Wichita Wire, Inc. v. Lenox
| Decision Date | 09 October 1986 |
| Docket Number | No. 58372,58372 |
| Citation | 11 Kan.App.2d 459,726 P.2d 287 |
| Parties | WICHITA WIRE, INC., and Plaza Towel Holder Co., Inc., Appellees. v. Arlene LENOX and Lenox Manufacturing, Inc., Appellants. |
| Court | Kansas Court of Appeals |
Syllabus by the Court
1. An injunction is an equitable remedy and its grant or denial in each case is governed by principles of equity.
2. The purpose of a temporary or preliminary injunction is not to determine any controverted right but to prevent injury to a claimed right pending a final determination of the controversy on its merits. The grant of a temporary injunction would not be proper if it would appear to accomplish the whole object of the suit without bringing the cause or claim to trial. A temporary injunction merely preserves the status quo until a final determination of a controversy can be made.
3. A trial court's decision to grant or deny an injunction is discretionary and will not be disturbed on appeal absent a showing of an abuse of discretion.
4. The burden is on an appellant to show that the trial court abused its discretion by issuing the temporary injunction.
5. Before granting a temporary or preliminary injunction, the trial court must find that the movant has satisfied four prerequisites: (1) substantial likelihood that the movant will eventually prevail on the merits; (2) a showing that the movant will suffer irreparable injury unless the injunction issues; (3) proof that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing parties; and (4) a showing that the injunction, if issued, would not be adverse to the public interest.
6. It is only necessary that plaintiffs establish a reasonable probability of success, and not an overwhelming likelihood of success, in order for a preliminary injunction to issue.
7. Goodwill passes by implication in the sale of a business.
8. Goodwill is property and can be damaged.
9. A temporary injunction cannot be used to remedy past injury.
10. Where there is a full, complete, and adequate remedy at law through recovery of calculable money damages, the injury is not irreparable and equity will not apply the extraordinary remedy of injunction.
11. An injunction should be no broader than the occasion shown requires.
F.C. (Rick) Davis, II, of Bruce & Davis, of Wichita, for appellants.
Gary L. Ayers and Roberta R. Johnson, of Foulston, Siefkin, Powers & Eberhardt, of Wichita, for appellees.
Before BRISCOE, P.J., and JANICE D. RUSSELL, and JEAN F. SHEPHERD, Associate District Judges, assigned.
Wichita Wire, Inc., doing business as Plaza Towel Holder Company (Plaza), filed suit against Arlene Lenox and her company Lenox Manufacturing for "Breach of Contract," "Breach of Duty of Good Faith and Fair Dealing." "Interference with Prospective Business Advantage," and "Unfair Competition." As part of its requested relief, Plaza sought and was granted a temporary injunction of six months' duration against Arlene Lenox and Lenox Manufacturing. Arlene Lenox and Lenox Manufacturing appeal after first obtaining a stay of the injunction.
The sole issue raised by this appeal is whether the trial court erred in issuing the temporary injunction.
Plaza was originally a family owned and operated corporation founded by Arlene Lenox's father in the 1950's. Plaza manufactured and sold towel holders, coat racks, and other items used in the hotel industry. When Wichita Wire purchased Plaza in November 1984, there were four shareholders, each holding 25 percent of Plaza's shares. Each 25 percent interest was purchased for $90,000 for a total purchase price of $360,000.
According to the purchase agreement, each shareholder agreed to consult and advise Wichita Wire during a six-month transition period. Since Plaza's day-to-day activity had been conducted by its shareholders, Wichita Wire also requested each shareholder to sign a noncompetition agreement in exchange for an additional $10,000. Only Arlene Lenox refused to sign the noncompetition agreement.
Shortly after the sale of Plaza, Arlene Lenox formed Lenox Manufacturing and began to produce a line of products competitive with those produced by Plaza. Arlene Lenox, on behalf of Lenox Manufacturing, solicited business from her former Plaza customers. In December 1984, Plaza's largest customer for a number of years, American Hotel, started doing business with Lenox instead of Plaza. Plaza then filed suit against Arlene Lenox and Lenox Manufacturing. In its petition, Plaza alleged Arlene Lenox had breached the sales contract, breached her duty of good faith, engaged in unfair competition, and interfered with Plaza's prospective business advantage. Plaza requested a permanent injunction and monetary relief, and also moved for a temporary injunction against Arlene Lenox and Lenox Manufacturing until the controversy could be resolved.
