Christo v. Tuscany, Inc.
| Decision Date | 02 November 1987 |
| Docket Number | No. 1203,1203 |
| Citation | 368 Pa.Super. 9,533 A.2d 461 |
| Parties | Thomas S. CHRISTO and Blanche Greenberger, Appellees, v. TUSCANY, INC., a corporation, Brittany, Inc., a corporation, Phoebe M. Rennekamp, William A. Rennekamp, Antoinette B. Tchirkow, and Antoinette B. Tchirkow, Executrix of the Estate of Edgar G. Tchirkow, Deceased. Appeal of Antoinette B. TCHIRKOW, Antoinette B. Tchirkow, Executrix of the Estate of Edgar G. Tchirkow, Deceased, Tuscany, Inc., a corporation and Brittany, Inc., a corporation. Pitts. 1986. |
| Court | Pennsylvania Superior Court |
Maurice A. Nernberg, Pittsburgh, for appellants.
Douglas E. Cameron, Pittsburgh, for Greenberger, Tuscany and Brittany, appellees.
Before WIEAND, KELLY and POPOVICH, JJ.
Appellants appeal from dismissal of their counterclaim and entry of summary judgment in favor of appellees. Appellants argue that their recovery of damages for an improvidently issued injunction should not be limited by the amount of the bond. We agree. They further argue their damages recoverable should reflect lost interest income. We remand for fact-finding on this issue.
This appeal represents the first opportunity for this Court to rule directly on whether Pa.R.C.P. 1531(b) insulates a plaintiff from damages in excess of the bond amount when an injunction is later found to have been improvidently granted. Although the Commonwealth Court passed on a similar issue in Juniata Foods v. Mifflin County Development Authority, 87 Pa.Cmwlth. 127, 486 A.2d 1035 (1985), that case is not dispositive of the issue raised herein. 1
This action has followed a complicated if not tortuous route through the courts of this Commonwealth, and we set forth that procedural history in detail, as follows. Plaintiffs, Thomas C. Christo and Blanche Greenberger, originally filed a suit at law to recover real estate commissions allegedly owed to them. On October 18, 1976, plaintiffs filed a complaint in equity and petition for preliminary injunction against Tuscany, Inc., Brittany, Inc., Phoebe M. Rennekamp, William A. Rennekamp, Antoinette B. Tchirkow individually, and as executrix of the estate of Edgar G. Tchirkow, deceased [hereinafter appellants]. Plaintiffs/appellees filed the suit in equity when appellants caused the two corporations named as defendants in the prior suit to be dissolved.
A hearing on the equity petition was held on October 28, 1976, and, by order dated December 3, 1976, the court granted the preliminary injunction and required appellants to deposit $80,000 at First Federal Savings and Loan of Pittsburgh, in an interest-bearing account, as security for any judgments in favor of plaintiffs in the brokerage commission actions. By order dated March 21, 1977, the court ordered the funds transferred to a savings deposit at Concord Liberty Savings and Loan Association. The funds deposited in the savings account earned a return of five and three-quarters percent (5 3/4%) interest.
Appellants filed a demurrer to the equity action; the demurrer was denied. Appellants next, on March 19, 1979, filed an answer, new matter and counterclaim to the equity action. The counterclaim alleged that appellants were suffering damages by reason of the fact that the $80,000 security deposit was earning 5 3/4% interest, while investment rates were offering 10% interest returns.
On March 27, 1979 appellants moved to dissolve the injunction, or in the alternative, to have plaintiffs post a bond pursuant to Pa.R.C.P. 1531(b). The equity court denied the motion on April 2, 1979. Appellants filed a timely appeal to this Court; by opinion dated November 30, 1982, this Court reversed the order and remanded the case, finding that the equity court erred in failing to have plaintiffs post a bond. Pa.R.C.P. 1531(b). Christo v. Tuscany, Inc., 308 Pa.Super. 564, 454 A.2d 1042 (1982).
Upon remand, on September 12, 1983, the lower court ordered plaintiffs to post a nominal bond of one dollar ($1.00). Appellants filed a timely appeal from this order, which was docketed in this Court at No. 1138 Pittsburgh 1983. In the interim, plaintiffs' original suit for broker commissions had been dismissed by the trial court on summary judgment, and that judgment had been unsuccessfully challenged through all stages of the appellate process. Consequently, after the original suit was finally litigated, motions were made in this Court at No. 1138 Pittsburgh 1983, including: appellants' motion for special relief; plaintiffs' motion to dismiss the equity suit for mootness; and answers thereto. After a hearing in this Court on February 9, 1984, the Honorable John P. Hester dissolved the December 3, 1976 injunction, directed the release of the escrowed $80,000 to appellants, and remanded the appeal at No. 1138 Pittsburgh 1983 (from the order imposing one dollar bond) to the lower court for an adjudication on appellants' counterclaim for damages which had been filed in March 1979. On remand, the lower court granted plaintiffs' motion for summary judgment. This appeal timely followed.
