American Music Co. v. Higbee

1998 MT 150, 961 P.2d 109, 289 Mont. 278, 55 State Rptr. 586, 1998 Mont. LEXIS 132
CourtMontana Supreme Court
DecidedJune 16, 1998
Docket97-585
StatusPublished
Cited by6 cases

This text of 1998 MT 150 (American Music Co. v. Higbee) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Music Co. v. Higbee, 1998 MT 150, 961 P.2d 109, 289 Mont. 278, 55 State Rptr. 586, 1998 Mont. LEXIS 132 (Mo. 1998).

Opinions

CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

¶ 1 American Music Company and Zollie Kelman (collectively, AMC) brought this action seeking a declaratory judgment, preliminary and permanent injunctions, and specific performance of a gaming machine contract. The Eighth Judicial District Court, Cascade County, determined that injunctive relief was not proper in a breach of contract action when pecuniary compensation was contemplated and would afford adequate relief. On that basis, the court dissolved a temporary restraining order it had earlier issued. AMC appeals. We affirm.

¶2 AMC presents three issues for our review:

¶3 1. Did the District Court abuse its discretion by failing to grant a preliminary injunction prohibiting the Higbees from disconnecting and removing AMC’s machines?

¶4 2. Did the court abuse its discretion by failing to grant a preliminary injunction restraining the Higbees from purchasing their own gaming machines?

¶5 3. Did the court abuse its discretion by dissolving its preliminary injunction requiring the Higbees to deposit 40 percent of their machine receipts into a trust account pending the outcome of this litigation?

¶6 In 1990, the parties entered a written agreement concerning a casino the Higbees planned to build and operate in Great Falls, Montana. Zollie Kelman agreed to sell the Higbees a building site and to guarantee their bank loan. In return, the Higbees agreed to give Kelman’s family gaming company, AMC, an exclusive five-year right to place and maintain amusement and gambling machines in the new casino. Under the agreement, AMC would receive 40 percent of the profits from the machines and the Higbees would receive 60 percent. In 1993, the parties agreed, again in writing, to extend AMC’s exclusive agreement for an additional three years, until August 10,1998.

¶7 During the winter of 1996-97, the Higbees remodeled the casino, which was originally known as Thirsty’s but was later rechristened [281]*281the Gold Dust Casino. As part of the remodeling, the Higbees wanted to offer their patrons the most up-to-date gaming machines on the market. AMC did not have available the type of machines the Higbees desired. Therefore, after some largely unfruitful discussions with Kelman, the Higbees purchased their own machines. In April 1997, they stopped paying AMC its 40 percent share of profits and began paying AMC 20 percent. Additionally, they refused in June 1997 to cooperate with AMC to renew the licenses of its machines located in the casino, and, later that month, Maeetta Higbee told Kelman to remove eight of AMC’s machines from the premises.

¶8 When AMC filed this action in June 1997, the District Court issued a temporary restraining order prohibiting the Higbees from removing or interfering with the operation of any of AMC’s gaming or amusement machines. After a show cause hearing to determine whether a preliminary injunction was warranted, the court orally dissolved the temporary restraining order and denied the application for a preliminary injunction. The court, however, allowed time for filing of additional arguments, pending receipt of which it ordered the Higbees to deposit 40 percent of their gaming machine profits into a trust account.

¶9 In response to additional motions filed, the court issued another temporary restraining order prohibiting the Higbees from removing or interfering with the operation of any of AMC’s gaming or amusement machines on their business premises. A week later, the court held another show cause hearing. As a result of the second hearing, the court dissolved its second temporary restraining order and its order requiring deposit of a percentage of the profits from the gaming machines into a trust account. AMC appeals.

ISSUE 1

¶ 10 Did the District Court abuse its discretion by failing to grant a preliminary injunction prohibiting the Higbees from disconnecting and removing AMC’s machines?

¶11 A ruling on a motion for preliminary injunction is subject to the discretion of the district court. Billings v. County Water Dist. (1997), 281 Mont. 219, 226, 935 P.2d 246, 250. This Court reviews such rulings for abuse of that discretion.

¶12 A preliminary injunction may be granted in the following circumstances:

(1) when it appears that the applicant is entitled to the relief demanded and the relief or any part of the relief consists in restrain[282]*282ing the commission or continuance of the act complained of, either for a limited period or perpetually;
(2) when it appears that the commission or continuance of some act during the litigation would produce a great or irreparable injury to the applicant;
(3) when it appears during the litigation that the adverse party is doing or threatens or is about to do or is procuring or suffering to be done some act in violation of the applicant’s rights, respecting the subject of the action, and tending to render the judgment ineffectual;
(4) when it appears that the adverse party, during the pendency of the action, threatens or is about to remove or to dispose of the adverse party’s property with intent to defraud the applicant, an injunction order may be granted to restrain the removal or disposition;
(5) when it appears that the applicant has applied for an order under the provisions of 40-4-121 or an order of protection under Title 40, chapter 15.

Section 27-19-201, MCA. AMC argues that a preliminary injunction was proper in this case under subsections (1), (2), and (3) above.

¶13 We disagree. As to subsection (1), it does not appear AMC is entitled to the final injunctive relief demanded. A party to a contract may choose to breach the contract and to pay damages for that breach. See § 27-1-311, MCA. Final injunctive relief may only be granted if pecuniary compensation would not afford adequate relief, it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief, the restraint is necessary to prevent multiple judicial proceedings, or the obligation arises from a trust. Section 27-19-102, MCA. Here, AMC entered into agreements for the purpose of making money from gambling machines. It appears that monetary damages will provide the full relief to which AMC is entitled.

¶14 At the hearings on the preliminary injunctions, both parties admitted that the gambling machines are manufactured so that one can tell almost on a daily basis how much money is being earned and so that income from the machines can be accurately calculated “to the penny.” The parties also acknowledged that the State of Montana monitors the gamblingmachines to make sure all income is appropriately and accurately accounted for. Additionally, historical data going back to 1990 shows how much AMC has received from the gaming [283]*283machines on a quarterly and yearly basis. We conclude that it would not be difficult to ascertain the amount of compensation which would afford adequate relief.

¶15 Subsection (2) provides that a preliminary injunction may be issued when it appears that the commission or continuance of some act during the litigation would produce a great or irreparable injury to the applicant.

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Cite This Page — Counsel Stack

Bluebook (online)
1998 MT 150, 961 P.2d 109, 289 Mont. 278, 55 State Rptr. 586, 1998 Mont. LEXIS 132, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-music-co-v-higbee-mont-1998.