Opinion
Civ. File No. 03-2655 (PAM/RLE)
April 25, 2003
MEMORANDUM AND ORDER
This matter is before the Court on Defendants Robert and Marian Pappenfus's Motion for a Temporary Restraining Order ("TRO"). All parties were present at the hearing and therefore the Court will consider the Motion as one for a preliminary injunction pursuant to Fed.R.Civ.P. 65. For the reasons that follow, the Motion is denied.
BACKGROUND
The underlying action is an insurance dispute. Several customers contracted E. coli after eating at a China Buffet restaurant in Alexandria, Minnesota. Those customers brought separate lawsuits in various state fora. One of the customers, Defendant Iva Hayes, suffered very serious injuries as a result of the E. coli infection and brought suit in Douglas County. One of the moving parties here, Defendant Robert Pappenfus, also contracted E. coli and sued China Buffet in Douglas County.
Plaintiff Fireman's Fund Insurance Company ("Fireman's Fund") is China Buffet's insurer. Fireman's Fund brought this lawsuit seeking a declaration that the E. coli outbreak at the Alexandria China Buffet constitutes a single occurrence for the purposes of insurance coverage. China Buffet's insurance policy provides a $500,000 limit per occurrence, with a policy maximum of $1 million. Fireman's Fund also seeks to pay $500,000 into the Court and to interplead the various claimants to that money pursuant to Fed.R.Civ.P. 22 and 28 U.S.C. § 1335. According to Fireman's Fund, interpleader is appropriate because, "given the multiplicity of claims and number of claims . . . there may be insufficient insurance proceeds to fully compensate the underlying claimants" and because Fireman's Fund "is uncertain as how to allocate the $500,000 FIREMAN'S FUND policy limit among the underlying claimants" (Compl. ¶ 25, 26).
The policy provides that "occurrence" means, among other things, "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (Compl. ¶ 17.)
On April 18, 2003, Iva Hayes settled her claims against China Buffet. The terms of the settlement are confidential. However, prior to settlement, counsel for China Buffet "indicated" to counsel for Mr. Pappenfus that China Buffet had demanded from Fireman's Fund the full occurrence limit of $500,000. (See Olsen Aff. ¶ 5.) Defendants Robert and Marian Pappenfus brought this Motion seeking to enjoin any payment by Fireman's Fund to Mrs. Hayes, contending that such payment would deplete the insurance fund for the other claimants. They seek to prevent Fireman's Fund from paying the settlement proceeds to Mrs. Hayes until a hearing can be held on the equitable distribution of the $500,000 insurance fund.
DISCUSSION
A. Jurisdiction
The Hayeses argue that this Court does not have jurisdiction to grant the relief requested because jurisdiction is premised on the deposit of funds with the Court. It is true that statutory interpleader requires the deposit of funds. 28 U.S.C. § 1335(a)(2). However, Rule 22 does not contain a similar requirement. Fed.R.Civ.P. 22; see also Bauer v. Uniroyal Tire Co., 630 F.2d 1287, 1291 (8th Cir. 1980). Thus, the Court has the power to grant the relief sought by the Pappenfuses, assuming that they can establish that they are entitled to such relief.
A. Injunctive Relief
An injunction may be granted only if the moving party can demonstrate: (1) a likelihood of success on the merits; (2) that the balance of harms favors the movant; (3) that the public interest favors the movant; and (4) that the movant will suffer irreparable harm absent the restraining order. Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981). Injunctive relief is considered to be a "drastic and extraordinary remedy that is not to be routinely granted." Intel Corp. v. ULSI Sys. Tech., Inc., 995 F.2d 1566, 1568 (Fed. Cir. 1993).
In this case, the Pappenfuses have made no argument regarding any of the Dataphase factors. The harm they allege is that the settlement payment will deplete the entire $500,000 fund. This assumes, of course, that the Court determines that the $500,000 occurrence limit applies, and that Mrs. Hayes' settlement is for the entire $500,000. The Pappenfuses have not argued or attempted to show that, if the settlement constitutes Fireman's Fund's entire obligation to China Buffet, China Buffet does not have sufficient assets to pay the Pappenfuses' claims on its own. Thus, the Pappenfuses have failed to show that they will suffer irreparable harm absent the issuance of the injunction they seek.
Moreover, the balance of harms in this case clearly weighs against the injunction. At this point, it is not clear how much, if any, of the money the Pappenfuses are entitled to receive. Their state-court Complaint demands in excess of $50,000. The injuries Mr. Pappenfus suffered, however, do not appear to be severe. By contrast, the injuries suffered by Mrs. Hayes are very severe. Enjoining the payment to Mrs. Hayes will cause her much more harm than the possibility that any money due Mr. Pappenfus will not be available to him.
CONCLUSION
For the foregoing reasons, and upon all of the files, records, and proceedings herein, IT IS HEREBY ORDERED that Defendants Robert and Marian Pappenfus's Motion for a Temporary Restraining Order/Preliminary Injunction is DENIED.