Stocker Hinge Mfg. Co. v. Darnel Industries, Inc.

• Decision Date: 10 August 1981
• Docket Number: No. 80-1726,80-1726
• Citation: 54 Ill.Dec. 685,99 Ill.App.3d 340,425 N.E.2d 550
• Parties: , 54 Ill.Dec. 685 STOCKER HINGE MFG. CO., Plaintiff-Appellant and Cross-Appellee, v. DARNEL INDUSTRIES, INC., Samuel A. Hoffman and S & S Hinge Company, Defendants- Appellees and Cross-Appellants.
• Court: United States Appellate Court of Illinois

Page 550

425 N.E.2d 550

99 Ill.App.3d 340, 54 Ill.Dec. 685

STOCKER HINGE MFG. CO., Plaintiff-Appellant and Cross-Appellee, v. DARNEL INDUSTRIES, INC., Samuel A. Hoffman and S & S Hinge

Company, Defendants- Appellees and Cross-Appellants.

No. 80-1726.

Appellate Court of Illinois, First District, First Division.

Aug. 10, 1981.

Gordon B. Nash, Jr., Chicago (Gardner, Carton & Douglas, Chicago, of counsel), for plaintiff-appellant and cross-appellee Stocker Hinge Mfg. Co.

Ronald R. Rassin, Chicago (Fink, Coff, Stern & Baron, Ltd., Chicago, of counsel), for defendants-appellees and cross-appellants Darnel Industries, Inc. and Samuel A. Hoffman.

GOLDBERG, Justice:

A lengthy trial court hearing terminated in an order entered December 2, 1977, which dissolved a temporary restraining order (TRO) entered on the motion of Stocker Hinge Mfg. Co. (plaintiff), against Darnel Industries, Inc. and Samuel A. Hoffman (defendants), and also S & S Hinge Company (S & S), and which denied the motion of plaintiff for a preliminary injunction. That order was affirmed by this court. Stocker Hinge Mfg. Co. v. Darnel Industries, Inc. (1978), 61 Ill.App.3d 636, 18 Ill.Dec. 489, 377 N.E.2d 1125, leave to appeal denied, 71 Ill.2d 615.

On December 29, 1977, after entry of the order which was the subject of the previous appeal, defendants filed a verified motion seeking attorneys' fees and damages predicated upon the alleged wrongful issuance of the TRO. Similarly, S & S filed a written verified motion for attorneys' fees and expenses. (See Ill.Rev.Stat.1979, ch. 69, par 12.) After disposition of the appeal, the parties proceeded before the trial court with lengthy hearings on the issue of attorneys' fees and damages. These hearings extended over seven months and augmented the record by some 1200 pages. The trial judge allowed defendants' attorneys' fees of $27,500 and litigation expenses of $1941.75 being a total of $29,441.75. The trial court also allowed S & S attorneys' fees of $14,500 and litigation expenses of $872.75, a total of $15,372.75.

Plaintiff has appealed. There is also a cross-appeal by defendants and S & S in which they seek to broaden the scope of their recovery and thus to augment it. The relationship of these parties and the complicated pertinent facts appear in our previous opinion.

The legal background of this matter appears from Ill.Rev.Stat.1979, ch. 69, par. 12:

"In all cases where a temporary restraining order or a preliminary injunction is dissolved by the circuit court or by the reviewing court, the circuit court, after the dissolution of the temporary restraining order or preliminary injunction, and before finally disposing of the action shall, upon the party claiming damages by reason of such temporary restraining order or preliminary injunction, filing a petition under oath setting forth the nature and amount of damages suffered, determine and enter judgment in favor of the party aggrieved by such temporary restraining order or preliminary injunction for the damages which the party suffered as a result thereof, * * *."

Citation of authority is hardly necessary to demonstrate that attorneys' fees and other damages may be recovered where a preliminary injunction or a TRO has been dissolved "before the case is disposed of on the merits," precisely as in the instant case. (See Meyer v. Marshall (1976), 62 Ill.2d 435, 439, 343 N.E.2d 479 and authorities there cited.) Also, as well pointed out in Bohn Aluminum & Brass Co. v. Barker (1973), 55 Ill.2d 177, 179, 303 N.E.2d 1:

"For many years trial courts in this State have entertained applications for preliminary injunctions, referring to them, interchangeably, as preliminary injunctions, temporary injunctions, interlocutory injunctions, restraining orders, and interlocutory orders. (Citations.)"

