Fuel 2 Go, LLC v. Mesa Fortune, Inc.

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FUEL 2 GO, LLC AND D&R USA ENTERPRISES, INC., Appellants v. MESA FORTUNE, INC., D/B/A MESA FOOD MART INC., Appellee

No. 01-21-00546-CV

Court of Appeals of Texas, First District

October 26, 2023

On Appeal from the 270th District Court Harris County, Texas Trial Court Case No. 2021-51843

Panel consists of Justices Kelly, Hightower, and Countiss.

MEMORANDUM OPINION

Richard Hightower Justice

This interlocutory appeal involves a dispute between appellants Fuel 2 Go, LLC and D & R USA Enterprises, Inc. (D &amp R), and appellee, Mesa Fortune, Inc., doing business as Mesa Food Mart Inc. (Mesa Fortune), regarding which entity has the right to title and possession of a piece of commercial property-a convenience store. On appeal, Fuel 2 Go and D & R challenge a temporary injunction signed by the trial court ordering them, inter alia, (1) to vacate the property; (2) to return possession of the property to Mesa Fortune; (3) to not interfere with Mesa Fortune's right of possession of the property; (4) to not prevent Mesa Fortune or its customers from accessing the property; and (5) to not harass, intimidate, or threaten Mesa Fortune or its customers while they are on the property.^[1]We affirm.

Background

On August 19, 2021, Mesa Fortune filed suit against D & R and other parties, including R & K Shaik Ent. Inc. (Shaik). Mesa Fortune later amended its petition to add Fuel 2 Go as a defendant. In its second amended petition and application for injunctive relief-its live pleading-Mesa Fortune characterized the suit as one "to recover ownership and possession of a convenience store business known as Mesa Food Mart located at 8000 Mesa Drive Houston Texas, Harris County Texas 77028." Mesa Fortune also alleged:

• On September 5, 2016 "the real property and improvements" located at 8000 Mesa Drive was conveyed by deed to Shaik.

• On May 15, 2017, Shaik, as landlord, entered into a commercial lease agreement (Lease Agreement) with Mesa Fortune, as lessee, to lease "the convenience store building" at 8000 Mesa Drive (Lease Premises), and Mesa Fortune took possession of the Lease Premises on that date.

• Shaik "conveyed the real property and improvements comprising the Lease Premises," to U.S Assets Acquisition by a deed recorded on January 21, 2020, and, that same day, U.S. Assets conveyed the Lease Premises by a recorded deed to SCF RC Funding IV LLC (SCF), another defendant in the suit.^[2]

• On February 23, 2021-nearly four years after Mesa Fortune took possession of the Lease Premises-Mesa Fortune received a letter from SCF informing it that (1) SCF was the new owner of the Lease Premises, (2) Mesa Fortune needed to vacate the premises, and (3) another company would purchase Mesa Fortune's inventory.

• Mesa Fortune advised SCF that it had "a valid existing lease in place" with Shaik for the Lease Premises "prior to the conveyance" of the property to SCF "and thus . . . SCF purchased the property subject to [Mesa Fortune's] Lease and [Mesa Fortune] had the right to remain on the property pursuant to that Lease."

• On March 3, 2021, SCF advised Mesa Fortune not to pay Shaik any more rent.

• Mesa Fortune had "paid all rent, taxes, and other monies due under the terms of the Lease [Agreement] from May, 2017, up to and including February 1, 2021," but, based on SCF's instruction, Mesa Fortune did not pay any more rent to Shaik.

• On March 29, 2021, Mesa Fortune sent a letter to SCF, stating that SCF had informed it not to pay rent to Shaik and asking for direction as to whom Mesa Fortune should pay rent.

• On August 2, 2021, Shaik "executed a Special Warranty Deed . . ., purporting to convey the real property and improvements comprising the convenience store [the Lease Premises] to D & R."

• The conveyance of the Lease Premises to D & R was "void" because Shaik had conveyed the property to U.S. Assets in January 2021 and no longer had title to the property.

• On August 9, 2021, Shaik's attorney sent Mesa Fortune a "Notice of Actual Lockout for Non-payment of Rent," informing Mesa Fortune that, based on its non-payment of rent, Chapter 93 of the Property Code permitted the locks to be changed on the Lease Premises.^[3]

• On August 11, 2021, Mesa Fortune emailed SCF asking, as it had in its March 29 letter, for "direction as to who[m] to pay the rent pending the resolution of [the] matter."

• That same day, Shaik "sent an off-duty constable to the Lease Premises" to lockout Mesa Fortune for non-payment of rent, but, after Mesa Fortune informed the constable that Shaik was not the landlord, the constable left.

