Jay County Rural Elec. Membership Corp. v. Wabash Valley Power Ass'n, Inc.
| Decision Date | 16 March 1998 |
| Docket Number | No. 33A04-9706-CV-260,33A04-9706-CV-260 |
| Parties | JAY COUNTY RURAL ELECTRIC MEMBERSHIP CORPORATION, Appellant-Plaintiff, v. WABASH VALLEY POWER ASSOCIATION, INC. and Kosciusko County Rural Electric Membership Corporation, Appellees-Defendants. |
| Court | Indiana Appellate Court |
Plaintiff-Appellant Jay County Rural Electric Membership Corporation (Jay County) appeals the trial court's grant of a preliminary injunction in Jay County's action against Wabash Valley Power Association, Inc. (WVPA) and Kosciusko County Rural Electric Membership Corporation.
We affirm.
Jay County raises a multi-part issue for our review, which we state as: whether the trial court erred in issuing the preliminary injunction requested by WVPA.
Jay County is a rural electric membership corporation organized under the Indiana REMC Act. It purchases wholesale electricity and distributes it at retail to about 5100 member-customers. WVPA is an electric generation and transmission cooperative organized under the Indiana Nonprofit Corporations Act. It sells wholesale electricity to its twenty-four member systems and to certain non-members. WVPA was formed to allow relatively small entities to combine their power requirements to achieve leverage to invest in generation and transmission assets and to obtain long-term sources of reasonably priced power. Both Jay County and WVPA operate as nonprofit corporations.
Prior to joining WVPA, Jay County purchased its electricity requirements from Indiana & Michigan Electric Company ("I & M"), an investor-owned utility serving the area in which Jay County was located. In October of 1974, I & M notified Jay County that it would continue to provide electricity only if Jay County agreed to new terms and conditions. Jay County investigated alternative suppliers and determined that membership in WVPA would be more cost efficient than continuing a relationship with I & M.
Jay County became a WVPA member under an all-requirements wholesale power supply contract (the "all-requirements contract") that it signed with WVPA. The contract, which was signed on March 7, 1977, requires Jay County to purchase all of its power and energy requirements for its system from WVPA to the extent that WVPA has power and energy available. 1 The contract provides that WVPA's wholesale rates are to be set by a Board of Directors composed of one representative for each member system (including Jay County), subject to approval by the Indiana Utility Regulatory Commission. Revenues collected by WVPA in excess of its costs are allocated among the members in the form of "patronage capital" accounts.
The all-requirements contract was developed by the Rural Electrification Administration, now known as the Rural Utilities Service (hereinafter, "RUS"), as the principal collateral for over forty billion dollars in loans and loan guarantees that RUS has provided to cooperatives across the country for the last sixty years. The all-requirements contract between WVPA and each of its members allows the members to develop, purchase, and secure generation and transmission resources without having to provide individual guarantees for the financing extended to WVPA. WVPA members thus assumed the obligation to purchase their entire power requirements from WVPA to obtain the benefit of receiving a long-term source of reliable and reasonably priced power.
In December of 1996, Jay County advised WVPA that it was not nominating a representative to serve on the WVPA Board of Directors during 1997. Subsequently, Jay County sent notices purporting to withdraw its membership in WVPA and to terminate the all-requirements contract with WVPA. It then filed a complaint against WVPA, which in part asked the trial court to declare its withdrawal and termination valid. It also negotiated a contract with Cinergy that would guarantee better prices for electricity. WVPA moved for a temporary restraining order and preliminary injunction to require Jay County to purchase its wholesale electricity exclusively from WVPA during the pendency of the litigation. The trial court issued a preliminary injunction requiring Jay County to continue purchasing its power requirements from WVPA until final judgment or further court order. 2 The injunction also required WVPA to maintain a million dollar bond that had been posted in connection with the previously granted temporary restraining order.
