Bryan Rutledge and BLC Outdoor Services v. Travis Forrest (mem. dec.) ( 2018 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Dec 18 2018, 9:02 am
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANTS ATTORNEY FOR APPELLEE
Christopher T. Smith Robert W. Summerfield
Smith Davis LLC GDS Law Group, LLP
Greenfield, Indiana Anderson, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Bryan Rutledge and BLC December 18, 2018
Outdoor Services, Court of Appeals Case No.
Appellants-Defendants, 18A-PL-1573
Appeal from the Madison Circuit
v. Court
The Honorable David A. Happe,
Travis Forrest, Judge
Appellee-Plaintiff Trial Court Cause No.
48C04-1802-PL-32
Crone, Judge.
Case Summary
[1] Bryan Rutledge and BLC Outdoor Services appeal the order granting Travis
Forrest’s motion for a preliminary injunction and finding Rutledge in contempt
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of a temporary restraining order (“the TRO”). Rutledge argues that the trial
court erred in issuing a preliminary injunction because the trial court’s finding
that Forrest’s remedies at law are inadequate is clearly erroneous. We agree
and therefore reverse the preliminary injunction. Rutledge also argues that the
trial court abused its discretion in finding that he was in contempt of the TRO
because the TRO was insufficiently clear and certain. Concluding that it was
sufficiently clear and certain, we find no abuse of discretion and accordingly
affirm the contempt finding. We remand for further proceedings.
Facts and Procedural History
[2] Rutledge owns a mowing and landscaping company registered as Rutledge
Enterprises, which does business as BLC Outdoor Services. Forrest also owns a
mowing and landscaping company known as All Seasons Lawn Care. In late
January or early February of 2018, Rutledge and Forrest began negotiations for
Rutledge to purchase Forrest’s landscaping business. The potential agreement
included Rutledge’s purchase of over $100,000 of Forrest’s equipment and
Rutledge hiring Forrest in a salaried position. Toward this end, the parties
created and initialed two sheets of paper, titled “Equipment Prices,” which list
multiple pieces of equipment and their prices, a “Business Price” of $20,000,
and a yearly salary amount. Ex. D. However, some prices are lined out, and
there are some handwritten notations regarding dates Forrest had already
worked for Rutledge and personal days Forrest had earned. Id. Apparently, the
parties may have also discussed Rutledge’s purchase of Forrest’s client list and
for Rutledge to pay the loans for a 2017 F350 Ford pickup truck and an Isuzu
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landscape truck, but the Equipment Prices does not reflect these discussions.
Rutledge gave Forrest a “good faith deposit of $10,000.” Appellants’ App. Vol.
2 at 8. Rutledge took possession of Forrest’s equipment but did not pay Forrest
any more money. Although Rutledge gave Forrest two additional checks for
$10,000 each, Rutledge put a stop hold on those checks, and Forrest was unable
to cash them. Tr. Vol. 3 at 64. When the deal fell through, Forrest
unsuccessfully sought the return of the equipment he had transferred to
Rutledge and offered to reimburse Rutledge for the $10,000 good faith deposit.
Id. at 65.
[3] On February 23, 2018, Forrest filed a complaint against Rutledge, alleging civil
conversion, pain and suffering, tortious interference with a business
relationship, and intentional infliction of emotional distress. In his complaint,
Forrest alleged that Rutledge had “invoiced [Forrest’s] clients under his own
business name, and ha[d] harassed several of them, in person, in an attempt to
steal [Forrest’s] clients.” Appellants’ App. Vol. 2 at 12. Forrest also filed a
motion for a TRO, asking the trial court to order Rutledge not to use, sell, or in
any way encumber any equipment owned by Forrest and not to have any
further contact with any of Forrest’s clients. On March 2, 2018, without
holding a hearing, the trial court issued the TRO, which restrained Rutledge
“from using, encumbering, concealing, selling or otherwise disposing of any
equipment, property or other items received from [Forrest]” and “from
contacting any clients of [Forrest] or his business in any capacity,” and ordering
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Rutledge to “immediately release the property of [Forrest] into his care.” Id. at
7.
