Opinion
No. 2 CA-CV 2018-0147
04-05-2019
INTERNATIONAL GREENHOUSE PRODUCE, S.A. DE C.V., Plaintiff/Appellee, v. APACHE PRODUCE IMPORTS, LLC, AN ARIZONA LIMITED LIABILITY COMPANY, Defendant/Appellant.
COUNSEL Squire Patton Boggs LLP, Phoenix By Brian A. Cabianca, Kerryn L. Holman, and Gregory T. Saetrum Counsel for Plaintiff/Appellee Bowman and Brooke LLP, Phoenix By William F. Auther, Travis M. Wheeler, and Cameron A. Arthur Counsel for Defendant/Appellant
THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
NOT FOR PUBLICATION
See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f). Appeal from the Superior Court in Santa Cruz County
No. CV1700072
The Honorable Denneen L. Peterson, Judge Pro Tempore
VACATED IN PART AND REMANDED
COUNSEL Squire Patton Boggs LLP, Phoenix
By Brian A. Cabianca, Kerryn L. Holman, and Gregory T. Saetrum
Counsel for Plaintiff/Appellee Bowman and Brooke LLP, Phoenix
By William F. Auther, Travis M. Wheeler, and Cameron A. Arthur
Counsel for Defendant/Appellant
MEMORANDUM DECISION
Presiding Judge Eppich authored the decision of the Court, in which Chief Judge Eckerstrom and Judge Vásquez concurred. EPPICH, Presiding Judge:
¶1 In this contract dispute between Apache Produce Imports LLC ("Apache") and International Greenhouse Produce S.A. de C.V. ("IGP"), Apache appeals from the trial court's order denying a preliminary injunction and declining to vacate a previously imposed stay. For the reasons that follow, we vacate the portions of the court's ruling denying preliminary injunctive relief and remand for further proceedings.
Factual and Procedural Background
¶2 "We view the facts in the light most favorable to upholding the trial court's ruling." IB Prop. Holdings, LLC v. Rancho Del Mar Apartments Ltd. P'ship, 228 Ariz. 61, ¶ 2 (App. 2011). IGP is a Mexican corporation that grows and markets produce, and Apache, an Arizona limited liability company, is a produce distributor. In 2008, IGP and Apache entered into a contract designating Apache as IGP's produce distributor for ten years. A five-year extension of that agreement was executed in 2016, but the validity of the extension remains in dispute as the subject of ongoing litigation in Mexico related to IGP's corporate governance.
¶3 In 2017, IGP filed a lawsuit in superior court seeking a declaration that the five-year extension was "invalid and of no legal effect." Apache filed a counterclaim, also seeking declaratory relief as to the validity of the extension. IGP subsequently filed a motion for stay of the proceedings pending the outcome of litigation in Mexico, contending those proceedings would affect the validity of the extension. Over Apache's objection, the trial court granted the stay. Two weeks later, Apache filed a motion seeking to vacate the stay and requesting, among other things, a preliminary injunction requiring IGP to abide by the terms of the extension pending resolution of the Mexico proceedings. After a hearing, the court denied the motion. Apache appealed.
Scope of Review
¶4 On appeal, Apache contends "[t]he trial court erred when it refused to lift the stay as to Apache and rule on the validity of the 2016 extension," and denied its request for a preliminary injunction. It contends this court has jurisdiction to consider both portions of the trial court's ruling pursuant to A.R.S. § 12-2101(A)(3) and (A)(5)(b). But, "we have an independent obligation in every appeal to ensure we have jurisdiction, and we must dismiss an appeal over which we lack jurisdiction." Robinson v. Kay, 225 Ariz. 191, ¶ 4 (App. 2010) (citation omitted). Therefore, we first consider whether we have jurisdiction to review the court's denial of Apache's request to vacate the stay and the court's denial of Apache's request for injunctive relief pursuant to § 12-2101.
¶5 Section 12-2101(A)(3) provides for appellate jurisdiction "[f]rom any order affecting a substantial right made in any action when the order in effect determines the action and prevents judgment from which an appeal might be taken." Section 12-2101(A)(5)(b) provides for appeals from an order "[g]ranting or dissolving an injunction, or refusing to grant or dissolve an injunction or appointing a receiver."
¶6 The trial court's refusal to lift the stay does not fall within the language of § 12-2101(A)(3). A stay of proceedings is, by its very nature, temporary; it places the proceedings on hold until some other event occurs. See generally, e.g., Ariz. R. Civ. P. 62. We see nothing in the nature of a stay that would prevent the entry of final judgment. We therefore conclude § 12-2101(A)(3) does not provide us with jurisdiction to consider that portion of the court's order refusing Apache's request to vacate the stay.
