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Propst v. Propst

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

June 27, 2019

CHRISTOPHER M. PROPST AND STRIDE INVESTMENTS, LLC, Appellants,
v.
GREGORY K. PROPST, INDIVIDUALLY AND DERIVATIVELY ON BEHALF OF RIOSTAR SOLUTIONS, INC., Appellees.

          On appeal from the 275th District Court of Hidalgo County, Texas.

          Before Justices Benavides, Hinojosa, and Perkes

          MEMORANDUM OPINION

          GREGORY T. PERKES JUSTICE

         In September 2016, Appellees RioStar Solutions, Inc. (RioStar) and RioStar co-owner Gregory K. Propst (Greg) filed suit and application for injunctive relief against appellants RioStar co-owner Christopher M. Propst (Chris) and his management and consultant company Stride Investments, LLC. (Stride), alleging breach of fiduciary duty, civil conspiracy, violations of the Texas Civil Theft Act, and tortious interference with contract. In October 2016, the trial court entered a temporary injunction order.[1] In June 2018, the trial court signed an order extending the 2016 temporary injunction following hearings on appellees' request for enforcement of the 2016 temporary injunction and appellants' motion to dissolve the 2016 temporary injunction.

         Appellants bring this interlocutory appeal from the trial court's 2018 temporary injunction order. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014. By two issues, appellants argue that the trial court (1) entered an invalid[2] temporary injunction order, and (2) abused its discretion in denying appellants' motion to dissolve the temporary injunction. The temporary injunction order at issue, however, expired by its own terms on September 24, 2018. The interlocutory appeal is therefore moot, and we dismiss the appeal for want of subject-matter jurisdiction.

         I. Background

         On July 31, 2013, RioStar, a Texas corporation, was created and incorporated. At its inception, RioStar was owned in equal shares by relatives, Chris and Greg. On August 23, 2013, RioStar entered into an "Independent Contractor/Sales Agent Agreement" with Patterson Freight Systems, Inc. (Patterson). Under the contract, Patterson provided RioStar with sales and operational materials, including an email domain and computer software that tracked RioStar's business transactions and customer lists. On October 1, 2013, RioStar entered into a "Management Services Agreement" with Stride.

         By mid-2016, the relationship between Chris and Greg had deteriorated, which adversely affected RioStar. On August 31, 2016, RioStar received a termination notice from Patterson. Chris and Greg, on behalf of RioStar, requested a termination extension date, and Patterson agreed to extend the termination date until September 26, 2016.[3]

         On September 20, 2016, Greg filed suit and an application for temporary injunction against Chris and Stride.[4] Meanwhile, on behalf of Stride, Chris executed a new contract with Patterson on September 27, 2016; Stride then subsumed use of RioStar's former software and email account.

         On October 19, 2016, the trial court entered a temporary injunction order requiring Chris to: (1) "pay RioStar a royalty of 10% of the gross brokerage or $10, 000, which ever is greater, during the term of the Temporary Injunction"; (2) provide "weekly reports to RioStar of all brokerage activity"; (3) resign as RioStar's director and officer; (4) terminate Stride's contract with RioStar; and (5) turn over electronics used by former RioStar employees, including his personal laptop and cell phones, to counsel for a forensic sweep. The court additionally ordered:

[t]his Temporary Injunction Order shall remain effective until the trial on the merits set for 9:00 o'clock a.m., on the 1st day of May 1, 2017, in the Courtroom of the 275th Judicial District Court, Hidalgo County, Texas, unless dissolved or modified sooner by Order of this Court.

         The case did not proceed to trial on May 1, 2017. On May 24, 2017, appellees filed a motion to hold appellants in contempt for failure to comply with the 2016 temporary injunction, to extend the temporary injunction, and to enforce the temporary injunction. Appellants responded by filing a motion to dissolve, deny removal, or modify the temporary injunction, and alternatively, appellants requested a bond increase. Although the court held the injunction evidentiary hearing on May 30, 2017, and multiple hearings thereafter on this matter, the second temporary injunction order was not signed until June 19, 2018.

         The trial court's order took "judicial notice of all prior proceedings, the pleadings, including the evidence presented, the pleadings, responses and arguments of counsel, [and found] that the Temporary Injunction issued on October 19, 2016 should be extended." The court specifically ordered that: "[T]his Temporary Injunction Order shall remain effective until the trial on the merits set for 10:00 o'clock a.m., on the 24th day of September, 2018, in the Courtroom of the 275th Judicial District Court, Hidalgo County, Texas."

         II. Applicable ...


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