HOUSTON -- The Texas 14th Court of Appeals on Nov. 26 denied in part and granted in part a company’s attempt at a writ of mandamus after it was ordered to produce another businesses’ tax records amid a real estate lawsuit.
Defy International LLC filed the petition for writ of mandamus, requesting that the court oblige Judge Scot Dollinger of the Harris County District Court to vacate a July 8 order that required Defy to provide financial details such as tax returns for third party Empower Pharmacy to Defy’s landlord Richard Robbins and Richard S. Robbins Investments, Ltd., LLP (Robbins parties).
Appellate judges Ken Wise, Meagan Hassan and Kevin Jewell granted it in part and denied it in part.
The judges disagreed with the Robbins parties’ argument that Defy did not show proof of the points it brought up in the petition. “It was the Robbins parties’ burden to establish the relevance of Empower’s tax returns,” the judges ruled. The Robbins parties did not explain how the tax returns will provide the information they seek or why that information is not available from other sources.”
The Robbins parties did not fulfill their responsibility in proving their case, so, the lower court erred when it told Defy to hand over Empower’s tax returns, the appeals court ruled.
Still, Defy failed to raise its argument that it did not have the authority to produce the tax returns and that they were not relevant in its mandamus petition, the judges said. Considering this, Defy forfeited its chance to challenge the lower court’s ruling for it to provide the financial records.
Defy also did not prove that there is no proper fix to the lower court’s ruling with an appeal.
Defy sued saying it could not inhabit the lease space in question because the Robbins parties could not get a certificate of occupancy and other required documents. Defy sought $2 million in damages, including $75,000 a month for lost in profits.
The Robbins parties subsequently served Defy, requesting production of financial records from Empower. The Robbins group officially moved to compel production in June 2019, stating that Defy has yet to give details on how its business lost $75,000 a month in profits, along with the details of the Lipschultz Clinic that Defy said it was going to manage and operate in the plaza. The lower court granted the motion to compel July 11. It later overruled Defy’s challenges for the production request. Defy, in turn, filed the current petition.