Barlow v. Sipes

Decision Date31 January 2001
Docket NumberNo. 47A01-0006-CV-212.,47A01-0006-CV-212.
Citation744 N.E.2d 1
PartiesBill BARLOW and Rachel Barlow, Appellants-Defendants, v. Dexter SIPES, formerly d/b/a Sipes Body Shop and Sipes Body and Glass, Inc., as successor, Appellees-Plaintiffs.
CourtIndiana Appellate Court

Jennifer A. Tucker, Tucker and Tucker, P.C., Paoli, IN, Attorney for Appellant.

Geoffrey M. Grodner, Kendra G. Gjerdingen, Mallor Clendening Grodner & Bohrer LLP, Bloomington, IN, Attorneys for Appellee.

OPINION

ROBB, Judge.

Bill Barlow and his wife Rachel Barlow (the "Barlows") appeal the trial court's grant of a preliminary injunction in favor of Dexter Sipes, Dan Sipes, and Sipes Body and Glass, Inc. (collectively referred to as "Sipes Body"). We affirm and remand.

Issue

The Barlows raise the following restated issues for our review:

1. Whether the trial court abused its discretion in granting the preliminary injunction in favor of Sipes Body because an adequate legal remedy, that is a suit for money damages, was available;
2. Whether the trial court abused its discretion in granting the preliminary injunction in favor of Sipes Body because it constitutes a prior restraint of speech in violation of the First Amendment to the United States Constitution; and
3. Whether the trial court abused its discretion in granting the preliminary injunction in favor of Sipes Body without requiring Sipes Body to post a security bond pursuant to Indiana Trial Rule 65(C).
Facts and Procedural History

The facts reveal that Bill Barlow owns and operates an insurance agency, known as Barlow Insurance Service, in Mitchell, Indiana. Bill Barlow works in the capacity of an insurance adjuster and general insurance agent with his wife Rachel Barlow assisting him. For the past twenty-eight years, Dexter Sipes has operated an automobile body shop known as Sipes Body and Glass in the neighboring town of Bedford, Indiana. On June 3, 1999, Dexter Sipes sold the business to his son Dan Sipes.

On October 27, 1999, Sipes Body filed a complaint against the Barlows alleging intentional interference with a business relationship and defamation. Sipes Body sought relief in the form of compensatory damages, punitive damages, and injunctive relief. With regard to injunctive relief, Sipes Body requested a preliminary injunction to prevent further harm pending resolution of the tort suits. After conducting a hearing, the trial court entered an order on June 8, 2000, which found that:

6. There is no evidence that [Sipes Body] "busts out windshields" for the purpose of generating glass replacement work and that [Sipes Body] has a good reputation in the Lawrence County community.
* * *
10. The Barlows have engaged in a pattern of discouraging their policyholders from having repair work done by [Sipes Body] by making derogatory statements about [Sipes Body] and of steering their policyholders to a Mitchell body shop by misrepresenting that the insurers require an estimate from a Mitchell body shop.
11. [Sipes Body] has no way of knowing how many other Barlow policyholders have been dissuaded by the Barlows from patronizing [Sipes Body].
12. Daniel Sipes believes that the statements made by the Barlows have in the past and continue to negatively affect [Sipes Body's] business.
13. It is important to [Sipes Body's] business to have a steady stream of customers because the business depends on volume of work.
* * *
16. The Barlows deny making statements about [Sipes Body] and discouraging their policyholders from patronizing [Sipes Body], yet Rachel Barlow was unable to provide evidence as to why any of the five witnesses who testified that the Barlows made negative and untrue statements about [Sipes Body] would lie about the Statements made by the Barlows.
17. [Sipes Body's] damages are not ascertainable because there is no way to determine how many customers have been dissuaded from patronizing [Sipes Body].

R. 78-79. The trial court in the June 8, 2000, order concluded in part that:

4. The remedies available at law to [Sipes Body] are inadequate causing irreparable harm to [Sipes Body] if [the Barlows] are not enjoined pending the resolution of this action because the amount of damages suffered by [Sipes Body] cannot be ascertained.
5. [Sipes Body] has established a prima facie case against [the Barlows] making it reasonably likely that it will succeed at trial.
6. The threatened injury to [Sipes Body] outweighs the potential harm that a temporary restraining order would occasion on [the Barlows] because [the Barlows] can fully conduct their business without engaging in any of the activities prohibited by the order.
7. Public interest will not be disserved by the issuance of a temporary restraining order.