[4] On March 5, 2018, Deputy Gary Stanley of the Hancock County Sheriff’s
Office, other law enforcement personnel, and Forrest served the TRO on
Rutledge. Rutledge turned over some property but refused to disclose the
location of certain other property. Apparently, Rutledge returned Forrest’s
2017 Ford F350 pickup truck, an Isuzu landscape truck, a 2017 PJ equipment
trailer, a Boss snowplow, and two pallets of salt.1 Law enforcement read the
TRO to Rutledge multiple times and informed him that he could be held in
contempt and put in jail for failure to comply, and Rutledge indicated that he
understood but continued to refuse to disclose the location of all the equipment
Forrest had transferred to him.
[5] On March 7, 2018, Deputy Stanley filed notice that the TRO had not been
satisfied. At some point, Forrest purchased equipment to replace the
equipment that Rutledge refused to return, so that Forrest could avoid losing
customers and continue operating his business. Id. at 9. On April 12, 2018,
Forrest filed a motion for rule to show cause why Rutledge should not be found
in contempt for refusing to comply with the TRO.
1
It is not entirely clear that Rutledge returned all this equipment to Forrest on this particular date, but
apparently he had returned this equipment to Forrest by the time of the hearing on the preliminary
injunction.
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[6] On April 13, 2018, the trial court held a hearing on Forrest’s motion for rule to
show cause and motion for a preliminary injunction. Forrest, Rutledge, and
Deputy Stanley testified. On June 4, 2018, the trial court issued an order
granting a preliminary injunction, finding Rutledge in contempt of the TRO,
and awarding Forrest attorney’s fees. This appeal ensued.
Discussion and Decision
Section 1 – The trial court’s decision to grant the preliminary
injunction is clearly erroneous.
[7] Rutledge contends that the trial court erred in granting the preliminary
injunction. When determining whether to grant or deny a preliminary
injunction, the trial court is required to issue special findings of fact and
conclusions thereon. Thornton-Tomasetti Eng’rs v. Indianapolis-Marion Cty. Pub.
Library, 851 N.E.2d 1269, 1277 (Ind. Ct. App. 2006); Ind. Trial Rule 52(A).
We review the special findings and conclusions for clear error. Ind. Trial Rule
52(A). “Findings are clearly erroneous if they are insufficient to disclose a valid
basis for the legal result reached in the judgment.” Fumo v. Med. Group of Mich.
City, Inc., 590 N.E.2d 1103, 1108 (Ind. Ct. App. 1992), trans. denied. “Findings
are also clearly erroneous when the record lacks evidence or reasonable
inferences from the evidence to support them. And a judgment is clearly
erroneous if it is unsupported by the findings and the conclusions that rely on
those findings.” Bowling v. Nicholson, 51 N.E.3d 439, 443 (Ind. Ct. App. 2016)
(citations omitted), trans. denied. In assessing whether the judgement is clearly
erroneous, we will not reweigh the evidence or judge witness credibility but will
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consider only the evidence favorable to the judgment and the reasonable
inferences to be drawn therefrom. Clark’s Sales & Serv., Inc. v. Smith, 4 N.E.3d
772, 780 (Ind. Ct. App. 2014), trans. denied.
[8] Preliminary injunctions are designed to protect the property and rights of
parties from any injury until the issues and equities in a case can be determined
after a full examination and hearing. Barlow v. Sipes, 744 N.E.2d 1, 6-7 (Ind. Ct.
App. 2001) (citing 42 AM. JUR. 2D, Injunctions § 13 (1969)), trans. denied. The
power to issue a preliminary injunction should be used sparingly, with such
relief granted only in rare instances in which the law and facts are clearly within
the movant’s favor. Clark’s, 4 N.E.3d at 780. To obtain a preliminary
injunction, the moving party has the burden of showing by a preponderance of
the evidence that
(1) the movant’s remedies at law are inadequate, thus causing
irreparable harm pending resolution of the substantive action; (2)
the movant has at least a reasonable likelihood of success at trial
by establishing a prima facie case; (3) threatened injury to the
movant outweighs the potential harm to the nonmoving party
resulting from the granting of an injunction; and (4) the public
interest would not be disserved.
