Sid Dillon Chevrolet-Oldsmobile-Pontiac, Inc. v. Sullivan

• Decision Date: 07 February 1997
• Docket Number: INC,No. S-94-1176,CHEVROLET-OLDSMOBILE-PONTIA,S-94-1176
• Citation: 559 N.W.2d 740,251 Neb. 722
• Parties: SID DILLON, et al., Appellees, v. Morton SULLIVAN et al., Appellants.
• Court: Nebraska Supreme Court

Page 740

559 N.W.2d 740

251 Neb. 722

SID DILLON CHEVROLET-OLDSMOBILE-PONTIAC, INC., et al., Appellees, v. Morton SULLIVAN et al., Appellants.

No. S-94-1176.

Supreme Court of Nebraska.

Feb. 7, 1997.

Syllabus by the Court

1. Injunction: Equity. An action for injunction sounds in equity.

2. Equity: Appeal and Error. In an appeal from an equitable action, a reviewing court reviews the action de novo on the record and reaches a conclusion independent of the factual findings of the lower court, subject to the rule that where credible evidence is in conflict on material issues of fact, the reviewing court may consider and give weight to the fact that the trial court observed the witnesses and accepted one version of the facts over another.

3. Injunction. An injunction is an extraordinary remedy and should not ordinarily be granted except in a clear case where there is actual and substantial injury. Such a remedy should not be granted unless the right is clear, the damage is irreparable, and the remedy at law is inadequate to prevent a failure of justice.

4. Injunction: Equity: Libel and Slander. Equity will not enjoin a libel or slander, absent a prior adversarial determination that the complained of publication is false or a misleading representation of fact, unless such libel or slander is published (1) in violation of a trust or contract or (2) in aid of another tort or unlawful act, or injunctive relief is essential for the preservation of a property right.

5. Contempt. The collateral bar rule requires that a party may not, as a general rule, violate a court order and raise the issue of its unconstitutionality collaterally as a defense in a contempt proceeding.

6. Attorney Fees. Attorney fees may be recovered only when authorized by statute or when a recognized and accepted uniform course of procedure allows recovery of an attorney fee.

Michael M. O'Brien, of Cannon, Goodman, O'Brien & Grant, P.C., Omaha, for appellants.

J. Joseph McQuillan, of Walentine, O'Toole, McQuillan & Gordon, Omaha, for appellees.

WHITE, C.J., and CAPORALE, FAHRNBRUCH, LANPHIER, WRIGHT, CONNOLLY, and GERRARD, JJ.

GERRARD, Justice.

The district court found appellant Morton Sullivan and his businesses to be in contempt of court in regard to Sullivan's repeated violations of a temporary restraining order prohibiting him from uttering any word concerning appellees Sid Dillon and his businesses. Although Sullivan's and Dillon's businesses are named as parties to this action, we will refer to the appellants as Sullivan and the appellees as Dillon, since the focus of this opinion is on these individuals. Further, the district court substituted a permanent injunction for its temporary restraining order in regard to Sullivan's conduct and speech directed toward Dillon which it deemed violative of the Uniform Deceptive Trade Practices Act, Neb.Rev.Stat. § 87-301 et seq. (Reissue 1994), and assessed attorney fees against Sullivan. It is from these orders that Sullivan appeals.

We affirm the district court order finding Sullivan in contempt of court and the court's award of attorney fees in this regard. However, we conclude that the district court erred when it entered the temporary restraining order enjoining Sullivan's speech pursuant to the Uniform Deceptive Trade Practices Act. We likewise conclude the district court erred when it entered the permanent injunction further restraining Sullivan's speech and in awarding Dillon attorney fees in this regard.

ASSIGNMENTS OF ERROR

Sullivan assigns that the district court erred as follows: (1) by finding him in violation of the Uniform Deceptive Trade Practices Act, (2) in granting a permanent injunction in violation of Sullivan's First Amendment rights, (3) by finding him in contempt of court and imposing a civil penalty for his alleged violations of the temporary restraining order, and (4) in awarding Dillon reasonable attorney fees.

STANDARD OF REVIEW

An action for injunction sounds in equity. Latenser v. Intercessors of the Lamb, Inc., 250 Neb. 789, 553 N.W.2d 458 (1996); Ben Simon's, Inc. v. Lincoln Joint-Venture, 248 Neb. 465, 535 N.W.2d 712 (1995). In an appeal from an equitable action, a reviewing court reviews the action de novo on the record and reaches a conclusion independent of the factual findings of the lower court, subject to the rule that where credible evidence is in conflict on material issues of fact, the reviewing court may consider and give weight to the fact that the trial court observed the witnesses and accepted one version of the facts over another. Engelhaupt v. Village of Butte, 248 Neb. 827, 539 N.W.2d 430 (1995).