A hearing was conducted pursuant to Plaza's motion for a temporary injunction and evidence was presented. At the close of the evidence, the trial court entered a temporary injunction against Arlene Lenox and Lenox Manufacturing which enjoined both from engaging in any business competitive with Plaza for a period of six months. The scope of the temporary injunction is specifically set forth in paragraph 18 of the trial court's order:
"The Court therefore finds and holds that from April 25, 1985, until October 25, 1985, a period of six months, defendants Arlene Lenox and Lenox Manufacturing, Inc., are temporarily enjoined from directly or indirectly competing with Plaza Towel Holder Company, Inc., in the lodging industry by acting as an employee, consultant, owner, partner, or stockholder for any competitor in the manufacture, distribution, or sale of towel and coat holders and racks, robe hooks, towel rings, hat racks or shelves, and or coat or hat hanger bars."
An injunction is an equitable remedy and its grant or denial in each case is governed by principles of equity. U.S.D. No. 503 v. McKinney, 236 Kan. 224, Syl. p 1, 689 P.2d 860 (1984). The purpose of a temporary or preliminary injunction is not to determine any controverted right, but to prevent injury to a claimed right pending a final determination of the controversy on its merits. The grant of a temporary injunction would not be proper if it would appear to accomplish the whole object of the suit without bringing the cause or claim to trial. A temporary injunction merely preserves the status quo until a final determination of a controversy can be made. Comanche County Hospital v. Blue Cross of Kansas, Inc., 228 Kan. 364, 366, 613 P.2d 950 (1980); Evco Distributing, Inc. v. Brandau, 6 Kan.App.2d 53, 56, 626 P.2d 1192, rev. denied 230 Kan. 817 (1981).
A trial court's decision to grant or deny an injunction is discretionary and will not be disturbed on appeal absent a showing of an abuse of discretion. Huser v. Duck Creek Watershed Dist. No. 59, 234 Kan. 1, 5, 668 P.2d 172 (1983). The burden is on an appellant to show that the trial court abused its discretion by issuing the temporary injunction. Comanche County Hospital v. Blue Cross of Kansas, Inc., 228 Kan. at 367, 613 P.2d 950.
At the trial level, the burden of proof in an injunction action is upon the movant. U.S.D. No. 503 v. McKinney, 236 Kan. at 227, 689 P.2d 860. In defining this burden, it has been generally held that the movant must establish a prima facie case showing a reasonable probability that he will ultimately be entitled to the relief sought. The movant has the additional burden of showing a right to the specific injunctive relief sought because irreparable injury will result if the injunction is not granted. There must be a probable right and a probable danger. Crowther v. Seaborg, 415 F.2d 437, 439 (10th Cir.1969). This test has often been expanded into four prerequisites which the moving party seeking a temporary or preliminary injunction must establish:
"(1) substantial likelihood that the movant will eventually prevail on the merits; (2) a showing that the movant will suffer irreparable injury unless the injunction issues; (3) proof that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing parties; and (4) a showing that the injunction, if issued, would not be adverse to the public interest." Lundgrin v. Claytor, 619 F.2d 61, 63 (10th Cir.1980); Uarco Inc. v. Eastland, 584 F.Supp. 1259, 1261 (D.Kan.1984).
While this four-factor analysis has never been expressly applied by Kansas state courts, it appears an appropriate standard. Kansas injunction cases have, in fact, never discussed in detail the standards for analyzing an injunction, although reference is frequently made to the prerequisite of irreparable injury. U.S.D. No. 503 v. McKinney, 236 Kan. at 227, 689 P.2d 860; Concerned Citizens, United, Inc. v. Kansas Power & Light Co., 215 Kan. 218, 242-43, 523 P.2d 755 (1974), and cases cited therein. The four-factor analysis is well established in the federal courts (Lundgrin v. Claytor, 619 F.2d 61; Wagner Elec. Corp. v. Thomas, 612 F.Supp. 736, 741 [D.Kan.1985]; 7 Moore's Federal Practice § 65.04 [1986]; 11 Wright & Miller, Federal Practice and Procedure: Civil § 2948 [1973]; 42 Am.Jur.2d, Injunctions § 285) and was used by the trial court in the present case.
