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

CourtCourt of Appeals of Texas
DecidedSeptember 30, 2009
Docket13-07-00363-CV
StatusPublished

This text of 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) 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.

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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).

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

1 See T EX . C IV . P RAC . & R EM . C OD E A N N . § 51.014(a)(4) (Vernon 2008). Freddie Records, jointly and severally (“Freddie”), challenge the anti-suit injunction. We

affirm.

I. Background2

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

2 Many of the background facts are taken from this Court’s opinion in a related original proceeding. See In re Ayala, No. 13-07-140-CV, 2007 Tex. App. LEXIS 3319, at **1-5 (Tex. App.–Corpus Christi Apr. 27, 2007, orig. proceeding) (m em . op.).

3 The Hidalgo County suit was styled Ramon Ayala, Individually and d/b/a Los Bravos del Norte v. Freddie Records, Inc. and Freddie Martinez, Individually, and d/b/a Freddie Records, Jointly and Severally, and was assigned trial court cause num ber C-2660-06-A in the 92nd District Court of Hidalgo County.

4 The first Nueces County suit was assigned trial court cause num ber 06-62635-4 in Nueces County Court at Law Num ber 4. W e note that this petition is not included in the record before us, but is described in In re Ayala, 2007 Tex. App. LEXIS 3319, at **2-3.

2 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

5 See id. at *1.

6 See id. at *4.

7 The second Nueces County suit was styled Freddie Martinez, Individually and Freddie Records, Inc. v. Ramon Ayala, Individually and d/b/a Los Bravos del Norte and was assigned trial court cause num ber 07- 60924-2 in Nueces County Court at Law No. 2.

8 The agreem ent recognizes that Ayala has a contract “with Sony Record Com pany, its subsidiaries or related com panies in Mexico.”

3 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

9 See In re Ayala, 2007 Tex. App. LEXIS 3319, at **16-19.

10 Ayala later testified that he was not served with citation in the Nueces County II suit.

4 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;

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Freddie Records, Inc. and Freddie Martinez, Individually, and D/B/A Freddie Records, Jointly and Severally v. Ramon Ayala, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freddie-records-inc-and-freddie-martinez-individua-texapp-2009.