Tokyo Japanese Steakhouse, Inc. v. Sohn

114 So. 3d 543, 2013 WL 2019853, 2013 La. App. LEXIS 916
CourtLouisiana Court of Appeal
DecidedMay 15, 2013
DocketNo. 47,897-CA
StatusPublished
Cited by1 cases

This text of 114 So. 3d 543 (Tokyo Japanese Steakhouse, Inc. v. Sohn) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tokyo Japanese Steakhouse, Inc. v. Sohn, 114 So. 3d 543, 2013 WL 2019853, 2013 La. App. LEXIS 916 (La. Ct. App. 2013).

Opinion

BROWN, Chief Judge.

[! Plaintiffs, Tokyo Japanese Steakhouse, Inc., and Tokyo Japanese Restaurant Building, LLC, appeal the denial of then-request for a preliminary injunction prohibiting defendants, Man T. Sohn and Sushiko, Inc., from operating a competing restaurant. We affirm.

Facts and Procedural Background

Tokyo Japanese Steakhouse, Inc., and Tokyo Japanese Restaurant Building, LLC, were formed in May 2008 by Tony Wang and Man T. Sohn. Wang and Sohn each own a 50 percent share in both ventures. Tokyo Building, LLC, owns the property on which the Tokyo Steakhouse operates in Shreveport, Louisiana. Initially, Wang served as president and Sohn as secretary/treasurer of the two businesses, with Sohn serving as the day-to-day manager of the Steakhouse. In April 2006, a spirited disagreement arose between the two owners, and Wang assumed management of the restaurant. Apparently, it was anticipated that one party would purchase the other’s interest; however, this never occurred.

In February 2007, Sohn opened Sushiko at the Louisiana Boardwalk in Bossier City, Louisiana. Both Tokyo Steakhouse and Sushiko sell sushi. This led to two lawsuits presided over by two different judges.

On October 6, 2010, plaintiffs, Tokyo Steakhouse, Tokyo Building, LLC, and Tony Wang, instituted the present action against defendants, Man T. Sohn and Sushiko, Inc., alleging that Sohn and through him, Sushiko, Inc., acted in concert to cause a note on the building owned by Tokyo Building, LLC, to fall into default and, thereby, eliminated Tokyo Steakhouse as a “competitor” and/or to force Wang to purchase Sohn’s 12interest in the two Tokyo companies “at a price higher than [their] fair market value.” The original petition alleged that the actions of Sohn amounted to “willful, intentional breaches of fiduciary duty” to plaintiffs and constituted “unfair competition, pursuant to La. R.S. 51:1401, et seq.”

On October 26, 2010, defendants filed peremptory exceptions of no cause of action and no right of action. The exceptions as to Tokyo Steakhouse and Tokyo Building, LLC, were denied. The exception of no right of action against Wang was granted and his claims were dismissed.

On December 2, 2011, plaintiffs filed a motion for preliminary injunction requesting an injunction (1) enjoining, restraining and commanding Sohn and Sushiko to cease and desist all operations in the sale of sushi and sushi-related products and from doing business in direct competition with Tokyo Steakhouse; or (2) mandating Sohn to allow Wang or Tokyo Steakhouse to purchase Sushiko at Sohn’s start-up cost. In answer, defendants filed exceptions of unauthorized use of summary proceedings, res judicata, and prescription.

[545]*545On March 26, 2012, Judge Leon Emanuel denied plaintiffs motion for a preliminary injunction and pretermitted ruling on the exceptions filed by defendants. Plaintiffs appealed. The only issue on appeal is the denial of the petition for a preliminary injunction.

Discussion

An injunction shall be issued in cases where irreparable injury, loss, or damage may otherwise result to the applicant, or in other cases specifically provided by law. La. C.C.P. art. 3601. “Irreparable injury,” for ^purposes of preliminary injunction, is an injury or loss which cannot be compensated in money damages or be measured by pecuniary standards. Cason v. Chesapeake Operating, Inc., 47,084 (La.App.2d Cir.04/11/12), 92 So.3d 436, writ denied, 12-1290 (La.09/28/12), 98 So.3d 840.