• On August 13, 2021, the off-duty constable returned to the Lease Premises with four other men, who removed Mesa Fortune's employee from behind the store's counter, "disconnected all the cameras in the store, left the cashier's cabin door open[,] . . . chained the front door with a lock[,] and locked [Mesa Fortune] out of the Lease Premises." Shaik "posted guards at the Lease Premises for several days."

• On August 16, 2021, Shaik and its representatives "entered the Lease Premises without a writ of possession and re-opened the convenience store business . . . and in the process [were] selling for their own use all the inventory of the convenience store," valued at $150,000 and "[took] cash in the cash register" of approximately $10,000.

• On August 17, 2021, Shaik sent Mesa Fortune a "Notice of Termination and Demand for Accelerated Rent," informing Mesa Fortune (1) that it was in default under the lease, (2) that rent for the remaining term of the lease was accelerated, (3) that-under a provision in the lease- "[the] landlord owns a security interest and lien on all the inventory, fixtures and personal property," and (4) that Mesa Fortune had no further right to possession of the Lease Premises.

• On August 20, 2021, Mesa Fortune obtained a temporary restraining order (TRO) requiring Shaik and other defendants aligned with it to vacate the Lease Premises and to return possession to Mesa Fortune.^[4]

• Fuel 2 Go claimed that it had a lease agreement for the Lease Premises with D & R, which claimed to be the owner and new landlord, entitling Fuel 2 Go, as lessee, to possession of the Lease Premises.

• Mesa Fortune asked for documentation of the lease between D & R and Fuel 2 Go, but no documentation was provided.

• On August 23, 2021, Mesa Fortune's representatives "went to the Lease Premises to obtain possession but were confronted with individuals claiming to be . . . representatives of Defendant Fuel 2 Go."

• Fuel 2 Go claimed to be in possession of the Lease Premises and refused to vacate the property.

Based on the foregoing allegations, Mesa Fortune asserted claims for conversion, trespass, and declaratory judgment, asking the trial court to declare, inter alia, that (1) neither Shaik nor D & R were the owner or landlord of the Lease Premises; (2) the special warranty deed from Shaik to D & R was void; (3) "Defendant SCF own[ed] the Lease Premises subject to [Mesa Fortune's] rights (including possession) under the Lease and that the Lease [was] binding upon Defendant SCF"; (4) Mesa Fortune had rightfully withheld rent at SCF's direction and was "not in default under the Lease Agreement"; (5) any lease between D & R and Fuel 2 Go was "void"; (6) neither "Defendant D & R [nor] Defendant Fuel 2 Go [were] entitled to possession of the Lease Premises"; and (7) Mesa Fortune was "the Tenant under the Lease Agreement . . . entitled to immediate possession of the Lease Premises."

Mesa Fortune requested damages for the conversion and trespass claims and asked for its attorney's fees. Mesa Fortune sought to interplead the rental payments that it had withheld at SCR's direction and all future rental payments into the trial court's registry until the dispute was resolved. Mesa Fortune also asked for injunctive relief-including a TRO, a temporary injunction, and a permanent injunction-requiring the defendants to vacate the Lease Premises and to return possession to Mesa Fortune.

In its answer and a later-filed "Brief on Denying [Mesa Fortune's] Temporary Injunction," D & R asserted that Mesa Fortune was not entitled to a temporary injunction. D & R claimed that it was "the record owner" of the Lease Premises, not SCF, and that Shaik had conveyed the property to D & R, along with the Lease Agreement between Shaik and Mesa Fortune.

D & R asserted that Mesa Fortune had defaulted under the Lease Agreement because it had not paid rent for several months. D & R stated that Mesa Fortune had "made no attempts to cure the default; instead, [Mesa Fortune had] filed a Petition for a Writ of Re-entry in Justice of Peace Court," which the justice court denied on August 16, 2021. D & R claimed that, after Mesa Fortune was given termination and lockout notices as required by Texas law, the lease was terminated on August 17, 2021. D & R claimed that, the following day, it had entered into a valid lease agreement with Fuel 2 Go.

D & R asserted that the trial court lacked subject-matter jurisdiction to issue a temporary injunction awarding possession of the Lease Premises to Mesa Fortune. According to D & R, only a justice of the peace court has jurisdiction "[to] decide matters of immediate possession." D & R also argued that the injunctive relief should be denied because Mesa Fortune's Lease Agreement for the Lease Premises had been terminated under its terms and it had a valid lease with Fuel 2 Go.

The trial court conducted an evidentiary hearing on Mesa Fortune's application for a temporary injunction. Following the hearing, the trial court signed an order granting the temporary injunction. In its order, the trial court found that, "after examining the pleadings, affidavits, exhibits, and testimony," there was evidence:

a.

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