MSM Poly, LLC v. Textile Rubber & Chem. Co.

• Decision Date: 10 February 2020
• Docket Number: A19A1719
• Parties: MSM POLY, LLC et al. v. TEXTILE RUBBER AND CHEMICAL COMPANY, INC.
• Court: Georgia Court of Appeals

353 Ga.App. 538

839 S.E.2d 4

MSM POLY, LLC et al.

v.TEXTILE RUBBER AND CHEMICAL COMPANY, INC.

A19A1719

Court of Appeals of Georgia.

February 10, 2020

Baker Donelson Bearman Caldwell & Berkowitz, Kevin A. Stine, Joshua N. Tropper, Tim J. Colletti, for appellants.

The Minor Firm, Jonathan L. Bledsoe, Brittany M. Dant, for appellee.

Phipps, Senior Appellate Judge.

The Superior Court of Whitfield County entered an order enjoining Appellants MSM Poly, LLC ("MSM Poly"), and Patrick Mickle ("Mickle") (collectively, "Appellants") from their alleged continuing trespass at appellee Textile Rubber and Chemical Company, Inc.’s ("TRCC") plant and warehouse located in Greenville, South Carolina ("the Premises"). The injunction required Appellants to remove certain equipment and inventory that they had been maintaining at TRCC’s Premises. On appeal, Appellants claim error on the grounds that (1) the trial court lacked subject matter jurisdiction to enjoin a continuing trespass on the Premises located in South Carolina; (2) Mickle was improperly included in the scope of the injunction when there is no evidence that he had any title or interest in the equipment at the Premises; and (3) Appellants were erroneously required to remove acrylonitrile, a highly toxic and heavily regulated substance, from the Premises when there was no evidence that the substance was owned by Appellants rather than TRCC. Because we agree that the trial court lacked subject matter jurisdiction to enter the injunction, we vacate the trial court’s order.

The undisputed evidence of record reflects that TRCC, a Georgia corporation, and MSM Poly, a Delaware limited liability company, entered a Toll Manufacturing Agreement ("the Agreement") pursuant to which TRCC agreed to manufacture and sell to MSM Poly acrylonitrile methyl acrylate copolymer in filtered, wet form. Mickle was the managing member of MSM Poly and signed an "Application for Credit," which included a personal guarantee in which he agreed to pay all debts incurred within the terms of sale under the Agreement. To further facilitate the terms of the Agreement, TRCC allowed MSM Poly to maintain certain equipment and inventory at TRCC’s Premises.

Appellants allegedly defaulted on the Agreement and guarantee by failing to pay the outstanding invoices that TRCC had submitted. After the alleged default, TRCC demanded that Appellants remove the equipment that was being maintained at the Premises. Notwithstanding TRCC’s demands, Appellants failed to remove the equipment.

TRCC filed a verified complaint in the trial court, asserting causes of action for suit on account, breach of the Agreement, breach of the personal guarantee, trespass, injunctive relief, punitive damages, and attorney fees. Appellants filed verified answers, admitting that MSM Poly’s equipment was being maintained at the Premises, but claiming that the equipment had not been removed because TRCC had not allowed access to the Premises.

During the proceedings, TRCC filed a motion for a temporary restraining order ("TRO") and injunctive relief to compel Appellants’ removal of the equipment and inventory from the Premises. The trial court conducted a hearing, at which counsel for both parties appeared, to address the merits of the motion.¹ Following the hearing, the trial court entered an order granting TRCC’s request for injunctive relief. Appellants then filed the instant appeal to challenge the order of injunction.

1. First, "[i]t is incumbent upon this Court to inquire into its own jurisdiction." (Citation and punctuation omitted.) Ledford v. Mobley , 321 Ga. App. 761, 761, 743 S.E.2d 461 (2013). The trial court’s order was denominated as a "Temporary Restraining Order." Unlike injunctions, TROs are not directly appealable. Compare OCGA § 5-6-34 (a) (4) (providing for direct appeals for orders granting or refusing interlocutory or final injunctions), with OCGA § 5-6-35 (a) (9) (requiring an application for discretionary appeal to challenge "orders granting or denying temporary restraining orders"). Appellants initially filed a discretionary application under Case No. A19D0368 to pursue this appeal. But Appellants withdrew their discretionary application and filed the instant direct appeal instead.

Although the injunction in this case is denominated as a TRO, there is no magic in nomenclature. A document is to be construed by its substance or function, rather than by its name. Thus, where a TRO is entered after a lengthy adversary hearing and effectively grants the plaintiff all of the relief [it] sought, it is directly appealable.

(Citations omitted.) Dolinger v. Driver , 269 Ga. 141, 142 (1), 498 S.E.2d 252 (1998). Here, the trial court’s order was entered after an evidentiary hearing at which both sides were present. The order did not merely preserve the status quo pending further proceedings; rather, the order directed action which effectively gave TRCC all of the injunctive relief that it sought by requiring Appellants to remove the equipment and inventory from the Premises indefinitely. It thus follows that the nature of the trial court’s order granted an injunction, which was directly appealable. See id. We therefore are vested with jurisdiction to review Appellants’ claims in this appeal.

TRCC nevertheless contends that this appeal became moot when MSM Poly subsequently assigned its rights and title to the equipment and inventory to a third party.² The purported assignment from MSM Poly to an entity identified as MSM (ABC), LLC, was made on March 7, 2019, after the injunction was entered. Pretermitting whether the assignment divested MSM Poly of its ownership interest,³ the assignment does not purport to assign any ownership interest that Mickle may have had in the equipment and inventory.⁴ To the extent that the injunction also applied to Mickle, the claims of this appeal are not moot.

2. Appellants contend that the trial court lacked subject matter jurisdiction to enjoin a trespass occurring at the Premises located outside of this state. We agree and must vacate the order of injunction on this ground.

Here, the trial court’s order of injunction required Appellants to remove equipment and inventory from the Premises located in Greenville, South Carolina. The Supreme Court of Georgia has long held that a court of equity in this state lacks subject matter jurisdiction to enjoin a continuing trespass where the land in question is located in another state or country. See Laslie v. Gragg Lumber Co. , 184 Ga. 794, 798-799 (1), 193 S.E. 763 (1937). Because it is undisputed that the property at issue is located outside of this state, the trial court lacked subject matter jurisdiction to issue the injunction. Id.

TRCC nevertheless asserts that the trial court was vested with jurisdiction pursuant to a forum selection clause in the parties’ Agreement whereby MSM Poly consented to the exclusive jurisdiction of the trial court. The forum selection clause, entitled "Governing Law; Venue," states as follows:

Each of the parties consents to the exclusive jurisdiction of the Superior Court of Whitfield County, Georgia for any legal action, suit, or proceeding arising out of or in connection with this Agreement, and agree that any such action, suit, or proceeding may be brought only in such court. Each of the parties further waives any personal jurisdiction defense regarding the laying of venue for any such suit, action, or proceeding in such court.

To the extent that the forum selection clause purports to confer subject matter jurisdiction to the trial court, it is invalid....