The word "damages" in the above cited statute has thus been authoritatively and finally construed as including attorneys' fees as well as other damages.

Counsel for plaintiff have raised every conceivable argument to avoid the clear language of the statute and the pertinent cases. Counsel for plaintiff repeatedly describe the TRO as a "status quo order." In this case, the TRO was originally entered for the 10 day period specified in the statute (Ill.Rev.Stat.1979, ch. 69, par. 3-1). It then became apparent to the trial court and all counsel, during the lengthy hearings, that complicated facts would necessarily have to be resolved by the trial court in ruling upon the legal validity of the TRO and the propriety of entering a preliminary injunction.

The pertinent statute was intended to cover exactly such a situation. It provides for the TRO to be entered for a maximum of 10 days "unless the party against whom the order is directed consents that it may be extended for a longer period." (Ill.Rev.Stat.1979, ch. 69, par. 3-1.) In the case before us this result was accomplished by the order of September 19, 1977, which provided for a continuation of the TRO pending a ruling on plaintiff's motion for preliminary injunction.

Thus, it appears to us description of the TRO as a status quo order is irrelevant. We are dealing here with serious restraint of defendants accomplished by a TRO which, under the pertinent statute, was to remain in effect pending disposition of the hearing on a preliminary injunction. By the entry of this order the trial court and all parties recognized the obvious fact that the continuation of the TRO depended upon the identical legal and factual issues as governed the possible entry of a preliminary injunction. It is impossible here to segregate completely the legal services rendered in dissolving the TRO from those rendered in obtaining denial of a preliminary injunction.

We accordingly reject the argument of plaintiff that the attorneys' fees and expenses incurred by defendants and by S & S did not result from the restraint applied by the TRO. On the contrary, it is manifest that serious restraint was first imposed against these parties and then dissolved after protracted hearings. Thus, they are entitled to reasonable damages which includes allowance of attorneys' fees.

Similarly, plaintiff urges that the injunctional order was not wrongfully entered as required by the statute. On the contrary, the above quoted statute provides for damages where a temporary restraining order is dissolved by the trial court. The trial court order of September 19, 1977, not only denied the preliminary injunction but also provided that the TRO against defendants and S & S "is hereby dissolved." This dissolution of the TRO thus adjudicated that it was wrongfully issued. Meyer, 62 Ill.2d 435, 439, 343 N.E.2d 479.

We will add it is manifest the damages were allowed by the trial court before determination of the case on its merits. In fact, the trial judge refused to allow discovery until completion of the matter of issuance of the preliminary injunction and dissolution of the TRO. Plaintiff expressly reserved the right to litigate the merits of the case in chief pending outcome of the ruling on the injunctive relief.

Plaintiff takes the position that the attorneys' fees incurred by defendants and S & S were not related to the TRO. On the contrary, as above shown, the dissolution of the TRO and the denial of a preliminary injunction are indivisible portions of one unit. The initial and governing issue in this entire record is whether plaintiff established "the distinctive and secret nature of its manufacturing processes * * * " (Stocker Hinge, 61 Ill.App.3d 636, 643, 18 Ill.Dec. 489, 377 N.E.2d 1125). If plaintiff had no trade secret, the TRO was improvidently entered and the preliminary injunction was properly denied. On the contrary, if plaintiff had a secret and distinctive process, it would necessarily follow that the TRO should not have been dissolved and a preliminary injunction should have been entered. These matters are coextensive and inseparable.

In this regard, plaintiff contends the record demonstrates "if not all, then more than 99% of the attorneys (sic) time was spent only defending the motion for preliminary injunction * * *." Plaintiff offered no evidence to sustain this untenable contention. As will later be shown, defendants and S & S were the only parties who offered proof on the amount of attorneys' fees.

Plaintiff also urges no attorneys' fees may be recovered because defendants and S & S never filed a formal motion to dissolve the TRO. The pertinent statute above quoted contains no requirement of a formal motion to dissolve the TRO as a condition precedent to allowance of damages. On the contrary, the statute requires dissolution of the TRO as the only prerequisite to allowance of damages....