Paul v. I.S.I. Services, Inc.

726 N.E.2d 318, 2000 Ind. App. LEXIS 206, 2000 WL 222599

• Court: Indiana Court of Appeals
• Decided: February 28, 2000
• Docket: 02A03-9904-CV-167
• Status: Published

Opinions

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

Judith Pfeiffer Paul (“Judith”) brings this interlocutory appeal from the trial court’s grant of a preliminary injunction in favor of I.S.I. Services, Inc. and Tri-State Attorney Services, d/b/a I.S.I. Security (collectively, “LS.I.Security”).

We affirm.

ISSUE

Whether the trial court abused its discretion by granting the preliminary injunction.

FACTS

Judith’s husband Donald Paul (“Donald”) owns a one-third interest in I.S.I Security. I.S.I. Security filed a complaint for damages against both Donald and Judith, alleging that Donald had misappropriated more than $190,000 from the company while serving as its treasurer and that Judith derived the benefit and use of these funds as a result of her relationship with Donald. I.S.I. Security also alleged in its complaint that a substantial portion of the misappropriated funds had been invested in a jointly-owned brokerage account and in the couple’s marital home.

Several months before the filing of I.S.I. Security’s complaint, Judith had filed a petition for dissolution of her marriage to Donald. In conjunction with the dissolution action, Judith had proposed a property settlement in which she would receive their brokerage account and one-half of the net proceeds from the sale of the marital residence. Before any action was taken on this proposal by the dissolution court, I.S.I. Security filed its complaint and sought a preliminary injunction against Donald and Judith. Specifically, I.S.I. Security asked the trial court to restrain Donald and Judith from selling, transferring, or otherwise disposing of the assets in the brokerage account or any funds received from the sale of their home. Following a hearing, the trial court granted I.S.I. Security a preliminary injunction upon its posting of a surety bond in the amount of three hundred thousand dollars ($800,000) for the payment of any damages Donald and Judith might sustain for a wrongful injunction.

DECISION

The grant or denial of a preliminary injunction lies within the sound discretion of the trial court. Jay County Rural Elec. Membership Corp. v. Wabash Valley Power Ass’n, Inc., 692 N.E.2d 905, 908 (Ind.Ct.App.1998), trans. denied. We will not interfere with the exercise of that discretion unless it is shown that the trial court’s action was arbitrary or constituted a clear abuse of discretion. Id. In reviewing the trial court’s action, we do not weigh conflicting evidence but rather consider only the evidence supporting the trial court’s findings, conclusions of law, and order. Id. at 909.

The trial court’s discretion to grant or deny a preliminary injunction is measured by several factors: (1) whether the movant’s remedies at law are inadequate, thus causing irreparable harm pending resolution of the substantive action if the injunction does not issue; (2) whether the movant has demonstrated at least a reasonable likelihood of success at trial by establishing a prima facie case; and (3) whether the threatened injury of the movant outweighs the threatened harm the grant of the injunction would occasion. Id.1 If the movant fails to prove any one of these requirements, the trial court’s grant of an injunction is an abuse of discretion. Id. Judith contends the injunction cannot lie because I.S.I. Security failed to show any of the three requirements.

We begin with whether, as concluded by the trial court, I.S.I. Security’s remedies at law were inadequate so as to subject it to irreparable harm absent an injunction. According to Judith, because its damages were monetary, I.S.I. Security had an adequate remedy at law. We cannot agree.

The object of a preliminary injunction is to maintain the status quo pending adjudication of the underlying claim. Jay County, 692 N.E.2d at 909. Because an injunction serves to prevent harm to the moving party that could not be corrected by a final judgment, the general rule is that an injunction will not be granted where the law can provide a full, adequate and complete method of redress. Id. Although “mere economic injury” generally does not warrant the grant of a preliminary injunction, the trial court has a duty to determine whether the legal remedy is as full and adequate as the equitable remedy. Id. A legal remedy is not adequate merely because it exists as an alternative to an equitable form of relief. Porter Memorial Hosp. v. Malak, 484 N.E.2d 54, 62 (Ind.Ct.App.1985). Instead, injunctive relief will be granted if it is more practicable, efficient, or adequate than that afforded by law. Id. A legal remedy is adequate only where it is as “plain, complete and adequate - or in other words, as practical and efficient to the ends of justice and its prompt administration - as the remedy in equity.” Jay County, 692 N.E.2d at 909 (quoting McKain v. Rigsby, 250 Ind. 438, 237 N.E.2d 99, 103 (1968)).

