Really, you can’t just freeze funds

Originally published by David Coale.

Underscoring its 2019 opinion in RWI Construction v. Comerica Bank, the Fifth Court reminded that “the ancient and controlling rule forecloses resort to injunctive relief simply to sequester a source of funds to satisfy a future judgment.” Acknowledging that the “general rule would not control where there is a logical and justifiable connection between the claims alleged and the acts sought to be enjoined, or where the plaintiff claims a specific contractual or equitable interest in the assets it seeks to freeze,” it found no such connection here: “Lake Point has not established any right to the funds in Renovation Guru’s Bank of America account.Instead, this injunction mirrors the RWI injunction on general capital call funds, which served only the improper purpose of assuring future satisfaction of a subsequent judgment.” Renovation Gurus, LLC v. Lake Point Assisted Living, LLC, No. 05-19-00499-CV (Jan. 29, 2020) (mem. op.).

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