Washel v. Bryant

Decision Date28 June 2002
Docket NumberNo. 53A04-0110-CV-450.,53A04-0110-CV-450.
Citation770 N.E.2d 902
PartiesRebecca WASHEL d/b/a. Hi-Tek Hair Body & Nails, Appellant-Plaintiff, v. Glenda BRYANT, Appellee-Defendant.
CourtIndiana Appellate Court

Thomas A. Berry, Thomas A. Berry & Associates, Bloomington, IN, Attorney for Appellant.

William J. Beggs, Bunger & Robertson, Bloomington, IN, Attorney for Appellee.

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

Rebecca Washel, d/b/a Hi-Tek Hair Body & Nails ("Washel"), sued her former employee, Glenda Bryant, to enforce the terms of a non-competition provision in their employment agreement. Following a hearing, the trial court denied Washel's request for preliminary and permanent injunctive relief. In this interlocutory appeal,1 Washel challenges that decision and raises the following restated issue: whether the trial court erred when it determined that Washel's remedy at law was adequate and denied her request for injunctive relief.

We reverse.

FACTS AND PROCEDURAL HISTORY

Bryant worked as a hair stylist for Washel's beauty salon, Hi-Tek, pursuant to an employment agreement, which provided, in part, that Bryant could not open a competing shop within ten miles for two years from the date she left employment at Hi-Tek. That agreement also contained a liquidated damages clause that subjected the breaching party to $5,000 for every violation of the agreement. Bryant resigned on March 5, 2001, and about a month later she opened a hair salon within approximately three miles of Hi-Tek.

Washel filed a complaint against Bryant, seeking damages along with preliminary and permanent injunctive relief. Following a hearing, the trial court found that the liquidated damages clause provided Washel with an adequate legal remedy and denied Washel's request for injunctive relief. This interlocutory appeal ensued.

DISCUSSION AND DECISION

An injunction is an extraordinary equitable remedy that should be granted with great caution and used only sparingly. F.W. Means & Co. v. Carstens, 428 N.E.2d 251, 260 (Ind.Ct.App.1981). The determination to grant or deny a preliminary injunction rests within the trial court's equitable discretion and that determination will be reversed only upon an abuse of that discretion. Northern Indiana Pub. Service v. Dozier, 674 N.E.2d 977, 989 (Ind.Ct. App.1996).

Discretion to grant or deny an injunction is measured by several factors: (1) whether the plaintiff's remedies at law are inadequate, causing irreparable harm pending resolution of the substantive action; (2) whether the plaintiff has at least a reasonable likelihood of success at trial; (3) whether the plaintiff's threatened injury outweighs the potential harm to the defendant resulting from the granting of the injunction; and (4) whether the public interest will be disserved. Ed Bertholet & Assocs., Inc. v. Stefanko, 690 N.E.2d 361, 363 (Ind.Ct.App.1998).

In determining whether the trial court abused its discretion, we must also look to the trial court's findings of fact and determine whether the findings support the court's decision. McGlothen v. Heritage Envtl. Servs., L.L.C., 705 N.E.2d 1069, 1074 (Ind.Ct.App.1999). We will not set aside the trial court's findings unless they are clearly erroneous. Id. Findings are clearly erroneous when the record lacks any facts or reasonable inferences to support them. Id. We consider the evidence only in the light most favorable to the judgment and construe findings together liberally in favor of the judgment. Barlow v. Sipes, 744 N.E.2d 1, 5 (Ind.Ct. App.2001).

In denying Washel's request for injunctive relief, the trial court entered detailed Findings of Fact and Conclusions of Law. Findings twenty through twenty-two are of particular interest:

20. In paragraph K. of Defendant's Tender of Proposed Findings of Fact, Conclusions of Law and Order, Bryant argues that "Plaintiff's remedies at law in this action are adequate because plaintiff maintains precise records of defendant's production output during the past five (5) years or longer and because the 1996 Contract provides a fixed sum of damages for each violation thereof[;]" this court concurs;
21. Unlike many covenants not to compete, the Employment Agreement in the case at bar also includes an additional provision, a liquidated damages clause; in the case at bar, the parties recognized the difficulty of measuring damages of any breach of confidentiality or competing businesses and mutually agreed that any violation thereof would qualify for liquidated damages, the purpose of which is to address damages which are difficult to estimate or calculate; the parties should benefit from all of their bargained for mutual promises in their Employment Agreement, not just those promises addressing their respective duties of conduct when, in addition, they specifically intended to address the damages of such a breach by including a liquidated damages provision; calculating damages for Bryant's breach of the Employment Agreement is, in fact, difficult to measure; therefore, utilizing the parties' intention to address this difficulty by applying the liquidated damages clause is "plain, complete and efficient to the ends of justice" since the parties anticipated a remedy to address such breaches; while the court understands Washel's desire to terminate Bryant's business within ten miles for two years, to grant a permanent injunction would deprive both Washel and Bryant of the benefit of their negotiated bargain which was contained in their Employment Agreement; a permanent injunction is an extraordinary equitable remedy that is not favored by the law; in fact, the court finds the law in Indiana actually favors a remedy at law, over an equitable injunction, when such a liquidated damages clause is warranted and was bargained for in a valid contract between parties;
22. The court finds that Washel failed to prove that her remedies at law are inadequate given the terms of her contract with Bryant[.]

Washel contends that the trial court erred when it denied her request for injunctive relief. Specifically, Washel asserts that the liquidated damages provision, absent an accompanying injunction, does not provide her with an adequate remedy at law. We must agree.

The parties' agreement contemplates an injunctive remedy when it states, in pertinent part: "Should this [noncompetition] provision be enforced against [Bryant] in any proceeding, the parties to this Agreement agree that no bond shall be posted by [Washel] in order to obtain an injunction order." Appellant's App. at 33. The liquidated damages clause then provides: "The parties agree that because damages for any violation of Provisions 6 and 7 of this Agreement may be difficult to prove, the parties stipulate that any violation of Provision 6 or 7 shall subject the breaching party to liquidated damages of $5,000 for each violation." Id.

The trial court's findings take an either-or approach with respect to legal and equitable relief. That is, the findings suggest that the court must choose between the two remedies as if they were mutually exclusive. The court concluded in its finding twenty-one that "to grant a permanent injunction would deprive both Washel and Bryant of the benefit of their negotiated bargain" for the liquidated damages clause, a legal remedy. We cannot agree. Rather, to disallow injunctive relief would deprive Washel of the benefit of Bryant's covenant not to compete. Nowhere does the agreement state or imply that liquidated damages shall be the exclusive remedy.

In interpreting an unambiguous contract, we give effect to the intentions of the parties as expressed in the four corners of the document. Art Country Squire, L.L.C. v. Inland Mortgage Corp., 745 N.E.2d 885, 889 (Ind.Ct.App.2001). Clear, plain, unambiguous terms are conclusive of that intent. Id. We will neither construe clear and unambiguous provisions nor add provisions not agreed upon by the parties. Id. The meaning of a contract is to be determined from an examination of all of its provisions, not from a consideration of individual words, phrases, or even paragraphs read alone. Id. (emphasis added). In this case, the parties' agreement both provided for liquidated damages and, as we have noted, contemplated an injunction. The trial court concluded that the liquidated damages clause provides Washel with an adequate remedy, but money damages and injunctive relief serve different purposes. The liquidated damage clause was intended to quantify the cost for violations of the agreement after-the-fact, while the injunctive remedy was meant to prevent future violations of the agreement. Thus, we agree with Washel that, "[t]he [liquidated] damage clause was intended to operate in tandem with an injunction not instead of it." Brief of Appellant at 8.

Further, the right to injunctive relief is not contingent upon the text of the agreement. It has long been the law in Indiana that an action seeking an injunction lies in equity and is, therefore, derived from the common law. Central Union Tel. Co. v. State, 110 Ind. 203, 12 N.E. 136, 136 (1887); Sluder v. Mahan, 124 Ind.App. 661, 121 N.E.2d 137, 140 (1954); R.H. Marlin, Inc. v. Indiana Dept. of Revenue, 512 N.E.2d 475 (Ind.Tax 1986); Daugherty v. Allen, 729 N.E.2d 228, 235 (Ind.Ct.App. 2000). It is within the province of our courts, using both common law and chancery jurisdiction, to grant injunctive relief. Central Union Tel. Co., 110 Ind. 203, 12 N.E. at 136. The right to injunctive relief arises in an employment context, as in this case, when the remedy at law is inadequate. The liquidated damages clause in the parties' agreement does not obviate Washel's right to injunctive relief.

We conclude that the trial court's finding that liquidated damages, standing alone, provided Washel with an adequate legal remedy was clearly erroneous. Although mere economic injury generally does not warrant the grant of a preliminary injunction,2 the trial court has a duty to determine whether the...

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