FACTUAL BACKGROUND

Sullivan owns and operates various advertising and information businesses in the Omaha area. Dillon owns and operates three General Motors automobile dealerships in Nebraska: two in Fremont and one in Blair.

On October 5, 1990, Sullivan took possession of a new 1990 Chevrolet Suburban from On September 13, while in Fremont, Sullivan's Suburban quit running. Sullivan elected to have his vehicle towed to Dillon's Fremont Chevrolet dealership for repairs. It was discovered that an electrical junction box had shorted-out, causing the vehicle to stall. The service manager for the dealership testified that he thought the short was caused by the improper installation of "after-market" electronic equipment. The junction box was replaced, and, in addition, Dillon's changed the oil, and rotated and balanced the tires. The service manager testified that when Sullivan picked up his vehicle, Sullivan did not ask whether the repair was covered by either the standard General Motors new car warranty or Sullivan's separate extended protection plan warranty. Sullivan disputes this testimony and claims that he inquired as to whether the repair was covered by one of his warranties and was told that it was not. However, Sullivan was unable to recall which Dillon's employee specifically told him the repair was not a covered item.

                Vinton Motors in Blair.  Sullivan obtained this vehicle as part of a negotiated settlement between General Motors and himself in regard to Sullivan's claim that the 1989 Suburban he purchased from a Lincoln Chevrolet dealership was a "total lemon."   In addition, Sullivan received a General Motors extended protection plan warranty.  Sullivan had his new Suburban serviced at Vinton Motors on more than one occasion.  A receipt indicates that on July 2, 1991, Vinton Motors repaired the Suburban's front brakes.  On August 1, Dillon entered into an agreement to purchase the assets of Vinton Motors and some time later began to operate the Blair General Motors dealership under his name
                

Sullivan continued to experience problems with his brakes, and on December 4, he presented his Suburban to Dillon's dealership in Blair for further repairs. The invoice from this repair indicates many of the same items previously repaired by Vinton Motors in July needed to be fixed again. Dillon did not charge Sullivan for this repair work but did charge Sullivan $67.49 for other service unrelated to the brake repairs. Sullivan paid for the service with a check, but said when he drove away that he immediately knew the brake problem had not been ameliorated. Sullivan returned to the Blair dealership the next day and complained to the service manager. Sullivan said the service manager refused to make further repairs. In response, Sullivan stopped payment on his check.

Dillon testified that sometime in January 1992, Sullivan came into his Fremont dealership and asked to see him. Dillon asked his son, Sid Dillon, Jr., to sit in on this meeting. Dillon, Sr., said Sullivan presented him with a pile of papers, some of which appeared to be General Motors repair invoices, and asked Dillon what he was going to do about that "stack of papers." Dillon said that he told Sullivan there was nothing he was going to do about them and that he did not want to do business with Sullivan any longer.

Not surprisingly, Sullivan's recollection of this meeting is different. Sullivan claims he went to see Dillon to apologize for stopping payment on the check and to give Dillon a cashier's check for the amount in question. Sullivan said he intended to tell Dillon he wanted to do business with him and inquire as to whether Dillon would honor the General Motors warranties on his Suburban. However, Sullivan claimed Dillon pointed his finger at him and started shouting that he knew of Sullivan's past practices, that under no circumstances would he honor any warranties on Sullivan's vehicle, and that he never wanted to see Sullivan's vehicle in any of his dealerships again.

In February 1992, Sullivan telephoned and faxed employees of the General Motors Protection Plan in Michigan, inquiring as to whether any of the repairs performed by Dillon should have been covered under his extended warranty plan. In a letter, Thomas England, claims supervisor for General Motors Insurance Corporation, responded that $60.52 of the repair in regard to the electrical junction box was covered and offered to reimburse Sullivan that amount. However, England testified that at the time he wrote the letter to Sullivan, he was unaware of the fact that the installation of after-market electronic equipment was thought to be the cause of the junction box failure. England said that had he been informed of this fact, he would have told Sullivan the repair was not covered by his warranties. Furthermore, John Rahie, a In March, Sullivan sent a letter to Dillon in which he demanded that Dillon replace his 1990 Suburban with a new 1992 Suburban and an extended warranty plan. This demand was accompanied with the threat that if Dillon did not comply, Sullivan would become Dillon's "WORST NIGHTMARE" by informing everyone that Dillon was a dishonest dealer because he charged customers for warranty repairs and would not honor General Motors warranties. Sullivan's expressed goal was to put Dillon out of...