ABP Holdings, Inc. Frankey J. Anderson, Antonio D. Partee and Wemyth Dewayne Breckenridge v. Rainbow International LLC

CourtCourt of Appeals of Texas
DecidedDecember 15, 2021
Docket10-21-00122-CV
StatusPublished

This text of ABP Holdings, Inc. Frankey J. Anderson, Antonio D. Partee and Wemyth Dewayne Breckenridge v. Rainbow International LLC (ABP Holdings, Inc. Frankey J. Anderson, Antonio D. Partee and Wemyth Dewayne Breckenridge v. Rainbow International LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ABP Holdings, Inc. Frankey J. Anderson, Antonio D. Partee and Wemyth Dewayne Breckenridge v. Rainbow International LLC, (Tex. Ct. App. 2021).

Opinion

IN THE TENTH COURT OF APPEALS

No. 10-21-00122-CV

ABP HOLDINGS, INC., FRANKEY J. ANDERSON, ANTONIO D. PARTEE AND WEMYTH DEWAYNE BRECKENRIDGE, Appellants v.

RAINBOW INTERNATIONAL LLC, Appellee

From the 74th District Court McLennan County, Texas Trial Court No. 2021-142-3

MEMORANDUM OPINION

The trial court denied ABP Holdings, Inc., Frankey J. Anderson, Antonio D.

Partee, and Wemyth Dewayne Breckenridge's motion to dismiss and motion to compel

arbitration and granted a temporary injunction in favor of Rainbow International, LLC.

ABP, Anderson, Partee, and Breckenridge bring this interlocutory appeal complaining

of the trial court's orders. We will affirm. Factual and Procedural Background

In November 2016 Anderson, Partee, and Breckenridge entered into a ten-year

franchise agreement with Rainbow. Shortly thereafter in February 2017 the franchise

agreement was assigned by Anderson, Partee, and Breckenridge to the Tennessee

corporation ABP Holdings, Inc. of which Anderson, Partee, and Breckenridge were

principal shareholders. The assignment agreement, in addition to assigning the

franchise to ABP, provided that Anderson, Partee, and Breckenridge would guarantee

"the prompt and complete performance of all terms contained in the [franchise]

agreement." By August 2019 Rainbow determined ABP, Anderson, Partee, and

Breckenridge were in default under the terms of the franchise agreement. Some efforts

were made to cure the alleged default but by April 2020 Rainbow sent a notice of intent

to terminate the franchise agreement. Ultimately, Rainbow terminated the franchise

agreement in July 2020. Subsequently Rainbow obtained information that led it to

believe that ABP, Anderson, Partee, and Breckenridge were in violation of their post-

termination obligations to Rainbow under the franchise agreement. In January 2021

Rainbow filed suit against ABP, Anderson, Partee, and Breckenridge. Rainbow's

lawsuit ultimately sought injunctive relief and monetary damages against ABP,

Anderson, Partee, and Breckenridge for their violation of a covenant not to compete

contained in the franchise agreement. ABP, Anderson, Partee, and Breckenridge filed a

ABP Holdings. v. Rainbow International Page 2 motion to dismiss Rainbow’s claims, or alternatively, to compel arbitration. 1 After a

hearing on ABP, Anderson, Partee, and Breckenridge's motion to dismiss and/or to

compel arbitration and Rainbow's request for temporary injunctive relief the trial court

denied the motion to dismiss and/or to compel arbitration and granted a temporary

injunction in favor of Rainbow. ABP, Anderson, Partee, and Breckenridge then

instituted this appeal.

Issues

ABP, Anderson, Partee, and Breckenridge assert in three issues that the trial

court erred. The three issues are as follows:

Whether the lower court abused its discretion where, instead of referring the lower court action to arbitration upon finding the existence of a valid arbitration agreement as required by Texas law, the court deprived the appellants of their expected arbitration by implementing an exception to arbitration clause that was unconscionable in that it rendered the franchise agreement’s arbitration clause illusory.

