Whiteco Industries, Inc. v. Nickolick

• Decision Date: 07 February 1990
• Docket Number: No. 82A04-8907-CV-284,82A04-8907-CV-284
• Citation: 549 N.E.2d 396
• Parties: WHITECO INDUSTRIES, INC., Appellant (Defendant Below), v. Joe J. NICKOLICK and Mary A. Nickolick, Appellees (Plaintiffs Below).
• Court: Indiana Appellate Court

Page 396

549 N.E.2d 396

WHITECO INDUSTRIES, INC., Appellant (Defendant Below), v. Joe J. NICKOLICK and Mary A. Nickolick, Appellees (Plaintiffs Below).

No. 82A04-8907-CV-284.

Court of Appeals of Indiana Fourth District.

Feb. 7, 1990.

Fred M. Cuppy, Kathryn D. Schmidt, Burke, Murphy, Costanza & Cuppy, Merrillville, for appellant.

F. Wesley Bowers, David V. Miller, R. Jeff Dodson, Bowers, Harrison, Kent & Miller, Evansville, for appellees.

CONOVER, Judge.

Defendant-Appellant Whiteco Industries, Inc. takes this interlocutory appeal under Ind. Appellate Rule 4(B)(3) from the entry of a preliminary injunction in favor of Plaintiffs-Appellees Joe A. and Mary A. Nickolick which prevents Whiteco from exercising an option to purchase a Ramada Inn in Vanderburgh County.

This appeal presents the following issues:

Whether the trial court erred

1. by granting a preliminary injunction without entering findings of fact and conclusions of law as required by Ind. Trial Rules 52(A) and 65(D),

2. by failing to consider the issue of a security deposit therefor, as required by the Indiana Trial Rules, and

3. by granting the preliminary injunction when the evidence was insufficient to warrant such action.

The Nickolicks are sublessors of land in Vanderburgh County upon which sits a Ramada Inn, Whiteco is their sublessee. It operates the Inn under a sublease between them. The sublease grants Whiteco an option to purchase the Inn after the eleventh lease year "upon a default by Tenant [Whiteco] and upon the requisite notice having been given to Tenant[.]" (R. 124) The sublease has been in existence for more than eleven years.

Whiteco failed to make the fixed rental payment due the Nickolicks on May 1, 1989, which constitutes a default of Tenant under Section 18.0(g) of the contract. (R. 121) Otherwise, there have been no other tenant defaults. On May 9, 1989, the Nickolicks notified Whiteco, by an Express Mail letter "the rental has not been paid" and further asked it to "do whatever was necessary to cause payment to be made as promptly as possible." (R. 149) Considering the Nickolicks' letter written notice of the default, as required by the option provisions, Whiteco determined to exercise its option and notified the Nickolicks by certified mail it had appointed an appraiser under Section 18.8 of the contract.

The Nickolicks filed suit two days after receiving Whiteco's certified letter for unpaid rent, attorneys fees, declaratory judgment, and a preliminary injunction to maintain the status quo until the cause could be heard on the merits. After hearing, the trial court entered a preliminary injunction without entering findings of fact and conclusions of law, as required by T.R. 52(A) and 65(D).

Whiteco appeals.

I

The trial court's failure to enter findings of fact and conclusions of law is error. Teperich v. North Judson-San Pierre H.S. Building Corp. (1971), 257 Ind. 516, 275 N.E.2d 814, 817, cert. denied, 407 U.S. 921, 92 S.Ct. 2462, 32 L.Ed.2d 806. The only question is whether it is reversible error, i.e., was it harmful or prejudicial to appellant? Teperich, 275 N.E.2d at 817.

Whiteco argues the trial court's failure in this regard constitutes reversible error. Without the entry of findings of fact and conclusions of law by the trial court, Whiteco is denied a full and comprehensive review of the issues it raises on appeal, it asserts. To the contrary, the Nickolicks contend the error is harmless because this court has before it all it needs to afford appellant a full review of the proceedings below, namely, all the facts stipulated by the parties, and all the joint exhibits admitted below. Remand for findings of fact and conclusions of law would not promote "judicial economy" they suggest. We disagree with the Nickolicks.

The granting of a preliminary injunction rests in the sound discretion of the trial court. The exercise thereof will not be interfered with unless it is shown such action is arbitrary or constitutes a clear abuse of discretion. Rosenburg v. Village Shopping Center, Inc. (1968), 251 Ind. 1, 238 N.E.2d 642, 650; Ind. State Dept. of Welfare v. Stagner (1980), Ind.App., 410 N.E.2d 1348, 1353. Stagner discussed the measure by which the trial court's action in granting or denying a preliminary injunction is judged on appeal. There it was said:

Discretion to grant or deny preliminary injunction relief is measured by several factors: (1) whether the plaintiff's remedies at law are inadequate thus causing irreparable harm pending the resolution of the substantive action if the injunction does not issue; (2) whether the plaintiff has demonstrated at least a reasonable likelihood of success at trial by establishing a prima facie case; (3) whether the threatened injury to the plaintiff outweighs the threatened harm the grant of the injunction may inflict on the defendant; (4) whether, by the grant of the preliminary injunction, the public interest would be disserved. (Citing cases.)

Stagner, 410 N.E.2d at 1353. If the trial court reasonably finds the affirmative as to the first three and the negative as to the last of these criteria, the trial court's grant of preliminary injunction constitutes a reasonable exercise of discretion and will be affirmed on appeal. However, if the plaintiff fails to prove any one or more of those requirements, the trial court's grant thereof is an abuse of discretion requiring reversal.

Admitting, in effect, the trial court's failure to enter findings of fact and conclusions of law in this situation was error, the Nickolicks argue there is enough stipulated evidence in this record for us to review this case on its merits, and "judicial economy" dictates we do so. We disagree. The trial court's failure to enter findings of fact and conclusions of law in this case requires reversal.

The term "judicial economy" means the efficient and concise use of judicial time and effort in the administration of justice. As applied to cases involving the mandatory provisions of T.R.'s 52 and 65, and others requiring entry by trial courts of written findings of fact and conclusions of law, the term includes the time and effort expended by both the trial and appellate courts as an integrated whole, not the time and effort of one class of court alone. Each has its own duties and authority which, when exercised as provided by law, statute, and the rules of procedure combine to produce as thorough and expeditious an administration of justice as is consistent with the system of government we have adopted as a people.

There can be no doubt as to the division of responsibility and authority between trial and appellate courts. The trial courts of this state exclusively hear and weigh the evidence and inferences arising therefrom, and assess the credibility of witnesses, to determine the facts prior to entering judgment or taking other action. Courts of appeal have no such authority. We merely review questions of law and the overall sufficiency of the evidence as a matter of law. In that context, it is clear our supreme court made compliance with T.R.'s 52(A) and 65(D) mandatory to promote judicial economy and to further the interests of justice where delicate and intricate factual questions such as whether or not a preliminary injunction should issue in a given case is involved.

While it is true as the Nickolicks suggest, the courts on appeal have reviewed the merits in cases such as Teperich, supra; Hatcher v. Graddick (1987), Ind.App., 509 N.E.2d 258; and Sanders v. Sanders (1983), Ind.App., 452 N.E.2d 1057, without the...