This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
AVEDA Corporation, et al.,
Filed September 26, 2000
Robert R. Weinstine, Tiffany A. Blofield, Laura A. Pfeiffer, Winthrop & Weinstine, P.A., 3000 Dain Rauscher Plaza, 60 South Sixth Street, Minneapolis, MN 55402 (for respondents)
Considered and decided by Toussaint, Chief Judge, Schumacher, Judge, and Huspeni, Judge.*
U N P U B L I S H E D O P I N I O N
Appellants Ledal Italia S.A.S (Ledal) and Ezio Garavani challenge the denial of their motion for a temporary injunction, arguing the district court abused its discretion. We affirm.
This appeal arises from an action Ledal and Garavani filed against respondents AVEDA Corporation and Jeffrey W. Cook. AVEDA is a Minnesota corporation engaged in the manufacture, sale, and distribution of, among other things, hair care, skin care, and color cosmetic products worldwide. Cook is general counsel for AVEDA. Ledal is an Italian business licensed and authorized to do business in Italy. Garavani was and is the principal shareholder and chief executive officer of Ledal.
From approximately December 1, 1993, until March 31, 1999, Ledal was AVEDA's distributor in Italy pursuant to the terms of a December 1, 1993 distributorship agreement, a negotiated contract between Ledal and AVEDA. The contract was executed by Garavani, an experienced professional in the field of cosmetic and beauty-related products represented by legal counsel, and AVEDA represented by Cook.
Over the course of Ledal and Garavani's relationship with AVEDA, Ledal and Garavani amassed debt to AVEDA in an amount exceeding $1 million. Ledal and Garavani acknowledge that they owe this debt to AVEDA, but contend that they paid significant funds above and beyond any payments for the ordinary cost of the goods that were provided by AVEDA. In March 1999, Ledal and Garavani offered to pay the debt to AVEDA in full contingent upon AVEDA extending the terms of its distributorship with Ledal and Garavani. On March 15, 1999, AVEDA made a written demand to Ledal and Garavani for payment of the debt owed. When Ledal and Garavani failed to pay, AVEDA terminated their distributorship in writing on March 31, 1999, pursuant to the distributorship agreement.
Ledal and Garavani filed this action against AVEDA and Cook, alleging claims for violations of the Minnesota Franchise Act, the Minnesota Sales Representative Act, the Minnesota Antitrust Act, unjust enrichment, breach of contract, recoupment, breach of fiduciary duty and tortious interference with contract. Ledal and Garavani moved for a temporary injunction. In a February 2, 2000 order, the district court denied the motion. Ledal and Garavani appeal.
The district court has discretion in deciding whether to grant a temporary injunction and will not be reversed on appeal absent a clear abuse of its discretion. Carl Bolander & Sons Co. v. City of Minneapolis, 502 N.W.2d 203, 209 (Minn. 1993). When reviewing a temporary injunction determination, this court views the facts alleged in the pleadings and affidavits in the light most favorable to the prevailing party. Pacific Equip. & Irrigation, Inc. v. Toro Co., 519 N.W.2d 911, 914 (Minn. App. 1994), review denied (Minn. Sept. 16, 1994). A district court's findings regarding entitlement to injunctive relief will not be set aside unless clearly erroneous. Upper Midwest Sales Co. v. Ecolab, Inc., 577 N.W.2d 236, 240 (Minn. App. 1998) (citing LaValle v. Kulkay, 277 N.W.2d 400, 402 (Minn.1979)).
A temporary injunction is an “extraordinary equitable remedy” that serves to maintain “the status quo pending a trial on the merits.” Ecolab, Inc. v. Gartland, 537 N.W.2d 291, 294 (Minn. App. 1995) (quotation omitted). For a temporary injunction to be granted, the parties seeking the injunction must show that any possible legal remedy is inadequate and an injunction is necessary to prevent great irreparable injury. Cherne Indus., Inc. v. Grounds & Assocs., Inc., 278 N.W.2d 81, 92 (Minn. 1979). In considering whether to grant or deny a temporary injunction, a court must consider five factors set forth in Dahlberg Bros. v. Ford Motor Co., 272 Minn. 264, 274-75, 137 N.W.2d 314, 321-22 (1965). These factors are (1) the relationship between the parties, (2) the balancing of harms to both parties, (3) the likelihood of success on the merits, (4) public policy considerations, and (5) any administrative burdens. Id.
The district court found that the relationship between the parties is "a purely contractual relationship between sophisticated business parties." "Generally, injunctive relief based on a contract must be coextensive with the terms of the contract." Cherne Indus., Inc., 278 N.W.2d at 93. The parties do not dispute that AVEDA terminated the distributorship agreement on March 31, 1999. But Ledal and Garavani argue that it is nonetheless appropriate to fashion an equitable injunctive remedy. See id. (noting that there may be situations where injunctive relief extending beyond expiration of contract is appropriate). But here the district court determined that because the relationship between Ledal and Garavani and AVEDA has "always been solely contractual as outlined in the [distributor] [a]greement," Ledal and Garavani have an adequate remedy at law and are not entitled to equitable relief.
Importantly, the district court found that there is no emergency or irreparable harm that would require an injunction to be issued before the determination of this case on its merits. The district court reasoned that since the distributor agreement is presently terminated,
[t]o grant the injunctive relief requested by [Ledal and Garavani] would require AVEDA to reinstate a distributor that has been terminated for over nine months and who owes AVEDA over $1,000,000.
Ledal and Garavani argue that the district court should have granted injunctive relief even if it meant disturbing the status quo because
it simply makes no sense to allow an inventory with an estimated value in excess of $400,000 to simply rot away in a warehouse in Italy awaiting a final determination of this case on its merits.
A temporary injunction is not proper where money damages can compensate the moving party. See Rexton, Inc. v. State, 521 N.W.2d 51, 54 (Minn. App. 1994). In arguing that money damages are not adequate, Ledal and Garavani rely on Lano Equip., Inc. v. Clark Equip., Inc., 399 N.W.2d 694 (Minn. App. 1987), review denied (Minn. Apr. 17, 1987). In Lano, this court discussed the difficulty in determining damages for injuries associated with termination of dealerships. Id. at 698. Lano is readily distinguishable because in that case injunctive relief was sought prior to dealership termination. Id. at 697. Further, despite Ledal and Garavani's claim that the damages for the loss of perishable inventory are inherently difficult and uncertain to determine, we see nothing in the record that suggests that money damages will not provide an adequate remedy at law. The district court specifically found "no emergency or irreparable harm that would require an injunction to be issued." This finding is not clearly erroneous on the record before us.
The district court also found "no compelling public policy reason" to issue injunctive relief and noted that the administrative-burdens factor did not favor Ledal and Garavani. The district court did not explicitly address the likelihood-of-success factor, noting it need not be reached because Ledal and Garavani had failed to satisfy the other four factors. Where the moving party has made no showing of irreparable harm and admittedly seeks to disturb the status quo, it is not a clear abuse of discretion for the district court to forgo likelihood-of-success analysis. On the record before us, Ledal and Garavani have not demonstrated irreparable harm.
Because Ledal and Garavani have an adequate remedy at law, the denial of the temporary injunction was not an abuse of discretion.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.