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Synergy Center, Ltd v. Lone Star Franchising, Inc.

The presentment of a letter of credit may not be enjoined unless there is evidence of fraud by the beneficiary; to justify enjoining the presentment of a letter of credit, the fraud must be extreme.

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As amended February 28, 2002

Appellant Synergy Center, Ltd. (“Synergy”) brings this interlocutory appeal from a district-court order granting a temporary injunction enjoining Synergy from (1) declaring its tenant, appellee Lone Star Franchising, Inc. (“Lone Star”), to be in default under a lease with Synergy and (2) presenting and demanding payment under a letter of credit. Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(4) (West Supp. 2001). This Court previously granted Synergy temporary, emergency relief for the limited purpose of allowing Synergy to present the letter of credit. Synergy Ctr., Ltd. v. Lone Star Franchising, Inc., No. 03-01-00259-CV (Tex. App.-Austin May 24, 2001, order) (not designated for publication). We now address the merits of the interlocutory appeal and dissolve the temporary injunction.

FACTUAL AND PROCEDURAL BACKGROUND

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