Grower Service Corp. v. Brown

JUSTICE BARRY, dissenting:

I dissent from the decision of the majority in this cause. In Carriage Way Apartments v. Pojman (1988), 172 Ill. App. 3d 827 , 527 N.E.2d 89 , the court ruled that a preliminary injunction to place the disputed funds in escrow does not change the status quo but rather preserves the status quo as it existed prior to the controversy. The funds are thus protected from dissipation while the dispute is litigated. The same purpose is present here. The defendant Bank has plainly evidenced an intent to apply the disputed funds to the debt owing from Erie Ag to the Bank although Erie Ag deposited the funds in its checking account and drew checks upon it in payment of other debts. The Bank’s refusal to honor Erie Ag’s checks was an attempt to determine the priority of creditors by placing itself ahead of plaintiff. Since the Bank is both a creditor and a depository, it should not be able to control Erie Ag’s funds for its own benefit until the merits of the dispute have been litigated. When a court of equity acts to prevent such an injustice, as the trial court did here, I would affirm.

The majority opinion of this court concludes that plaintiff is seeking money damages and, therefore, has an adequate remedy at law. However, when the debtor is insolvent and has not other assets with which to discharge the obligation involved, the remedy at law will not be adequate. In that situation a preliminary injunction may be issued to prevent irreparable injury. Allstate Amusement Co. of Illinois, Inc. v. Pasinato (1981), 96 Ill. App. 3d 306 , 421 N.E.2d 374 .

To buttress plaintiff’s claim of irreparable harm, one need look no further than the complaint which alleged that two different checks issued in payment of Erie Ag’s debt to plaintiff were returned six different times for insufficient funds after Erie Ag had deposited money in its account in defendant Bank. The complaint also alleged that Erie Ag had no available sources for payment of the claim other than the fund held by the Bank. Testimony was presented in support of the latter allegation that plaintiff knows of no other assets for payment of Erie Ag’s debt. According to the record (R-3 through R-5), defendant’s attorney argued in the trial court that Erie Ag had to have additional money advanced by the Bank in order to continue its business operations. This fact alone would indicate to the trial court that Erie Ag had no other assets. As a final note, at oral argument before this court, it was admitted that Erie Ag filed voluntary bankruptcy in July of 1989. The facts before the trial court were sufficient to support its ruling, and the court did not abuse its discretion in denying the motion to dissolve the preliminary injunction. I would, therefore, affirm the denial of the motion to dissolve.

Nonetheless, I believe defendant is correct in its contention that the injunction was overly broad in that it prevents disbursement of all the proceeds of the sale of equipment and other property of Erie Ag. Plaintiff’s proof in support of its complaint indicated that Erie Ag owed plaintiff $52,000 for chemicals previously supplied and an additional $15,000 interest at the rate of 2% per month as of March 27, 1989. Plaintiff contends on appeal that additional interest and possible punitive damages justify an injunction to preserve the entire fund. On the basis of the record, I can only conclude that the injunction is in fact overly broad in that it purported to maintain a fund far in excess of the amount in controversy.

Plaintiff has filed in the circuit court a motion to amend its complaint to add a count for punitive damages, but that motion has not been heard or allowed. As the pleadings stood at the time the preliminary injunction was granted and as the pleadings stand now, there is no basis for enjoining disbursement of funds in excess of the amount of plaintiff’s claim.

Accordingly, the injunction should be modified to prohibit disbursement of no more than the amount in dispute.