I.S.I. Security claimed that it had suffered damages in excess of $190,000. Its complaint sought treble damages, costs, and attorney fees (pursuant to Ind.Code § 34-24-3-1 AND 34-51-1-3). Evidence at the hearing strongly suggested that I.S.I. Security would be able to establish that Donald, due to his admission, had indeed embezzled substantial sums. Thus, a judgment of close to a half-million dollars against Donald and Judith is within reasonable contemplation. Evidence indicated that at the time of the hearing, I.S.I. Security had a negative value, precluding any recoupment of Donald’s interest therefrom to satisfy a judgment. Similarly, evidence of an interest by Donald in certain real estate indicated that it might have a negative value because of the presence of underground storage tanks. As to the marital assets, it was undisputed that the only assets likely to be available for execution were the joint brokerage account in the amount of $162,000 and the marital residence, the sale of which was anticipated to net $75,000.²

Therefore, the evidence before the trial court indicated that an injunction would maintain the status quo of $237,000 in marital assets being available for possible execution. If the marital property were distributed as proposed, Donald would have only about $37,500 in assets. Further, the trial court heard testimony that Donald had attempted suicide, had been hospitalized for mental problems, and had indicated an intention to move away from the area. Moreover, the trial court had before it circumstances indicating not just speculation that assets might undergo a certain disposition but the undisputed intention of Donald and Judith to change the character of specific assets. Therefore, based upon the facts before the trial court, we find no abuse of discretion in its conclusion that an injunction was more practicable, efficient, and adequate than I.S.I.’s legal remedy. See Porter Memorial Hospital.

Judith also contends that the trial court erred in its conclusion that I.S.I. Security had demonstrated a reasonable likelihood of success at trial in its claim that she was unjustly enriched by Donald’s embezzlement. Again, we must disagree.

To prevail on a claim of unjust enrichment, a plaintiff must establish that a measurable benefit has been conferred on the defendant under such circumstances that the defendant’s retention of the benefit without payment would be unjust. Bayh v. Sonnenburg, 573 N.E.2d 398, 408 (Ind.1991), cert. denied 502 U.S. 1094, 112 S.Ct. 1170, 117 L.Ed.2d 415 (1992). Judith testified that she had started the brokerage account, and that she had added nothing to it since 1995. She further testified that Donald had not done so either. However, the evidence submitted about that account reflects the deposit of approximately $60,000 therein during the period of the embezzlement. Further, the trial court heard that embezzled funds were used to make house and car payments, and to pay for vacations by Donald and Judith, their theater tickets, and various household repairs. Such evidence supports the inference that Judith was unjustly enriched by Donald’s embezzlement.

Finally, Judith claims that I.S.I. Security failed to demonstrate that its threatened injury outweighed the harm that the grant of the injunction would cause Judith. The trial court ordered I.S.I. Security to post a $300,000 bond, which it did. The trial court specifically found that I.S.I. Security would be harmed by an inability to collect a judgment in the absence of an injunction. Judith directs us to her testimony that if she did not receive her share of the proceeds from the sale of the marital residence, she would be unable to buy a new home. However, the amount of the bond appears more than reasonable to protect Judith from any economic loss that she might sustain if she is found to have been wrongly enjoined. We do not find that the trial court abused its discretion when it balanced the threatened harm to I.S.I. Security against the harm Judith anticipated of being unable to buy a house until resolution of I.S.I.’s complaint and concluded that the threatened harm to I.S.I. Security outweighed the threatened harm to Judith.

We affirm.³

NAJAM, J., concurs. STATON, J., dissents with separate opinion.

1 . A fourth factor is whether the public interest will be disserved. Id. Application of this factor was not argued to the trial court; nor is it an issue discussed by Judith on appeal.

2 . Absent the injunction, the property settlement would give the entire brokerage account to Judith, and Judith and Donald would each receive $37,500 from the sale of the residence.

3 . In her "Statement of the Issues,” Judith specifies her three challenges to the factors that are weighed relative to the issuance of a preliminary injunction. See Appellant’s Brief at 1. Her "Summary of Argument” also discusses only the application of those three factors. See Id. at 10-11. However, in her actual argument, after she has argued the three factors, she adds an issue: whether I.S.I. Security committed abuse of process by seeking a preliminary injunction "for the ulterior purpose of hindering the Pauls’ divorce” rather than pursuing the statutory prejudgment attachment and garnishment procedure. Id. at 18. Even if this purported issue and argument were not virtually hidden in Judith’s brief, we would consider it waived because it was not made to the trial court. See Franklin Bank and Trust Co. v. Mithoefer, 563 N.E.2d 551 (Ind.1990).