129 So. 3d 272
Ala.2013Background
- King Metal sued Marathon and OAX for breach of contract, implied covenant, unjust enrichment, interference with contractual relations, and fiduciary duty in connection with the Delphi Project.
- King Metal sought prejudgment attachment and a preliminary injunction to freeze net profits and identify funds related to the Delphi Project.
- The trial court issued an August 23, 2012 writ of seizure; the court later set it aside and entered an October 2, 2012 order enjoining disbursement of net profits.
- King Metal sought further relief on November 28, 2012 to enjoin sale/transfer/encumbrance of the Delphi site, which the court granted that day.
- King Metal challenged the November 28 order as a new injunction; Marathon and OAX argued it violated Rule 65 and required a hearing, bond, and specific findings.
- On appeal, the Alabama Supreme Court reversed, holding the November 28 order was a new preliminary injunction that violated Rule 65’s requirements, and remanded for dissolution of the injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 65 mandates a hearing for a preliminary injunction | King Metal contends no hearing was needed due to agreement on October 2 order. | Marathon and OAX contend no hearing violated Rule 65(a)(1). | Yes; Rule 65(a)(1) requires notice and a hearing. |
| Whether security bond was required for the injunction | King Metal argues exceptions apply or bond not required by earlier order. | Defendants argue Rule 65(c) requires a security bond absent specific exceptions. | Yes; security bond required and no proper exception found. |
| Whether Rule 65(d)(2) requirements were satisfied | King Metal relied on the November 28 order as enforcement of prior relief. | Defendants argue the order failed to state reasons and describe enjoined acts. | No; order failed to set forth reasons or describe acts to be restrained. |
| Whether the November 28, 2012 order was a new injunction or a clarification/enforcement | King Metal claimed it was enforcement/clarification of October 2 order. | Defendants argued it was a new, broader injunction. | New injunction; broader scope than October 2 order. |
| Whether the trial court abused its discretion by issuing the November 28 order | King Metal sought swift protection of Delphi Site rights. | Defendants contend the court acted within emergency need without full compliance. | Yes; court exceeded discretion by failing Rule 65 requirements. |
Key Cases Cited
- Blount Recycling, LLC v. City of Cullman, 884 So.2d 850 (Ala. 2003) (notice and opportunity to be heard required for preliminary injunction)
- Bamberg v. Bamberg, 441 So.2d 970 (Ala.Civ.App. 1983) (some evidence implicitly required; due process require notice and hearing)
- Anders v. Fowler, 423 So.2d 838 (Ala. 1982) (mandatory bond unless exceptions shown)
- Ex parte Miller, 129 Ala. 130 (1901) (injunctions require bond; longstanding rule cited)
- Chunchula Energy Corp. v. Ciba-Geigy Corp., 503 So.2d 1211 (Ala. 1987) (Rule 65(c) mandatory; bond required absent exceptions)
- Monte Sano Research Corp. v. Kratos Defense & Sec. Solutions, Inc., 99 So.3d 855 (Ala. 2012) (injunctions must state reasons and describe acts restrained)
- D.M.C. Enters., Inc. v. Hope, 100 So.3d 1102 (Ala. Civ. App. 2012) (describes detail required in injunction orders)
- Spinks v. Automation Personnel Services, Inc., 49 So.3d 186 (Ala. 2010) (exceptions to Rule 65(c) and nominal security considerations)
- Holiday Isle, LLC v. Adkins, 12 So.3d 1173 (Ala. 2008) (test for obtaining preliminary injunction and factors)
- Butler v. Roome, 907 So.2d 432 (Ala. 2005) (Rule 65(d) requirements; reasons and specificity)
- Colbert Cnty. Bd. of Educ. v. James, 83 So.3d 473 (Ala. 2011) (standard for preliminary injunction and irreparable harm)