Pursuant to Ind.Appellate Rules 2(A) and 4(B)(3), Jay County timely initiated an interlocutory appeal of the trial court's issuance of the preliminary injunction. The trial court approved Jay County's petition for appeal.
The grant or denial of a preliminary injunction lies within the sound discretion of the trial court. Indiana State Bd. of Public Welfare v. Tioga Pines Living Center, Inc., 637 N.E.2d 1306, 1311 (Ind.Ct.App.1994), reh'g denied. We will not interfere with the exercise of that discretion unless it is shown that the trial court's action was arbitrary or constituted a clear abuse of discretion. Id. In reviewing the trial court's action, we will not weigh conflicting evidence but will consider only the evidence supporting the trial court's findings, conclusions of law, and order. College Life Insurance Co. of America v. Austin, 466 N.E.2d 738, 744 (Ind.Ct.App.1984). The trial court's findings do not support the judgment where they are clearly erroneous or insufficient to disclose a valid basis for the legal result reached by the judgment. Fumo v. Medical Group of Michigan City, Inc., 590 N.E.2d 1103, 1107 (Ind.Ct.App.1992), reh'g denied, trans. denied. The findings are clearly erroneous when the record lacks any facts or reasonable inferences to support them. Id. at 1107-08. The trial court's discretion to grant or deny a preliminary injunction is measured by several factors: (1) whether the movant's remedies at law are inadequate, thus causing irreparable harm pending resolution of the substantive action if the injunction does not issue; (2) whether the movant has demonstrated at least a reasonable likelihood of success at trial by establishing a prima facie case; (3) whether the threatened injury to the movant outweighs the threatened harm the grant of the injunction would occasion upon the nonmovant; and (4) whether, by the grant of the preliminary injunction, the public interest would be disserved. Xantech Corp. v. Ramco Industries, Inc., 643 N.E.2d 918, 921 (Ind.Ct.App.1994). If the movant fails to prove any one or more of these requirements, the trial court's grant of an injunction is an abuse of discretion. Id. We examine the trial court's findings and conclusions as they pertain to each requirement.
Jay County contends that the trial court erred in concluding that WVPA's legal remedy was inadequate and that WVPA would have suffered irreparable harm if the preliminary injunction had not been granted. Jay County characterizes the harm to WVPA as economic injury and cites cases which hold that "mere economic injury" is not sufficient harm to support the grant of a preliminary injunction. See, e.g., Whiteco Industries, Inc. v. Nickolick, 549 N.E.2d 396, 399 (Ind.Ct.App.1990); Wells v. Auberry, 429 N.E.2d 679, 684 (Ind.Ct.App.1982). Jay County reasons that WVPA can be fully compensated through payment of damages for any injury that it may suffer during the pendency of the adjudication of this matter. Thus, it reasons that payment of damages is an adequate remedy.
The object of a preliminary injunction is "to maintain the status quo pending adjudication of the underlying claim." Wells, 429 N.E.2d at 683. The necessity of maintaining the status quo is to prevent harm to the moving party which could not be corrected by a final judgment. Id. Id.
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." McKain v. Rigsby, 250 Ind. 438, 237 N.E.2d 99, 103 (1968). The trial court has a duty to determine "whether the legal remedy is as full and adequate as the equitable remedy." Id.
Stated simply, a party which suffers only "mere economic injury" is not entitled to injunctive relief because an award of post-trial damages is sufficient to make the party whole. However, a party which suffers economic injury that cannot be remedied by post-trial damages is entitled to injunctive relief.
In the present case, the trial court concluded that "quantification of WVPA's damages in this cause would be extremely difficult and there is a likelihood that WVPA's legal remedy as a consequence, is inadequate." The court further concluded that WVPA's "remedy of law is inadequate in that Jay County would have insufficient liquid assets, and/or insufficient non-liquid assets against which it might obtain funding, to pay an award of damages to WVPA in this cause." (R. 921). We address the...
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