Freddie Records, Inc. and Freddie Martinez, Individually, and D/B/A Freddie Records, Jointly and Severally v. Ramon Ayala

Court of Appeals of Texas·Decided September 30, 2009·No. 13-07-00363-CV·Published

Opinion



NUMBER 13-07-00363-CV



COURT OF APPEALS



THIRTEENTH DISTRICT OF TEXAS



CORPUS CHRISTI - EDINBURG



FREDDIE RECORDS, INC.,

AND FREDDIE MARTINEZ, INDIVIDUALLY,

AND D/B/A FREDDIE RECORDS,

JOINTLY AND SEVERALLY, Appellants,



v.



RAMON AYALA, Appellee.

On appeal from the 370th District Court of Hidalgo County, Texas.



MEMORANDUM OPINION



Before Justices Yañez, Garza, and Vela

Memorandum Opinion by Justice Yañez
This is an interlocutory appeal of an anti-suit injunction issued by a Hidalgo County district court in favor of appellee, Ramon Ayala ("Ayala"). (1) By a single issue and several sub-issues, appellants, Freddie Records, Inc. and Freddie Martinez, individually and d/b/a Freddie Records, jointly and severally ("Freddie"), challenge the anti-suit injunction. We affirm.

I. Background (2)

Ayala is a recording artist, and Freddie is a record company. Pursuant to various agreements over the years, the parties have had a business relationship whereby Ayala records "master recordings" for Freddie, and Freddie converts those recordings into albums and compact discs for sale and distribution in the United States. In the underlying litigation, the parties dispute whether obligations have been met under a recording agreement dated January 4, 1995 ("the agreement").

Ayala contends he has delivered the required number of recordings to Freddie, but that he has not been paid certain royalties and income due under the agreement. On November 8, 2006, Ayala sued Freddie in the 92nd District Court in Hidalgo County ("the Hidalgo County suit"), (3) seeking a declaratory judgment that he has met his recording obligations under the agreement. Ayala later amended his petition, adding causes of action for breach of contract and breach of fiduciary duty.

On November 21, 2006, Freddie sued Ayala in County Court at Law Number 4 in Nueces County ("Nueces County I"), (4) alleging that Ayala breached the agreement by failing to record the required number of albums and record the albums in a timely manner. On December 18, 2006, Ayala filed a plea in abatement in Nueces County I, based on an assertion that the Hidalgo County suit acquired dominant jurisdiction. After the Nueces County Court denied Ayala's plea, he filed a petition for writ of mandamus with this Court. (5) This Court stayed the proceedings in the Hidalgo County and Nueces County I suits during its consideration of Ayala's petition for writ of mandamus. (6)

On or about April 18, 2007 (during the stay and this Court's consideration of the petition for writ of mandamus), Freddie filed a second suit in Nueces County Court at Law Number 2, requesting injunctive relief ("Nueces County II"). (7) In its petition, Freddie alleged that: (1) Ayala breached the agreement by failing to deliver the required number of albums under the agreement; and (2) Ayala had recorded sufficient "masters" to constitute a new album and planned to deliver them to Sony, (8) without first delivering them to Freddie, as required under the agreement. In requesting injunctive relief, Freddie alleged that "Ayala's threatened action to deliver the Masters to Sony and not to Freddie will cause [Freddie] irreparable harm." The Nueces County II court granted a temporary restraining order on April 19, 2007, and set the temporary injunction hearing for April 30, 2007.

On April 24, 2007, Ayala filed, in his then-pending original proceeding in this Court, an emergency motion to show cause why Freddie "should not be held in contempt of court, for stay of proceedings, for sanctions, and for expedited review." In the motion, Ayala alleged that by filing the Nueces County II suit, Freddie had engaged in "a bad faith attempt to circumvent this Court's [stay order] and nullify its effect."

On April 27, 2007, this Court found the Hidalgo County court had acquired dominant jurisdiction, conditionally granted Ayala's petition for writ of mandamus, and directed the County Court at Law Number 4 to abate Nueces County I. (9) Without discussion or explanation, this Court granted Ayala expedited review of his emergency motion, but otherwise denied the relief he requested in that motion .

On April 30, 2007, in the Nueces County II suit, the Nueces County Court at Law Number 2 held the scheduled hearing on Freddie's requested temporary injunction. Counsel for Ayala did not appear at the hearing. (10) At the hearing, Freddie presented the testimony of John Martinez, an employee of Freddie. Martinez testified that: (1) Ayala owed Freddie six recordings under the agreement; and (2) Freddie had learned of Ayala's plan to release a master recording to Sony, in violation of the agreement. During the hearing, the trial court signed a temporary injunction, dated April 30, 2007, enjoining Ayala from delivering any new masters to Sony until they were first delivered to Freddie.

On May 8, 2007, in the Hidalgo County suit, Ayala filed his third amended petition, seeking: (1) the dissolution of the temporary injunction in Nueces County II; and (2) an anti-suit injunction enjoining Freddie from pursuing the Nueces County I and Nueces County II suits and from filing additional suits against Ayala. On May 22, 2007, the Hidalgo County court held a hearing on Ayala's request for an anti-suit injunction. Both parties appeared and introduced documents into the record. (11) Ayala was the only witness who presented testimony. On May 23, 2007, the Hidalgo County court issued an anti-suit injunction. The court stated that "[i]n order to protect [its] jurisdiction," it enjoined Freddie from:

(1) filing or pursuing any motions, pleadings, or any other papers, other than an unconditional dismissal or abatement, in the First or Second Nueces County Court cases, or otherwise prosecuting these cases in any manner, including any enforcement of the Temporary Injunction in the Second Nueces County Court Case;

(2) filing any original petitions, complaints or lawsuits against Ayala in any court, forum, or jurisdiction other than this Court, based on or stemming from the claims that are made or could have been made in the First and Second Nueces County Court Cases or this cause; and

(3) taking any action to delay or prevent Ayala from fulfilling his contractual and legal obligations to Sony.

The court also made the following additional findings:

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Freddie Records, Inc. and Freddie Martinez, Individually, and D/B/A Freddie Records, Jointly and Severally v. Ramon Ayala, (Tex. Ct. App. 2009).

Freddie Records, Inc. and Freddie Martinez, Individually, and D/B/A Freddie Records, Jointly and Severally v. Ramon Ayala (Freddie Records, Inc. and Freddie Martinez, Individually, and D/B/A Freddie Records, Jointly and Severally v. Ramon Ayala) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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