Id. With regard to the preliminary injunction, the June 8, 2000, order provides in part that:

Defendants, Bill Barlow and Rachel Barlow, shall refrain from making false, negative or disparaging statements about [Sipes Body]; shall refrain from representing that any insurance company is not willing to accept estimates from [Sipes Body]; shall refrain from refusing to process estimates from [Sipes Body]; and shall refrain from discouraging or preventing policyholders from submitting estimates from [Sipes Body].

R. 79-80. This appeal ensued.

Discussion and Decision
I. Injunctive Relief
A. Standard of Review for Injunctive Relief

The issuance of a preliminary injunction is within the sound discretion of the trial court, and the scope of appellate review is limited to deciding whether there has been a clear abuse of discretion. Reilly v. Daly, 666 N.E.2d 439, 443 (Ind.Ct. App.1996), trans. denied. When determining whether or not to grant a preliminary injunction, the trial court is required to make special findings of fact and state its conclusions thereon. Ind. Trial Rule 52(A). When findings and conclusions are made, the reviewing court must determine if the trial court's findings support the judgment. Norlund v. Faust, 675 N.E.2d 1142, 1149 (Ind.Ct.App.1997), trans. denied. The trial court's judgment will be reversed only when clearly erroneous. Id. Findings of fact are clearly erroneous when the record lacks evidence or reasonable inferences from the evidence to support them. Id. We consider the evidence only in the light most favorable to the judgment and construe findings together liberally in favor of the judgment. Id.

The trial court's discretion to grant or deny preliminary injunctive relief is measured by several factors: 1) whether the plaintiff's remedies at law are inadequate, thus causing irreparable harm pending the resolution of the substantive action if the injunction does not issue; 2) whether the plaintiff has demonstrated at least a reasonable likelihood of success at trial by establishing a prima facie case; 3) whether the threatened injury to the plaintiff outweighs the threatened harm the grant of the injunction may inflict on the defendant; and 4) whether, by the grant of the preliminary injunction, the public interest would be disserved. Reilly, 666 N.E.2d at 443. In order to grant a preliminary injunction, the moving party has the burden of showing, by a preponderance of the evidence, that the facts and circumstances entitle him to injunctive relief. Id. The power to issue a preliminary injunction should be used sparingly, and such relief should not be granted except in rare instances in which the law and facts are clearly within the moving party's favor. Id.

B. Adequate Remedy at Law

The Barlows first contend that the trial court abused its discretion in granting a preliminary injunction in favor of Sipes Body because an adequate remedy at law is available, a suit for money damages. We disagree.1

Our initial inquiry is to determine the injury Sipes Body alleges it has suffered as a result of the Barlows' tortious conduct. After examining the record, it is apparent that Sipes Body is alleging both economic injury and reputational harm. Sipes Body pleads two causes of action in its complaint: 1) intentional interference with a business relationship; and 2) defamation. Moreover, Sipes Body's complaint provides in part that that the Barlows' "insurance business requires them to discuss vehicle repair options with their policyholders on a regular and continuing basis" and the Barlows' "continued interference with [Sipes Body's] business relationships and publication of defamatory statements about [Sipes Body] will cause [Sipes Body] continued injury." R. 9. Also, Sipes Body alleges in its Verified Motion for a Preliminary Injunction that the Barlows' tortious conduct is causing irreparable injury to its business and reputation in the community. Furthermore, Dexter and Dan Sipes voiced their concern at the preliminary injunction hearing that the Barlows' tortious conduct was causing irreparable injury to their reputation in the eyes of the community and loss of business profits. R. 110-11, 117-19. Therefore, we must examine whether a suit for money damages is an adequate remedy at law for Sipes Body's economic injury and reputational harm.

1. Economic Injury

Sipes Body in part seeks relief for the lost profits of its business due to the tortious conduct of the Barlows, harm that is properly characterized as pure economic injury. Sipes Body alleged that a preliminary injunction is warranted to stop the Barlows from further diminishing their profits by deterring customers from patronizing their business establishment. Injunctions are a powerful equitable tool to be used only in clear and plain cases. Barnard et al. v. Shirley, 135 Ind. 547, 34 N.E. 600, 602 (1893). 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. 42 Am.Jur.2d, Injunctions § 13 (1969).

We have previously held that a party that suffers mere economic injury is not entitled to injunctive relief because an award of post-trial damages is sufficient to...

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