Apple Glen Crossing, LLC v. Trademark Retail, Inc., 784 N.E.2d 484, 487 (Ind.
2003). “Failure to prove any one of these requires denying the injunction.”
Leone v. Comm’r, Ind. Bureau of Motor Vehicles, 933 N.E.2d 1244, 1248 (Ind.
2010).
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[9] Rutledge argues that the trial court’s finding that Forrest’s remedies at law are
inadequate is clearly erroneous.2 We observe that “[i]f an adequate remedy at
law exists, injunctive relief should not be granted. A party suffering mere
economic injury is not entitled to injunctive relief because damages are
sufficient to make the party whole.” Ind. Family & Soc. Servs. Admin. v. Walgreen
Co., 769 N.E.2d 158, 162 (Ind. 2002). However,
[a]lthough 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. A legal remedy is not adequate merely
because it exists as an alternative to an equitable from of relief.
Instead, injunctive relief will be granted if it is more practicable,
efficient, or adequate than that afforded by law. 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.
Barlow, 744 N.E.2d at 6-7 (citations and quotation marks omitted).
[10] As to Forrest’s remedies at law, the trial court found as follows:
2
Rutledge also argues that the trial court’s judgment is clearly erroneous because it did not include a finding
that “irreparable harm” would occur to Forrest if the preliminary injunction were not granted. Appellants’
Br. at 14. As mentioned, to obtain a preliminary injunction, the moving party must show that the movant’s
“remedies at law are inadequate, thus causing irreparable harm pending resolution of the substantive action.”
Apple Glen Crossing, 784 N.E.2d at 487. We observe that “irreparable harm” is harm that “cannot be
compensated for through damages upon resolution of the underlying action.” Coates v. Heat Wagons, Inc., 942
N.E.2d 905, 912 (Ind. Ct. App. 2011). This is essentially another way of articulating when the movant’s
remedies at law are inadequate. Here, the trial court found that Forrest’s remedies at law are inadequate, and
we decline to hold that the trial court was required to make an additional finding specifically referring to
irreparable harm.
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The remedies at law are inadequate. For [Forrest] to have to
carry the financial burden of purchasing all new equipment and
not being able to mitigate that expenditure by either selling his
old equipment or putting it into productive use would place his
business at a competitive disadvantage compared to other
competing landscaping contractors, including [Rutledge].
Appellants’ App. Vol. 2 at 9. Rutledge contends that Forrest is able to continue
operating his business because Forrest purchased new equipment to replace the
equipment that had not been returned to him. Rutledge further argues that the
trial court’s finding is essentially an economic argument that Forrest would
carry a financial burden from purchasing the new equipment, and there is no
evidence that the financial burden would place Forrest’s business at a
competitive disadvantage.
[11] As the moving party, Forrest bore the burden of establishing that his remedies
at law are inadequate, such that he would suffer irreparable harm. In his
appellee’s brief, Forrest fails to direct us to any evidence that he is currently
unable to provide services to his clients or operate his business or is
experiencing any difficulties in doing so due to the cost of purchasing new
equipment. He points to no evidence that supports the trial court’s finding that
operating his business without the equipment in Rutledge’s possession puts him
at a competitive disadvantage.3 The financial burden of operating his business
without the equipment in Rutledge’s possession is an economic injury. We
3
The testimony Forrest relates in his appellee’s brief is irrelevant and unsupported by citation to the record.
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conclude that the trial court’s finding that Forrest’s remedies at law are
inadequate is unsupported by sufficient evidence. Accordingly, the grant of the
preliminary injunction is clearly erroneous, and we must reverse and remand
for further proceedings.
[12] Rather than seeking an equitable remedy, Forrest could have pursued
prejudgment possession of his property through statutory means. Indiana Code
Chapter 32-35-2 governs actions for replevin and provides a proper legal
mechanism for seeking an order for prejudgment possession of property.
