Gould Ranch v. Irish Black Cattle ( 2018 )

04/03/2018
DA 17-0534
Case Number: DA 17-0534
IN THE SUPREME COURT OF THE STATE OF MONTANA
2018 MT 80N
GOULD RANCH CATTLE COMPANY,
a Colorado corporation,
Plaintiff and Appellee,
v.
IRISH BLACK CATTLE ASSOCIATION,
a Montana non-profit corporation,
Defendant and Appellant.
APPEAL FROM: District Court of the Fourth Judicial District,
In and For the County of Missoula, Cause No. DV-17-684
Honorable John W. Larson, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Richard A. Reep, F. Peter Landsiedel, Reep, Bell, Laird & Jasper, P.C.,
Missoula, Montana
For Appellee:
Jeffrey M. Roth, Jeffrey R. Kuchel, Crowley Fleck PLLP, Missoula,
Montana
Submitted on Briefs: February 28, 2018
Decided: April 3, 2018
Filed:
__________________________________________
Clerk
Justice Laurie McKinnon delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana
Reports.
¶2 Irish Black Cattle Association (Association) appeals from an order of the Fourth
Judicial District Court, Missoula County, granting Gould Ranch Cattle Company (Gould
Ranch) a permanent injunction. We reverse and remand.
¶3 Gould Ranch is a Colorado corporation that began breeding Irish Black and Irish
Red cattle in 1986. Guy and Sherry Gould own Gould Ranch and worked in conjunction
with the founder of the breeds, Maurice Boney, to establish a breeding program that
protects the purity of the Irish Black and Irish Red breeds. The breeds are highly valued
and the terms “Irish Black” and “Irish Red” are registered trademarks with the United
States Patent and Trademark Office.
¶4 Following the incapacitation and death of Maurice Boney, a dispute concerning the
ownership of the trademarks and licensing rights arose and resulted in commencement of
a lawsuit in Colorado. In 2015, pursuant to a settlement reached prior to trial in the
Colorado litigation, an entity owned by Guy and Lisa Hendrickson became the owner of
the trademark; this entity, in turn, licenses use of the trademark to the Association.
Although Gould Ranch was not a party to the Colorado litigation, the Association owed it
certain performance obligations related to its rights within the Association. The current
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litigation has its genesis in each party’s respective interpretation of the performance
obligation arising from the settlement of the Colorado litigation.
¶5 Gould Ranch must sell its bulls when they are two years old in order to maximize
its profit on livestock. At the 2016 spring sale, Gould Ranch was unable to provide its
buyers with the necessary documentation certifying its bulls were “Irish Black” or “Irish
Red” because the Association had not issued Gould Ranch the necessary documentation.
As a result, Gould Ranch provided its customers with forms from the defunct American
Celtic Cattle Association (ACCA) as a means to reassure its buyers of the bulls’ breeding
and ancestry. Gould Ranch informed the buyers that the ACCA no longer existed, but that
the information in the certificates was accurate regarding the bulls’ pedigree. The
Association learned that Gould Ranch used ACCA certificates and determined that Gould
Ranch had committed continuous and incurable violations of the Association’s rules.
¶6 As a result of the Association’s failure to issue appropriate and timely pedigree
documentation, Gould Ranch believed it would lose both the ability to sell purebred cattle
and its nationwide reputation as a breeder of Irish Blacks and Irish Reds. Gould Ranch
sought to prevent the Association from adversely affecting its membership in the
organization. Accordingly, Gould Ranch filed suit and asserted claims under the Montana
Uniform Declaratory Judgments Act, §§ 27-8-101 to -313, MCA; a request for preliminary
and permanent injunctive relief; and a violation of § 35-2-520, MCA, on the basis that the
Association’s decisions were allegedly contrary to its bylaws. Gould Ranch filed an
amended application for a preliminary injunction on August 14, 2017, and the District
Court conducted a hearing on August 22, 2017. The District Court issued its decision from
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the bench granting a “permanent” injunction enjoining the Association from taking any
action that adversely affected Gould Ranch’s membership and advised the parties to “work
on a briefing schedule.” The Association appealed issuance of the permanent injunction
pursuant to M. R. App. P. 6(3)(e).
¶7 Both parties agree that the District Court erred in issuing a permanent injunction
prior to considering the case on its merits. The parties also agree that the District Court
should have issued written findings and conclusions setting forth its reasons for granting
injunctive relief. The parties dispute, however, whether the matter should be remanded for
consideration of whether a preliminary injunction should be issued. The Association
maintains that this Court should conclude even preliminary injunctive relief is not
appropriate because the Association has not terminated Gould Ranch from its membership
and, therefore, Gould Ranch’s request for injunctive relief is not ripe. Gould Ranch
maintains that this Court should not, in the first instance, determine the merits of the
preliminary injunction; rather the issue should be remanded for the District Court to make
a sufficient record of its findings and conclusions.
¶8 This Court reviews a District Court’s issuance of an injunction to determine whether
there has been a manifest abuse of discretion. Sandrock v. DeTienne, 2010 MT 237, ¶ 13,
358 Mont. 175, 243 P.3d 1123. “A ‘manifest’ abuse of discretion is one that is obvious,
evident or unmistakable.” Shammel v. Canyon Res. Corp., 2003 MT 372, ¶ 12, 319 Mont.
132, 82 P.3d 912 (citation omitted). A district court’s conclusions of law are reviewed to
determine whether they are correct. Sandrock, ¶ 13. We agree with the parties that the
District Court abused its discretion when it issued a permanent injunction enjoining the
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Association from taking action adverse to Gould Ranch’s membership interests. “The
limited function of a preliminary injunction is to preserve the status quo and to minimize
the harm to all parties pending full trial.” Yockey v. Kearns Props., LLC, 2005 MT 27,
¶ 18, 326 Mont. 28, 106 P.3d 1185. A permanent injunction is not a limited remedy or a
remedy intended to maintain the status quo. A permanent injunction “issues as a judgment
which finally settles the rights of the parties after final determination of all the issues
raised.” State ex rel. Thompson v. Dist. Court, Fourth Judicial Dist., 132 Mont. 53, 60,
313 P.2d 1034, 1038 (1957). Accordingly, the District Court’s issuance of a permanent
injunction before trial on the merits was a manifest abuse of discretion.
¶9 We conclude that this matter should be remanded for the District Court to make
findings of fact and conclusions of law in accordance with M. R. Civ. P. 52(a) regarding
issuance of a preliminary injunction. Absent sufficient findings of fact and conclusions of
law that address Gould Ranch’s application for a preliminary injunction, this Court is
unable to conduct adequate appellate review. See Snavely v. St. John ex rel. Snavely, 2006
MT 175, ¶ 19, 333 Mont. 16, 140 P.3d 492. Furthermore, absent findings of fact and
conclusions of law on the issue of ripeness and the Association’s claim that injunctive relief
is inappropriate, we are likewise unable to conduct appellate review. Accordingly, we
reverse and remand these proceedings to the District Court for consideration of Gould
Ranch’s request for a preliminary injunction and the appropriateness of injunctive relief,
and for the District Court to make sufficient findings of fact and conclusions of law.
¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our
Internal Operating Rules, which provides for memorandum opinions. This appeal presents
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no constitutional issues, no issues of first impression, and does not establish new precedent
or modify existing precedent.
¶11 Reversed and remanded.
/S/ LAURIE McKINNON
We concur:
/S/ MIKE McGRATH
/S/ JAMES JEREMIAH SHEA
/S/ INGRID GUSTAFSON
/S/ DIRK M. SANDEFUR
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