Whether the appellee was entitled to equitable relief in the form of a temporary injunction where it failed to demonstrate that it had no adequate remedy at law.

Whether the lower court’s temporary injunction against the appellants must be voided and dissolved where, inter alia, it fails to comply with Texas Rule of Civil Procedure 683 in that it merely recites conclusory statements and fails to state or explain to any degree of specificity what probable, imminent or irreparable harm the appellee will suffer without the injunctive relief.

1 Rainbow's live petition at the time ABP, Anderson, Partee, and Breckenridge filed their motion to dismiss included claims for breach of contract, suit on guaranty, misappropriation, conversion, tortious interference with existing contracts and business relations, and injunctive relief. By the time the trial court heard ABP, Anderson, Partee, and Breckenridge's motion to dismiss, Rainbow's live petition (its first amended petition) limited its claims to breach of contract, suit on guaranty, and a request for injunctive relief.

ABP Holdings. v. Rainbow International Page 3 Jurisdiction

Appellate courts have jurisdiction to consider appeals of interlocutory orders

only if a statute explicitly provides such jurisdiction. Stary v. DeBord, 967 S.W.2d 352,

352–53 (Tex. 1998) (per curiam). We strictly construe statutes authorizing interlocutory

appeals because they are a narrow exception to the general rule that interlocutory

orders are not immediately appealable. CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex.

2011). We must first determine whether we have jurisdiction over this interlocutory

appeal. See Zachary v. SIS-Tech Applications, LLP, 01-10-00834-CV, 2011 WL 2089767, at

*2 (Tex. App.—Houston [1st Dist.] May 19, 2011, no pet.); see also Jones v. Tex. Dep't of

Criminal Justice--Institutional Div., 318 S.W.3d 398, 401 (Tex. App.—Waco 2010, pet.

denied). The matters at issue in this appeal arise from the trial court's (1) denial of a

motion to refer the case to arbitration, and (2) grant of a temporary injunction.

An interlocutory appeal to the court of appeals regarding a matter subject to the

Federal Arbitration Act is authorized by the Texas Civil Practice and Remedies Code

under the same circumstances as would a federal district court's order under title 9,

section 16, of the United States Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.016

and 9 U.S.C.A. § 16 (West). "Section 16 of the Federal Arbitration Act ("FAA"), 9 U.S.C.

§ 16, governs appellate review of arbitration orders." Apache Bohai Corp., LDC v. Texaco

China, B.V., 330 F.3d 307, 309 (5th Cir. 2003). "Congress's intent in enacting § 16 was to

favor arbitration, and it did so by authorizing immediate appeals from orders

ABP Holdings. v. Rainbow International Page 4 disfavoring arbitration and forbidding immediate appeals from orders favoring

arbitration." Id. (internal footnote omitted). Federal Courts of Appeal have appellate

jurisdiction over interlocutory district court orders denying requests to compel

arbitration and to stay litigation by virtue of 9 U.S.C. § 16(a)(1). Iberia Credit Bureau, Inc.

v. Cingular Wireless LLC, 379 F.3d 159, 165 (5th Cir. 2004) (citing Am. Heritage Life Ins. Co.

v. Lang, 321 F.3d 533, 536 (5th Cir. 2003)). Parties may expressly agree to arbitrate under

the FAA. In re Rubiola, 334 S.W.3d 220, 223 (Tex. 2011) (citing In re AdvancePCS Health

L.P., 172 S.W.3d 603, 605–06 & n. 3 (Tex. 2005) (per curiam)). The arbitration agreement

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ABP Holdings, Inc. Frankey J. Anderson, Antonio D. Partee and Wemyth Dewayne Breckenridge v. Rainbow International LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/abp-holdings-inc-frankey-j-anderson-antonio-d-partee-and-wemyth-texapp-2021.