A preliminary injunction is an interlocutory procedural device designed to preserve the existing status quo pending a full trial on the merits. South Cent. Bell Telephone Co. v. Louisiana Public Service Com’n, 555 So.2d 1370 (La.1990); Louisiana Gaming Corp. v. Rob’s Mini-Mart, Inc., 27,920 (La.App.2d Cir.01/24/96), 666 So.2d 1268. However, a mandatory injunction, one which requires someone to do an act, differs greatly from an injunction which merely seeks to protect the status quo. When the status quo is a condition “not of rest, but of action, and the condition of rest is exactly what will inflict the irreparable injury upon the complainant,” a mandatory injunction is appropriate. Cason, supra.

In City of New Orleans v. Board of Directors of Louisiana State Museum, 98-1170 (La.03/02/99), 739 So.2d 748, the issue was whether the Vieux Carr Commission a claim for a mandatory injunction to remove the Cabildo’s fence under the applicable law. The court, at 739 So.2d at 756, stated:

A mandatory injunction commands a party to take specific action. A mandatory injunction may not be issued on a merely prima facie showing that the party seeking the injunction can prove the necessary elements; instead, the party must show by a preponderance of the evidence at an evidentiary hearing that he is entitled to the preliminary injunction.

1 /The first lawsuit Docket No. 514,975

As part of the hearing on the motion for preliminary injunction, which is the subject of this appeal, the trial court accepted the record of a prior lawsuit between the parties, Man T. Sohn v. Tony Wang (Docket No. 514,975, Judge Scott Crichton presiding), as an exhibit. A full evidentiary hearing was held in this suit. That suit, filed on September 7, 2007, was initiated by Sohn in an effort to compel Wang to continue to pay him $5,000 per month pursuant to an agreement between the parties. Wang filed a reconventional demand alleging a “Breach of Fiduciary Duty/Usurpation of Opportunity” against Sohn. The matter was heard by Judge Crichton on July 1, 2009.

In that action, Wang argued that he was “entitled to a permanent injunction enjoining Sohn from owning or operating Sushi-ko as a sushi restaurant in competition with Tokyo Steakhouse for so long as Sohn is an officer or director of the company.” Judge Crichton held:

Given the previous factual and legal conclusions, the Court believes it would be unfair to grant Wang’s request that Tokyo be granted a permanent injunction enjoining Sohn from owning or operating Sushiko as a sushi restaurant because (1) it is not properly pled, in the reconventional demand, but rather is ar[546]*546gued in post trial brief; and (2) even if properly pled, it is not justified based on the facts or applicable law. Accordingly, Wang’s injunctive request is denied.

As to the other matters, Judge Crichton denied all but one claim by Sohn against Wang for the amount of $5,000. Judge Crichton found that Sohn “violated his obligations of good faith and his fiduciary obligation owed to the corporate entity, Tokyo, and the other shareholder, Wang ...” To redress this violation, the court awarded Wang, individually and derivatively on behalf of Tokyo Steakhouse, damages of $36,032. Judge |fiCrichton further stated that the remaining “practical and very serious issues of valuation, sale and /or dissolution can be resolved by agreement.” No appeal was taken from that judgment.

Preliminary injunction

At the outset we will address plaintiffs’ argument that Judge Emanuel abused his discretion by declining to rule on their request for injunctive relief on the basis that the parties should attempt to resolve their differences extrajudicially. This contention is erroneous. The trial court expressly denied plaintiffs’ request for in-junctive relief. Thus, we are left to determine whether that denial was proper.

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114 So. 3d 543, 2013 WL 2019853, 2013 La. App. LEXIS 916, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tokyo-japanese-steakhouse-inc-v-sohn-lactapp-2013.