¶7 Similarly, we are unpersuaded a stay can be fairly characterized as an injunction within the meaning of § 12-2101(A)(5)(b). See Injunction, Black's Law Dictionary (10th ed. 2014) ("A court order commanding or preventing an action.") (citing 1 Howard C. Joyce, A Treatise on the Law Relating to Injunctions § 1, 2-3 (1909) ("[I]n its accepted legal sense, an injunction is a judicial process or mandate operating in personam by which, upon certain established principles of equity, a party is required to do or refrain from doing a particular thing.")). A stay does not command or prevent an action by either party; as noted above, it procedurally and temporarily precludes further litigation in a particular case. Indeed, review of a stay appears to be best suited for special-action review—review Apache has already sought and we have already declined to exercise. See Apache Produce Imports v. Int'l Greenhouse Produce, S.A. de C.V., No. 2 CA-SA 2018-0071 (Ariz. App. Oct. 29, 2018) (order); see also Astorga v. Wing, 211 Ariz. 139, ¶ 14 (App. 2005) (special-action review of denial of motion to stay).
¶8 In contrast, the portion of the trial court's order denying Apache's request for preliminary injunctive relief falls within the plain language of § 12-2101(A)(5)(b). And Apache filed a timely notice of appeal from that ruling, providing us with jurisdiction to consider it. We therefore limit our review to the court's refusal to grant Apache's request for a preliminary injunction.
Preliminary Injunctive Relief
¶9 We review a trial court's decision to grant or deny a preliminary injunction for an abuse discretion, and we will accept the court's factual findings unless they are clearly erroneous. See Valley Med. Specialists v. Farber, 194 Ariz. 363, ¶ 9 (1999). "An abuse of discretion exists if the superior court applied the incorrect substantive law or preliminary injunction standard, based its decision on an erroneous material finding of fact, or applied the appropriate preliminary injunction standard in a manner resulting in an abuse of discretion." TP Racing, L.L.L.P. v. Simms, 232 Ariz. 489, ¶ 8 (App. 2013). This court has previously concluded:
The party seeking a preliminary injunction is obligated to establish four traditional equitable criteria:Shoen v. Shoen, 167 Ariz. 58, 63 (1990).
1) A strong likelihood that he will succeed at trial on the merits;
2) The possibility of irreparable injury to him not remediable by damages if the requested relief is not granted;
3) A balance of hardships favors himself; and
4) Public policy favors the injunction.
¶10 The trial court denied Apache's request for preliminary injunctive relief in the same under-advisement ruling in which it denied Apache's request to lift the stay. The bulk of that ruling is devoted to the court's recitation of the procedural history of this case, the positions of the parties, and the court's analysis of Apache's stay request. In the brief portion of the court's ruling addressing Apache's request for preliminary injunctive relief, however, the court stated: "For the reasons set forth above, including the potential for inconsistent results, Defendant Apache's requested alternative relief of a temporary restraining order, preliminary injunction and evidentiary hearing is DENIED."
¶11 By explicitly relying on its desire to avoid "the potential for inconsistent results," it appears as though the trial court conflated the analyses of abstention and preliminary injunctive relief. See Tonnemacher v. Touche Ross & Co., 186 Ariz. 125, 130 (App. 1996) (when considering whether to grant stay, court should consider interest in "avoiding piecemeal litigation"); see also Montanore Mineral Corp. v. Bakie, 867 F.3d 1160, 1167 (9th Cir. 2017) ("Piecemeal litigation occurs when different tribunals consider the same issue, thereby duplicating efforts and possibly reaching different results." (quoting Am. Int'l Underwriters (Phil.), Inc. v. Cont'l Ins., 843 F.2d 1253, 1258 (9th Cir. 1988))). In addition to relying on abstention principles, the court's ruling does not analyze any of the Shoen factors. See 167 Ariz. at 63. We thus conclude the court abused its discretion by applying an incorrect preliminary injunction standard, and vacate the portion of its ruling denying preliminary injunctive relief. On remand, we direct the court to consider the factors enumerated in Shoen to determine whether preliminary injunctive relief is appropriate.
In light of our decision, we need not address whether the trial court "utterly ignored" the merits of Apache's request for a preliminary injunction. Nor must we consider whether the court failed to make findings of fact and conclusions of law to support its ruling. See Ariz. R. Civ. P. 52.
Disposition
¶12 Both parties request attorney fees and costs incurred on appeal. See A.R.S. §§ 12-341, 12-341.01, 12-342. Section 12-341.01 allows the court discretion to award attorney fees to the successful party in an action arising out of contract. Because we vacate the trial court's ruling to afford the court an opportunity to consider the request for a preliminary injunction under the correct legal standard, rather than on the merits, in our discretion we decline to award attorney fees to either party, without prejudice to the parties seeking an award of fees in the trial court on remand. As to costs, because we have granted relief as to the preliminary injunction, but not the issue of the stay, both parties arguably have prevailed in part. We therefore deny their requests for costs. See Bennett Blum, M.D., Inc. v. Cowan, 235 Ariz. 204, ¶ 22 (App. 2014). We vacate the trial court's order denying preliminary injunctive relief, and remand with instructions for the court to enter further findings consistent with this decision and as required by Rule 52, Ariz. R. Civ. P.
Apache also requests attorney fees and costs based on the distribution agreement and the disputed five-year extension, but they do not develop any argument as to why those agreements entitle them to such an award. See Sholes v. Fernando, 228 Ariz. 455, ¶ 16 (App. 2011) (failure to develop and support argument waives issue on appeal). In any event, as discussed above, both parties partially prevail in this appeal. --------