Summary
In Kevin Int'l, "we [found] no evidence that monetary damages will not be paid or that [Respondent] will not readily pay any monetary damages award."
Summary of this case from Malite v. Superior Court of the Commonwealth of the N. Mariana IslandsOpinion
Supreme Court Original Action No. 06-001
March 9, 2006, Decided
ORDER DENYING PETITION FOR EMERGENCY WRIT OF MANDAMUS OR PROHIBITION
Kevin International Corporation petitions this Court to issue a writ of mandamus and/or a writ of prohibition to the Superior Court. We deny the petition.
From the language of the petition, it is unclear what Petitioner is actually requesting. We believe Petitioner wants this Court to order the trial court to grant a preliminary injunction.
I. Facts
On February 10, 2000, Tony C.P. Ng ("Ng"), President of New Saipan Development, Inc., wrote a letter to Jin Sik Lee ("Lee"), General Manager of Hyunjin Saipan, Inc. ("Hyunjin") proposing to finance and build employee barracks in Gualo Rai to house Hyunjin's employees. New Saipan Development Inc. later became Kevin International Corporation ("Kevin"). In return for Kevin's proposal, Hyunjin agreed to lease the Gualo Rai property from Marianas Management Company for the site of the employee barracks as well as pay Kevin $ 80 per person per month. On February 17, 2000, Lee wrote a letter to Ng accepting the proposal.
The period of time the contract covers is in dispute. The letter accepting the proposal refers to a period of "no less than five years." Ng maintains that Lee orally agreed to seven years. This issue has yet to be resolved by the trial court.
Indeed, the existence of the contract is also still in dispute at the trial court level.
Construction of the employee barracks began in early 2001 and was completed in October 2001. Hyunjin moved into the facility in November 2001 and began making monthly payments to Kevin. The monthly rental payments were $ 29,292.00. Hyunjin made timely payments to Kevin from November 2001 until October 2005.
The monthly rent was reduced by $ 5000 to pay back the sum of $ 200,000 that Hyunjin loaned Kevin to initially begin the project.
In November 2005, Hyunjin made an untimely payment to Kevin. Thereafter, they did not pay rent for December 2005, January 2006 and February 2006. The halt in rent payments coincided with an announcement by Hyunjin that they would be shutting down their business operations on Saipan on February 10, 2006.
On January 5, 2006, Kevin filed a complaint against Hyunjin for a temporary restraining order preventing Hyunjin from removing any merchandise or equipment and preventing removal of any property from the Commonwealth; for anticipatory breach of contract; damages for lost rent; attorney's fees, costs and other relief. Kevin also filed an ex parte motion for temporary restraining order. In the complaint, Kevin seeks money damages. The next day, on January 6, the trial court granted Kevin's request for a temporary restraining order, enjoining Hyunjin from removing any personal property from the Gualo Rai factory. On February 9, the trial court heard arguments on whether a preliminary injunction should be issued against Hyunjin for removing the equipment and property out of the Commonwealth. On February 21, the trial court denied the Motion for a Preliminary Injunction.
This petition was filed on February 23, 2006. On that same day, Kevin filed with the trial court a Motion a Stay of the Denial of Preliminary Injunction pending appellate review. Kevin also filed a Motion to Shorten Time for the Motion to Stay the trial court's Denial of the Preliminary Injunction. Finally, Kevin filed an appeal of the Denial with this Court.
The trial court granted Kevin's Motion to Shorten Time to hear the Motion to Stay the Denial of the Preliminary Injunction. The hearing was set for March 1, 2006. The court also set a bench trial for the matter on the same day.
As this Court entertained the current petition, the trial court and the parties went forward with the hearing. On March 1, 2006, the trial court denied Kevin's motion to stay. The trial date was vacated as Kevin filed a new Motion to Disqualify Defendant's Counsel. Thus, the merits of this case have yet to be decided.
On February 28, this Court ordered the a response from the parties involved. A response was filed by Hyunjin on March 3. A reply by Kevin was untimely filed. Finally, on March 7, 2006, Kevin filed a Motion for Emergency Stay Pending Appeal and Final Judgment with this Court.
