In a multi-million dollar case concerning the application of anti-suit injunctions to domesticated final judgments, the Houston [14th] Court of Appeals has conditionally granted relator RDF Agent, LLC’s petition for writ of mandamus, finding the lower court abused its discretion by issuing a temporary injunction on post-judgment discovery after their plenary power had expired.

In Re RDF Agent, LLC, Relator (No. 14-23-00967-CV; December 31, 2024) arose from a failed venture to finance a multifamily real estate project in Arizona. To finance their project, Respondents (Electric Red Ventures, LLC, Monzer Hourani, and Manfred Co.) executed a “Term Sheet” with RDF in July 2021, giving RDF the exclusive right to provide them (Respondents) loans for 60 days. However, in March 2022, RDF notified them that the Term Sheet’s exclusivity provision had been breached and demanded damage payments. Respondents sued a month later in Harris County, seeking a declaratory judgment that they did not breach the Term Sheet. RDF countersued Respondents in New York state court for a breach of contract. Respondents moved to dismiss the action under the “first-to-file” rule but were denied by the New York court, finding that “[t]he parties’ dispute ha[d] a substantial connection to New York” and that the Respondents had filed in Texas to “gain a tactical advantage”. The New York court entered final judgment against the Respondents for $3,397,093.14.

On August 16, 2023, pursuant to the Uniform Enforcement of Foreign Judgments Act, RDF filed a “Notice of Domestication of a Foreign Judgment” in a Harris County district court. Respondents filed a motion to strike the notice and a motion for new trial, which were overruled by operation of Rule 329(b) – Time for Filing Motions (Tex. R. Civ. P. 329b). Respondents subsequently filed a motion to quash and a motion for a protective order requesting the trial court prohibit RDF from conducting post-judgment discovery in Texas. They also filed an “Application for Anti-Suit Injunction Regarding Post-Judgment in New York.” The trial court granted Respondents’ motion to quash, issued a protective order, and granted a temporary injunction that effectively barred RDF from conducting any post-judgment discovery concerning Respondents’ assets. The court further enjoined RDF from requesting compliance with any court order compelling post-judgment discovery, “including any pending order in the New York action.” RDF sought mandamus relief.

In an opinion by Justice Hassan, joined by Justice Jewell and Justice Wilson, the court of appeals rejected Respondents’ mootness argument. The court reasoned that even though Respondents accepted a single post-judgment discovery order, their temporary injunction still broadly prohibited RDF from requesting compliance with any post-judgment discovery in New York, thereby leaving substantial room for “justiciable controversy” (See Heckman v. Williamson Cnty., 369 S.W.3d at 162). Respondents also claimed RDF’s appeal was moot because it failed to challenge the trial court’s protective order granting the same relief as the injunction. The court rejected this argument as well, observing that the protective order instructed RDF only to discontinue post-judgment discovery “in Texas” with respect to the domesticated New York final judgment.

Turning to the temporary injunction on the New York action, the court of appeals granted RDF’s petition for writ of mandamus. The issuance of a “void order”—typically made after the court’s plenary power has expired—is an abuse of discretion warranting mandamus relief (Custom Corps., Inc., 207 S.W.3d at 838; see also In re Fluid Power Equip., Inc., 612 S.W.3d at 136). The court stated that because the trial court’s plenary power had expired on November 29, 2023, 30 days after the Respondents’ motion to strike and motion for new trial had been overruled (see Tex. R. Civ. P. 329b(3)), the court’s issuance of a temporary injunction on December 20, 2023 was void. The court cited a similar situation in Choudhri v. Latif & Co., No. 14-14-00235-CV, 2014 WL 2854875 (Tex. App.-Houston [14th Dist.] June 3, 2014, no pet.) (mem. op.), in which the trial court, whose plenary power had already expired, issued a temporary injunction exceeding the limited scope of its power to prohibit the assertion of res judicata and collateral estoppel in a parallel proceeding. As in Choudhri, because the trial court’s temporary injunction, ordered after the expiration of plenary power, imposed new obligations beyond those of the domesticated foreign judgment, the court of appeals declared the order void. It thus conditionally granted the writ and directed the trial court to vacate the temporary injunction.

One can hardly fault the Respondents from pulling out all the stops to block post-judgment discovery targeting the assets necessary to pay a $4 million judgment, but it’s harder to see why the trial court seemed willing to go along with it, particularly after the somewhat dilatory way in which the matter played out.

TCJL Research Intern Shaan Rao Singh researched and substantially drafted this article.

Pin It on Pinterest

Share This