Substantial likelihood of prevailing
First, Plaza presented evidence that Arlene Lenox failed to fulfill her obligations under the purchase agreement. She agreed under the purchase agreement to advise and consult with Plaza's new owners during a six-month transition period. During this period, Plaza requested Arlene Lenox to help them regain American Hotel as a customer. She could offer no assistance in this regard since American Hotel had ceased doing business with Plaza in order to do business with Lenox Manufacturing.
Second, Plaza also presented persuasive evidence that Arlene Lenox...
To continue reading
Request your trial
-
Wichita Clinic v. Columbia/Hca Healthcare Corp.
...20 Kan.App.2d 123, 884 P.2d 443 (1994); Harp v. Appliance Mart, Inc., 16 Kan.App.2d 696, 827 P.2d 1209 (1992); Wichita Wire v. Lenox, 11 Kan.App.2d 459, 726 P.2d 287 (1986). 22. This provision of the Restatement (1) One who intentionally causes a third person not to enter into a prospective......
-
State Bd. of Nursing v. Ruebke
...only for an abuse of discretion. See U.S.D. No. 503 v. McKinney, 236 Kan. 224, 226-27, 689 P.2d 860 (1984); Wichita Wire, Inc. v. Lenox, 11 Kan.App.2d 459, 462, 726 P.2d 287 (1986). We decline to adopt Ruebke's proposed scope of review. In cases in which a trial court's decision regarding a......
-
Women's Health Care Services v. Operation Rescue
...law. Comanche County Hospital v. Blue Cross of Kansas, Inc., 228 Kan. 364, 366, 613 P.2d 950 (1980). See Wichita Wire, Inc. v. Lenox, 11 Kan.App.2d 459, 461, 726 P.2d 287 (1986) (finding federal four-factor test appropriate under Kansas The purpose of Operation Rescue's mission in Wichita i......
-
State v. United States
...injunction “merely preserves the status quo until a final determination of a controversy can be made.” Wichita Wire, Inc. v. Lenox , 11 Kan.App.2d 459, 726 P.2d 287, 290 (1986). And whether to grant a preliminary injunction rests within the Court's sound discretion. Beltronics USA, Inc. v. ......
-
Kansas Noncompete Agreements — an Updated Overview
...can be shown through a "loss of customers, loss of goodwill, and threats to a business' viability"). [59] Wichita Wire Inc. v. Lenox, 11 Kan. App. 2d 459, 464-65, 726 P.2d 287, 291-92 (1986). [60] 259 Kan. at 459, 475-77, 913 P.2d at 87, 96-97. [61] 275 Kan. 20, 59 P.3d 1003 (2002) [62] 275......
-
Unwanted Speech and the State's Interest in Protecting Religious Free Exercise: Drawing First Amendment Lines in Olmer v. City of Lincoln
...at 826-27. 376. Id. at 829. 377. Id. at 833. 378. Id. 379. Id. at 827. 380. Id. at 829. 381. Id. (quoting Wichita Wire, Inc. v. Lenox, 726 P.2d 287, 292 (Kan. Ct. App. 1986)). 382. Id. at 829. 383. Id. at 829-32. The test used by the court was from Madsen. Id. at 829 (quoting Madsen, 512 U.......
-
Unwanted Speech and the State's Interest in Protecting Religious Free Exercise: Drawing First Amendment Lines in Olmer v. City of Lincoln
...at 826-27. 376. Id. at 829. 377. Id. at 833. 378. Id. 379. Id. at 827. 380. Id. at 829. 381. Id. (quoting Wichita Wire, Inc. v. Lenox, 726 P.2d 287, 292 (Kan. Ct. App. 1986)). 382. Id. at 829. 383. Id. at 829-32. The test used by the court was from Madsen. Id. at 829 (quoting Madsen, 512 U.......
-
Covenants Not to Compete a Kansas Law Overview
...69 Kan. 284, 76 P. 834 (1904). [FN113]. Id. at 834-35. [FN114]. Id. at 835. [FN115]. Id. [FN116]. E.g., Wichita Wire, Inc. v. Lenox, 11 Kan.App.2d 459, 726 P.2d 287, 290 (1986); Heatron, 898 F. Supp. at 1498; Uarco, 584 F. Supp. at 1261. [FN117]. 913 F. Supp. 1495 (D. Kan. 1996) (Van Bebber......