Appellant raises two issues on appeal:
I. Where a Plaintiff is ordered by the trial court to post only a one dollar ($1.00) injunction bond as security for Defendant's damages upon termination of the injunction proceedings, is Defendant limited to an action on the bond or the amount of the bond in its claim for damages for its economic losses from the injunction proceedings?
II. Where a Defendant is ordered to deposit substantial funds in a passbook savings account with an interest rate of 5 3/4 percent, when there are other investment opportunities paying 10 percent to 21 percent, are Defendant's damages so speculative as to be noncompensable in an action for damages?
We shall address these claims, seriatim. 2
Appellants' first issue raises a point not directly passed upon by our courts since the adoption by our Supreme Court of the Rules of Civil Procedure in 1952. Appellants argue that they are not limited by the amount of the injunction bond in their claim for damages because Pa.R.C.P. 1531(b) authorizes recovery for "all damages" incurred. Plaintiffs counter that the rule should be construed so as to limit recovery to the amount of the bond. Therefore, we are called upon to resolve this conflict as to the proper construction of the language of Pa.R.C.P. 1531(b). Specifically, the rule states:
(b) Except when the plaintiff is the Commonwealth of Pennsylvania, a political subdivision or a department, board, commission, instrumentality or officer of the Commonwealth or of a political subdivision, a preliminary or special injunction shall be granted only if
(1) the plaintiff files a bond in an amount fixed with the security approved by the court, naming the Commonwealth as obligee, conditioned that if the injunction is dissolved because improperly granted or for failure to hold a hearing, the plaintiff shall pay to any person injured all damages sustained by reason of granting the injunction and all legally taxable costs and fees, or
(2) the plaintiff deposits with the prothonotary legal tender of the United States in an amount fixed by the court to be held by the prothonotary upon the same condition as provided for the injunction bond.
(Emphasis added).
Our duty is to accord the language utilized by the Supreme Court its plain meaning. Pa.R.C.P. 127(b); Cf. Salvado v. Prudential Property and Cas. Ins. Co., 287 Pa.Super. 304, 430 A.2d 297 (1981). We construe the rule as a mandate that a petitioner file a bond, in the amount fixed by the court, prior to the court's issuance of the requested special relief. Soja v. Factoryville Sportsmen's Club, 361 Pa.Super. 473, 522 A.2d 1129 (1987); Christo v. Tuscany, Inc., supra (). The rule further states that the bond is subject to the condition that plaintiff shall pay from the bond "all" damages sustained by reason of the injunction upon dissolution of the injunction. Clearly, the rule provides that the bond shall be subject to disbursement to pay damages; however, the rule is somewhat less than clear regarding the question of whether other funds may also be subject to disbursement to pay "all" damages.
To date, there have been no cases which have directly addressed this issue. However, the Commonwealth Court has passed on a substantially similar issue. In Juniata Foods, supra, the plaintiff, a governmental entity, sought and gained a preliminary injunction against defendant. The plaintiff posted no bond, as the Commonwealth is exempt from the need to post bond. Pa.R.C.P. 1531(b). When the injunction was dissolved as improperly granted, defendant sued the Commonwealth for damages. The issue was whether recovery was foreclosed as no bond had been posted. The Court held that a "bond is not a condition precedent to obtaining damages from a governmental entity." Rather, "[t]he bond requirement in Pa.R.C.P. 1531(b)(1) is merely to insure a ready source for payment of damages if due." Juniata Foods v. Mifflin County Development Authority, supra, 486 A.2d at 1037. Therefore, where no bond is set, an action for damages may still lie against the Commonwealth. This Court's task is to determine whether an action upon the bond would be the sole source of recovery from a non-governmental plaintiff.
As we deem the plain meaning of the express language of the rule ambiguous on this point, further analysis as to the rule's meaning must be made in accordance with the rules of construction set forth in the Rules of Civil Procedure. Specifically:
Rule 127. Construction of Rules. Intent of Supreme Court Controls
(a) The object of all interpretation and construction of rules is to ascertain and effectuate the intention of the Supreme Court.
(b) Every rule shall be construed, if possible, to give effect to all its provisions. When the words of a rule are clear and free from all ambiguity, the letter of it is not to be...
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