Lionheart Company, Inc. v. PGS Onshore, Inc.

• Court: Court of Appeals of Texas
• Decided: June 13, 2007
• Docket: 10-06-00303-CV
• Status: Published

Opinion

IN THE

TENTH COURT OF APPEALS

 

No. 10-06-00303-CV

Lionheart Company, Inc.,

                                                                                    Appellant

 v.

PGS Onshore, Inc.,

                                                                                    Appellee

From the 87th District Court

Leon County, Texas

Trial Court No. 0-06-291

memorandum Opinion

            In this interlocutory appeal, Appellant Lionheart Company, Inc. complains in two issues that the trial court abused its discretion in granting a temporary injunction in favor of Appellee PGS Onshore, Inc. and in denying Lionheart’s request for a temporary injunction.  We will affirm.

            The standard of review in determining whether the trial court erred in granting or denying a temporary injunction is abuse of discretion.  Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002).  “A reviewing court should reverse an order granting injunctive relief only if the trial court abused that discretion.  The reviewing court must not substitute its judgment for the trial court’s judgment unless the trial court’s action was so arbitrary that it exceeded the bounds of reasonable discretion.”  Id. (citations omitted).

A temporary injunction’s purpose is to preserve the status quo of the litigation’s subject matter pending a trial on the merits.  A temporary injunction is an extraordinary remedy and does not issue as a matter of right.  To obtain a temporary injunction, the applicant must plead and prove three specific elements:  (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim.  An injury is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard.

Id. (citations omitted).

            Lionheart is a Texas corporation that owns an approximately 2,700-acre tract of land in Leon and Robertson counties known as Castlemane Farms, a sanctuary for wild and exotic animals such as giraffes, zebras, and wildebeests.  Lionheart entered into a December 2, 2005 oil and gas lease with First Source, which assigned the lease to Chesapeake Exploration.  Under the lease, Lionheart was paid $975,000 and the lessee obtained the right to explore for, develop, and produce oil and gas.  The lease provided for a $100,000 penalty if a test well were not drilled in the first year of the lease.

            PGS Onshore, Inc. was hired to conduct 3-D seismic surveying and testing in a 300-square-mile area that included Castlemane.  Disputes arose between PGS and Lionheart, in part over PGS’s tree-cutting and planned seismic-hole drilling.  On July 7, 2006, PGS sued Lionheart and sought a temporary restraining order and temporary and permanent injunctions.  PGS later asserted a declaratory judgment cause of action against Lionheart and requested the trial court to declare the parties’ rights under the lease.  On July 21, the trial court issued a temporary restraining order that enjoined Lionheart from interfering with PGS’s right to enter and perform 3-D seismic testing and from harassing PGS’s employees while they were on Lionheart’s land.  Lionheart counterclaimed against PGS for negligence and fraud and also sought injunctive relief.

The trial court found that PGS would probably prevail at trial and entered a temporary injunction that enjoined Lionheart from interfering with PGS’s right to enter and perform 3-D seismic testing and from harassing PGS’s employees while they were on Lionheart’s land.  The trial court did order PGS to follow the terms of the lease, but it otherwise denied Lionheart’s request for injunctive relief.  This appeal followed.

Lionheart’s first issue asserts that the trial court abused its discretion in granting PGS’s request for a temporary injunction because PGS failed to establish (1) any interference by Lionheart with PGS’s operations and (2) irreparable harm.  Based on the following evidence, we find that the trial court did not abuse its discretion in granting PGS the temporary injunction:

·        Lionheart refused to sign a permit to allow PGS on Castlemane.

·        A lock had been changed on a gate that PGS had previously used and PGS was unable to access Castlemane.

·        Michael Brown, Lionheart’s owner, said he was going to do his best to protect the animals and their habitat.

PGS offered the following evidence on irreparable harm:

·        The seismic survey had to be shot in a fluid and flowing manner and that denial of access to Castlemane would interrupt the seismic operation.

·        If there is an interruption in the seismic shooting schedules, PGS will be irreparably harmed because of the damage to its reputation in the oil and gas industry.

For purposes of injunctive relief, no adequate remedy at law exists if damages are incapable of calculation, and an injured reputation cannot be readily restored with money.  AIG Risk Mgmt., Inc. v. Motel 6 Operating, L.P., 960 S.W.2d 301, 309 (Tex. App.—Corpus Christi 1997, no pet.).  Additionally, because loss of business reputation damages are not recoverable damages for breach of contract, the damages PGS may suffer during this suit’s pendency are different from any damages PGS may recover on its claim to enforce the lease.  See UMLIC VP LLC v. T & M Sales & Environmental Sys’s., Inc., 176 S.W.3d 595, 614 (Tex. App.—Corpus Christi 2005, pet. denied).

The trial court’s temporary injunction, which we find to be sufficiently specific, effectively preserves the status quo under the lease; it provides for PGS to access the property for oil and gas exploration (seismic surveying and testing), and it requires PGS to comply with the lease’s terms.  The trial court did not abuse its discretion.  We overrule Lionheart’s first issue.

In its second issue, Lionheart asserts that the trial court abused its discretion in denying Lionheart’s request for a temporary injunction, asserting that Lionheart established (1) breaches of the lease regarding its “no drilling” area to include planned seismic holes and the cutting of trees in excess of two inches in diameter, and (2) imminent and irreparable harm from those breaches.

The lease included a 650-acre “no drilling” area that Brown had negotiated with First Source.  The parties offered conflicting evidence on whether the “no drilling” provision included the drilling of seismic holes, or whether that provision was limited to drilling oil or gas wells for production.  The lease prohibited the cutting of standing timber and trees that were in excess of two inches in diameter without Lionheart’s consent, which could not unreasonably be withheld.  A survey crew cut down approximately fifteen yaupon holly bushes or trees (some of which appeared to be greater than two inches in diameter) for surveying purposes, and there was conflicting evidence on whether they were bushes or trees.  Based on this conflicting evidence, the trial court did not abuse its discretion in failing to find that Lionheart probably would prevail on the merits.

The trial court also did not abuse its discretion in failing to find that Lionheart would suffer imminent and irreparable harm.  There was evidence that PGS was required by law to plug and fill in any seismic holes and that if the holes were properly plugged and filled in, they would not pose a threat to the animals.  And with regard to the fifteen of the ranch’s one thousand or so yaupon bushes or trees that were cut down, Lionheart can be monetarily compensated should it prevail at the trial on the merits.  See Withrow v. Armstrong, 2006 WL 3317714, at *3-4 (Tex. App.—Waco Nov. 16, 2006, pet. denied) (mem. op.) (affirming damages award for poisoned cypress tree).  Therefore, the trial court did not abuse its discretion in failing to find that Lionheart would suffer imminent and irreparable harm.  We thus overrule Lionheart’s second issue.

The trial court’s order granting a temporary injunction and its denial of Lionheart’s request for a temporary injunction are affirmed.

BILL VANCE

Justice

Before Chief Justice Gray,

            Justice Vance,

Justice Reyna

Affirmed

Opinion delivered and filed June 13, 2007

[CV06]