The untimely Reply will not be considered by this Court.
This Motion shall be dealt with separately. It involves the appeal filed by Kevin rather than the petition for the writ.
II. Jurisdiction
We have the power to issue extraordinary writs under 1 CMC § 3102(b). Article IV, Section 3 of the Commonwealth Constitution also confers the Supreme Court with the "power to issue all writs necessary to the complete exercise of its duties and jurisdiction under this constitution and the laws of the Commonwealth."
III. Analysis
A. Writs
I. Generally
Numerous CNMI cases have addressed the issuance of a writ. The most often cited case is Tenorio v. Superior Court, et a., 1 N.M.I. 1 (1989). In Tenorio, this Court held that, "traditionally, the use of the aid of appellate jurisdiction has been to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so." Id at 7. This Court has repeatedly noted that "the remedy of mandamus is a drastic one, to be invoked only in extraordinary situations" and "only exceptional circumstances amounting to a judicial 'usurpation of power' will justify the invocation of this extraordinary writ." Id.
2. Writs and Preliminary Injunction
Commonwealth Rule of Civil Procedure 65 permits the Superior Court to issue preliminary injunction using its sound discretion. Villanueva v. Tinian Shipping and Transp. Inc., 2005 MP 12, 7 N. Mar. I. 182. Mandamus is generally not appropriate to dictate how the lower court should exercise its sound discretion. Therefore, while we may consider mandamus in this case, the discretionary nature of a preliminary injunction places a higher burden on a petitioner seeking a writ of mandamus or prohibition.
B. Tenorio Factors
In determining whether to issue writs of mandamus or prohibition , we are guided by five factors, first set forth in Tenorio v. Superior Court, 1 N.M.I. 1. These factors are:
The same factors to be considered for issuance of a writ of mandamus apply to a writ of prohibition. See Commonwealth v. Superior Court (Ada), 2004 MP 14, 7 N. Mar. I. 67; Paulis v. Superior Court, 2004 MP 10, 7 N. Mar. I. 48.
1. The party seeking the writ has no other adequate means, such as a direct appeal, to attain the relief desired;
2. The petitioner will be damaged or prejudiced in a way not correctable on appeal;
3. The lower court's order is clearly erroneous as a matter of law;
4. The lower court's order is an oft-repeated error, or manifests a persistent disregard of applicable rules; and
5. The lower court's order raises new and important problems, or issues of law of first impression.
Id, 1 N.M.I. at 9-10. "In applying the above guidelines to a particular case, there will not always be a bright-line distinction." Commonwealth v. Superior Court (Ada), 2004 MP 14 P8, 7 N. Mar. I. 67. "The considerations are cumulative, and proper disposition will often require a balancing of conflicting indicators." Id. Therefore, we shall consider each of the factors and their cumulative effect.
These principles have been cited in the following cases: Bank of Saipan v. Superior Court, 2005 MP 15, 7 N. Mar. I. 192; Health Prof'l Corp. v. Superior Court, 2004 MP 25, 7 N. Mar. I. 114; Nakatsukasa v. Superior Court, 1999 MP 25, 6 N. Mar. I. 59; Sekisui House, Ltd v. Superior Court, 1999 MP 21, 6 N. Mar. I. 44; In re Feliciano, 1999 MP 3, 5 N. Mar. I. 211; Villacrusis v. Superior Court, 3 N.M.I. 546 (1993); Mafnas v. Superior Court, 1 N.M.I. 74 (1990); Mafnas v. Hefner, 1 N.M.I. 22 (1989); OAF v. Superior Court, 1999 MP 14.
1. Other Adequate Means
Kevin argues that there is no other adequate means to attain the relief desired, because if the parties are forced to wait for an appeal, there is no guarantee that Hyunjin will have any assets left in the CNMI. Without a preliminary injunction, Hyunjin may freely ship any personal property and assets outside the jurisdiction. Ultimately, Kevin is concerned that if Hyunjin ships off the assets, Kevin will be left without recourse for collecting on damages awarded after final judgment from the trial court. While we are sympathetic to Kevin's concerns, we cannot agree with the argument.
