17, 2017. O&V argued that the district court had dominant jurisdiction over any justice court eviction proceeding that Midway might file, and that the declaratory relief O&V sought regarding rent credits was inextricably intertwined with whether it was entitled to possession under the lease.

         Midway responded that the doctrine of dominant jurisdiction was not applicable because the justice court has exclusive jurisdiction over an eviction proceeding that does not involve a title dispute. Midway further contended that the exclusive jurisdiction in the justice court provided O&V with an adequate remedy at law, making the granting of an injunction from filing suit in that court an abuse of discretion.

         Thereafter, the trial court signed a temporary injunction order that enjoined Midway from

taking any action to deprive [O&V] of its right to unfettered access and possession of the premise, including but not limited to: posting any signs on the premise relating to [O&V], from changing any locks, from removing any merchandise or property from the premise, or from filing any legal action seeking to dispossess [O&V] of its right to access and conduct business at the New Leased Premise from the date of entry of this order until a judgment is enter in the Declaratory Judgment action pending in this Court. (Emphasis added).

         Thereafter, Midway filed this interlocutory appeal, [1] contending that the trial ...


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