Multiplex, Inc. v. Town of Clay, 749 S.E.2d 621

Background

Multiplex, Inc. and its principals obtained a temporary injunction against the Town of Clay in a construction-contract dispute after the trial court required a $25,000 injunction bond but permitted a 10% cash posting ($2,500) to put the injunction into effect.
The petitioners voluntarily dismissed their complaint (preliminary injunction dismissed with prejudice; other claims without prejudice) before a full merits determination.
The Town moved to forfeit the injunction bond and sought attorneys’ fees and costs incurred while the injunction was in effect; the clerk was ordered to hold the $25,000 bond pending resolution.
A special commissioner reviewed the submissions (the Town initially produced only block summary billings and later provided itemized invoices) and recommended forfeiture of the bond but limited recovery to the bond amount; the commissioner found the suit was not pleaded in bad faith but nonetheless recommended forfeiture.
The circuit court adopted the commissioner’s report, ordered forfeiture of the $25,000 bond to compensate the Town’s attorneys’ fees and costs, and taxed commissioner fees to the petitioners; the petitioners appealed.
The Supreme Court of Appeals affirmed the bond amount and that fees may be recovered under W. Va. Code § 53-5-9, but reversed and remanded because the court below did not hold an evidentiary (Pitrolo) hearing or make findings to determine which fees were attributable solely to dissolving the injunction and whether the fees were reasonable.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Proper amount of injunction bond	Only $2,500 paid should be enforceable	Bond was set at $25,000 by the court; $2,500 was permitted as 10% cash posting	Court: Bond amount is $25,000; 10% cash posting did not reduce the bond penalty
Whether dismissal prevents bond forfeiture / dissolution requirement	Dismissal means injunction not dissolved by court; bond not subject to §53-5-9 forfeiture	Dismissal effectively dissolved the injunction; bond forfeiture statute applies	Court: Voluntary dismissal dissolved injunction by implication; forfeiture statute applies
Necessity of finding bad faith to forfeit bond	Bond cannot be forfeited absent finding of bad faith	Statute does not require bad faith; bond remedy is statutory independent of common-law malice	Court: Bad faith finding not required for statutory bond forfeiture
Recoverability and reasonableness of attorneys’ fees from bond	Fees/costs not recoverable unless fees solely for dissolving injunction; petitioners entitled to contest nature and reasonableness	Town: Fees incurred while injunction in effect are recoverable from bond	Court: Fees may be recoverable under §53-5-9, but trial court erred by not holding a Pitrolo hearing and by failing to determine which fees were incurred solely to dissolve the injunction and whether fees are reasonable; remanded for hearing and findings

Key Cases Cited

Phillips v. Fox, 193 W. Va. 657 (W. Va.) (standard of review for circuit court findings)
Walker v. W. Va. Ethics Comm’n, 201 W. Va. 108 (W. Va.) (abuse of discretion / clearly erroneous review)
Bond v. Bond, 144 W. Va. 478 (W. Va.) (trial court discretion over costs and fees)
State ex rel. Lloyd’s Inc. v. Facemire, 224 W. Va. 558 (W. Va.) (injunction ineffective absent bond)
Atkinson v. Beckett, 36 W. Va. 438 (W. Va.) (inunction dissolution principles)
Bush v. Carden, 111 W. Va. 631 (W. Va.) (limits on recovering fees from injunction bond)
State ex rel. Meadow River Lumber Co. v. Marguerite Coal Co., 104 W. Va. 324 (W. Va.) (fees recoverable only if injunction was sole relief or fees were solely to dissolve injunction)
Aetna Cas. & Sur. Co. v. Pitrolo, 176 W. Va. 190 (W. Va.) (factors for reasonableness of attorneys’ fees)
Horkulic v. Galloway, 222 W. Va. 450 (W. Va.) (Pitrolo factors and requirement for findings)
Corporation of Harpers Ferry v. Taylor, 227 W. Va. 501 (W. Va.) (procedural waiver and evidentiary hearing context)