Kevin seeks money damages, which is an adequate means of relief. Indeed, money damages for unpaid rent and anticipatory breach is the appropriate form of relief in this case. Kevin does not have any interest in the assets of Hyunjin. In Villanueva v. Tinian Shipping and Transp., Inc., 2005 MP 12, 7 N. Mar. I. 182, we distinguished the case Grupo Mexicano de Desarro, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 119 S.Ct. 1961, 144 L.Ed.2d 319 (1999). In Grupo Mexicano, the U.S. Supreme Court held that a preliminary injunction cannot be issued to prevent a defendant from disposing of assets pending adjudication of an unsecured creditor plaintiff's contract claim for money damages. 527 U.S. 308, 340, 119 S.Ct. 1961, 1978, 144 L.Ed.2d 319. While Villanueva involved a government's claim for taxes, we find that Grupo Mexicano is directly applicable here.
As the trial court noted, "equity is a remedy of last resort, and for that reason should not be regularly employed as a collections tool when money damages is ostensibly an available and adequate remedy." Kevin International Corporation v. Hyunjin Saipan, Inc., Civ. No. 06-03, p.5 (N.M.I. Super. Ct. February 21, 2006) (Order Denying Preliminary Injunction) ("Order"). This is consistent with the rule outlined above. Further, as a general rule, when a party is entitled to a remedy at law, no preliminary injunction should issue. See Grupo Mexicano, 527 U.S. 308, 119 S.Ct. 1961, 144 L.Ed.2d 319.
But see Breentag Int'l Chemicals, Inc. v. Bank of India, 175 F.3d 245 (2nd Cir. 1999) ("a more accurate description of the circumstances that constitute irreparable harm is that where, but for the grant of equitable relief, there is a substantial chance that upon final resolution of the action the parties cannot be returned to the positions they previously occupied); Alvenus Shipping Co. v. Delta Petroleum Ltd., 876 F.Supp. 482 (D.C. N.Y. 1994) (exception to general rule exists when it is shown that money judgment will go unsatisfied absent equitable relief).
We cannot agree with Kevin that there is no adequate remedy on appeal. There is no evidence that Hyunjin will not remain in or return to the jurisdiction. Hyunjin has been cooperative thus far in the proceedings. Although Hyunjin is moving assets to Vietnam, the entity continues to exist in the CNMI. Absent any evidence to the contrary, this Court will not assume a party will entirely leave the jurisdiction or become insolvent. Therefore, an appeal would be an adequate means for Kevin to secure the remedy sought.
2. Prejudice or damage correctable
Kevin has provided no evidence to suggest that Hyunjin will not be able to pay, if monetary damages are assessed against them in a final judgment. On the contrary, the trial transcripts show that Hyunjin offered, on their own volition, to put up a $ 25,000 bond with the court so that they may continue to ship their assets to Vietnam. Accordingly, Hyunjin proceeded to place a $ 25,000 bond with the trial court. By Kevin's own admission, Hyunjin would also be willing to put up the value of the surety. Furthermore, Kevin has an additional $ 100,000 from Hyunjin as a security deposit. This evidence contradicts any equitable arguments which can be made that a preliminary injunction should issue. Instead, it shows that Hyunjin is willing and presumably able to pay out any monetary damages which may be awarded to Kevin.
3. Order Not Clearly Erroneous as a Matter of Law
The purpose of a preliminary injunction is to maintain the status quo between the parties pending a trial on the merits. Pacific American Insurance & Escrow (CNMI), Inc., v. Anderson and John Does One through Seven, 6 N.M.I. 17. Kevin argues that since the trial court denied the preliminary injunction, the status quo between the parties has been disrupted. Kevin further alleges that as a contract has been found to exist, and damages are sure to be awarded, the need to maintain the status quo is therefore necessary in order to ensure that Kevin will be able to collect after final judgment.