Section 2 – The trial court did not abuse its discretion in
finding Rutledge in contempt of the TRO.
[13] Rutledge asserts that the trial court erred in finding him in contempt of the TRO
because it was insufficiently clear and certain.4 “The determination of whether
a party is in contempt of court is a matter left to the discretion of the trial
court.” City of Gary v. Major, 822 N.E.2d 165, 171 (Ind. 2005). “We will
4
Rutledge also argues that the trial court erred in issuing the TRO because the TRO violated Indiana Trial
Rule 65(B) and because he did not receive proper notice. However, Rutledge did not object, demand a
hearing, or seek to dissolve the TRO as permitted by Indiana Trial Rule 65(B). Therefore, Rutledge has
waived any objection he may have had to the TRO process. See Vickery v. Ardagh Glass Inc., 85 N.E.3d 852,
857 (Ind. Ct. App. 2017) (concluding that Vickery waived any objection he may have had to the TRO
process, including the lack of legally sufficient notice, by failing to object, demand a hearing, or seek to
dissolve the TRO), trans. denied (2018). Nevertheless,
we caution attorneys and trial courts around the state to be mindful of the notice requirements
surrounding TROs. There are circumstances in which a TRO must truly be granted immediately
without affording time to the adverse party to respond, but those circumstances must strictly
meet the requirements set forth by Trial Rule 65(B). In all other cases, both the applicant party
and the trial court are required by due process and the trial rules to ensure that the adverse party
was given legally sufficient notice before final action is taken.
Id. at 859.
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reverse a trial court’s finding of contempt only if there is no evidence or
inference therefrom to support the finding.” Id.
In order to be held in contempt for failing to comply with a court
order, a party must have willfully disobeyed the order. The order
must have been so clear and certain that there could be no
question as to what the party must do, or not do, and so there
could be no question regarding whether the order is violated. A
party may not be held in contempt for failing to comply with an
ambiguous or indefinite order in good faith.
Bandini v. Bandini, 935 N.E.2d 253, 264-65 (Ind. Ct. App. 2010) (citations and
quotation marks omitted).
[14] Rutledge argues that the TRO was subject to more than one interpretation, and
therefore it was ambiguous.5 According to Rutledge, one part of the TRO
ordered him to restrain from “using, encumbering, concealing, selling or
otherwise disposing of … property … received from [Forrest]” and another part
ordered him to “immediately release the property of [Forrest] into his care.”
Appellants’ App. Vol. 2 at 7 (emphases added). He contends that property
received from Forrest and the property of Forrest are not synonymous, and that the
TRO could be understood to mean that he was not required to release the
5
We note that Rutledge is not arguing that he cannot be held in contempt for failing to comply with an
erroneous order. Indeed, our case law firmly establishes that “a defendant may not challenge a contempt
finding based upon the prior order’s non-jurisdictional irregularities. A party must follow an erroneous
order. The only remedy from an erroneous order is appeal and disobedience thereto is contempt.” City of
Gary, 822 N.E.2d at 169-70 (quoting Carson v. Ross, 509 N.E.2d. 239, 243 (Ind. Ct. App. 1987), trans. denied
(1988)).
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property that he believed he had validly purchased pursuant to a business
agreement. We are unpersuaded.
[15] The record shows that Deputy Stanley testified that Rutledge was specifically
informed what property to release, and Rutledge “advised that he was not going
to disclose the location of certain property and would not turn it over.” Tr. Vol.
3 at 27. Deputy Stanley also testified that Rutledge was informed that he was
not complying with the TRO and that his unwillingness to comply would likely
constitute some type of contempt, and Rutledge still refused to provide the
location of the other property. Id. at 27-28. At the very least, by refusing to
reveal the location of the property, Rutledge was “concealing … property …
received from [Forrest].” Appellants’ App. Vol. 2 at 7. We cannot say that the
trial court abused its discretion in finding Rutledge in contempt of the TRO.
Accordingly, we affirm the contempt finding.
[16] Affirmed in part, reversed in part, and remanded.
Vaidik, C.J., and Mathias, J., concur.
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