We first look to the reasoning of the trial court in denying the preliminary injunction. "If a rational and substantial legal argument can be made to support the questioned ruling, the case in not appropriate for mandamus relief, even though a reviewing court may find reversible error on normal appeal. " Sablan v. Superior Court, 2 N.M.I. 166, 168 (1991). The two part test used by the trial court in determining whether or not to grant the preliminary injunction was plaintiff's probability of success and the possibility of irreparable harm to plaintiff. See Order. The trial court found that Kevin may prevail on proving an enforceable contract lease agreement with Hyunjin for a term of five years. Id. at 4. The trial court went on to state "the finding Hyunjin is only obligated to a lease term of five years is significant because it suggests that Plaintiffs will likely not prevail on their claim of anticipatory breach and consequently any damages claim pursuant to its breach of claim will be significantly reduced." Id. We are puzzled by this reasoning, as Hyunjin has only paid rent to Kevin for four years, rather than five. We are further perplexed by the trial court's admonishment of Kevin by stating Kevin "could have implemented other measures, such as bringing suit once Hyunjin's went into arrears in paying its rent." Id at 5. In this case, Hyunjin did not pay rent in December 2005 and suit was filed on January 5, 2006. We can not imagine how Kevin could be expected to brought suit any quicker.
Notwithstanding these noteworthy questions, a rational argument can be made to support the denial of the preliminary injunction. First, the trial court noted that a remedy at law, rather than equity would be appropriate in this case. Order at 5. For the reasons discussed supra, we agree with that application in this case. Secondly, several facts of the case are still in dispute. No judgment has been made regarding the contract. The trial court found that Kevin may have had a contract, but a final determination has yet to issue. Further, Hyunjin questions whether Kevin fulfilled its responsibility in constructing the barracks within the time agreed. A finding on this issue could further reduce any monetary damages awarded to Kevin. Finally, the trial court attempted to balance the needs that it saw in this case by ordering Hyunjin to post what amounts to a $ 25,000 bond. In that way, the trial court used its discretion to maintain the status quo between the parties. Therefore, we do not find that the ruling of the trial court to deny the preliminary injunction was clearly erroneous, as a matter of law.
Kevin may also be required to mitigate damages on this contract, in accordance with contract law.
4. Not An Oft-Repeated Error Manifesting a Persistent Disregard of Well-Established Principles
There are no arguments presented which maintain that this is an oft-repeated error. Instead, Kevin argues that it "will be" repeated often, but does not offer any past evidence of such an error. Therefore, this factor is essentially non-applicable in this case. We are mindful, however, that "the considerations are cumulative, and proper disposition will often require a balancing of conflicting indicators." Commonwealth v. Superior Court (Ada), 2004 MP 14 P8, 7 N. Mar. I. 67.
The Tenorio factors do require a balancing of conflicting factors, as the fourth and fifth factors seem to be conflicting.
5. Order Raises Issues of First Impression and Creates New and Important Problems
This case does raise a judicial eyebrow. As Kevin notes, the economy of the CNMI is in decline and many foreign businesses are leaving. Creditors may be left without recourse. While this does create a new and important problem, "this factor alone does not convince us that writ of mandamus is the proper vehicle." Mafnas v. Superior Court, 1 N.M.I. 74, 79 (1990).
IV. Conclusion
As this Court found in Tenorio,
There are dangers to an unprincipled use of preemptory writs, as for example, the possibility that its use would be an impermissible alternative to the normal appellate process. Its abuse could operate to undermine the mutual respect generally existing between trial and appellate courts. Further appellate courts should insure the temptation to grant such writs merely because they are sympathetic to petitioner's underlying actions.
Tenorio, 1 N.M.I. at 8. While we understand the concern of the petition, we are convinced that there are other adequate means in which to have remedy. Further, we find no evidence that monetary damages will not be paid or that Hyunjin will not readily pay any monetary damages awarded. Finally, we find that order was not clearly erroneous as a matter of law. The status quo of the parties was maintained despite the denial of the preliminary injunction. Therefore, the petition for the writ of mandamus or prohibition is DENIED.
Because we deny the petition based on the Tenorio factors, we need not address the other issues presented by Hyunjin.
SO ORDERED this 9th day of March 2006.
/s/
ALEXANDRO C. CASTRO, Acting Chief Justice
/s/
JOHN A. MANGLONA, Associate Justice
/s/
TIMOTHY H. BELLAS, Justice Pro Tempore