June 21, 2001

Defendants, Calaco Development Corp. and Nunzio Casalino,brought this interlocutory appeal from an order granting apreliminary injunction in favor of plaintiff, William M. Franz. Wereverse.

This action began with the filing of plaintiff's complaint forbreach of contract and breach of fiduciary duty against defendants. Plaintiff was a limited partner in an entity known as CalacoLimited Partnership. Defendant Calaco Development Corp. was thegeneral partner, and defendant Nunzio Casalino was the chiefoperating officer. The purpose of the limited partnership was todevelop and sell vacant lots of land for the construction ofsingle-family residences and town homes in a development known asWedgewood.

Plaintiff's complaint alleged that defendants breached thepartnership agreement by selling vacant lots of land in thedevelopment to an entity known as the Villas of Wedgewood, anentity affiliated with Casalino, without the written consent ofplaintiff as a limited partner and for prices less than set forthin the partnership agreement. As a result, plaintiff claims thathe, as a limited partner, lost profits in excess of $1 million. After defendants filed an answer to the complaint, affirmativedefenses, and a counterclaim against plaintiff, plaintiff filed amotion for a preliminary injunction. The motion asserted that theterms of the partnership agreement provided that plaintiff was toreceive 33.5% of the profits from the partnership, projected at $5 million to $8 million. The motion further alleged that thepartnership agreement prohibited the general partner, Calaco, fromselling any of the lots to related parties without the writtenconsent of 50% of the limited partners. Plaintiff asserted that,in violation of the partnership agreement, Calaco sold lots todefendant Casalino and other third parties at a discounted price of$40,000. As a result, plaintiff claimed irreparable harm in thatthe partnership assets would be depleted and insufficient fundswould remain in the partnership to satisfy a judgment inplaintiff's favor. Plaintiff's motion sought a preliminaryinjunction prohibiting defendants from selling, conveying, orotherwise transferring any residential lots in the Wedgewooddevelopment pending a hearing on a motion for a permanentinjunction.

An evidentiary hearing was conducted on plaintiff's motion fora preliminary injunction. In lieu of a transcript from thehearing, the parties have provided a bystander's report pursuant toSupreme Court Rule 323(c). 166 Ill. 2d R. 323(c). The reportindicates that plaintiff, defendant Casalino, and Frederic Franzwere called as witnesses.

Plaintiff testified that he and his brother, Frederic Franz,were the owners of the Wedgewood property since 1961. Threecontracts for the sale of the property did not close. Plaintiff'sattempts to sell or develop the property failed. In 1990,plaintiff entered into a partnership agreement for the developmentof the Wedgewood property. Under the partnership agreement,plaintiff and his brother would provide the Wedgewood land, valuedat $3 million. Calaco was to contribute $1 million due at closing. A schedule set forth payment of the remaining sum of $2 million toplaintiff and his brother. Under the agreement, plaintiff and hisbrother were limited partners and were to receive 50% of anyprofits from the development. Calaco was to act as general partnerand was responsible for the day-to-day sales and marketing of thedevelopment.

Plaintiff was shown two exhibits identified as contracts fordeed for lots from Calaco to Casalino and Sebastian Lorenzo. Plaintiff testified that he believed his own signature and that ofhis brother were required because the partnership agreementprohibited the selling of a group of lots to defendants or entitiesrelated to defendants without the written consent of 50% of thelimited partners. Plaintiff denied that he consented in writing ororally to sell lots to defendants or related entities for termsother than those set forth in the partnership agreement.

In 1996, plaintiff learned Casalino was selling lots torelated entities contrary to the terms set forth in the partnershipagreement and without plaintiff's written consent. Plaintiff wasshown a number of closing statements that identified the seller asVillas of Wedgewood, an entity owned by Casalino that built villasor town homes on lots in Wedgewood.

Under the terms of the partnership agreement, plaintiff was toreceive a share of the profits of the Wedgewood development. Sincethe inception of the partnership, he did not receive any profits ordistribution from defendants other than the repayment of his shareof the $3 million land contribution.

Plaintiff reviewed Casalino's plan for the termination of thepartnership. He disagreed with the assessment that there would belittle, if any, profit to distribute to the partnership. Based onhis own calculations, plaintiff estimated that defendants made aprofit of either $645,435 or $1,316,794 by selling villa lots torelated entities, depending on the land valuation ratio used. Contrary to defendants' assessment of profits, plaintiff's estimateof profits was slightly less than $3 million.

Frederic Franz was called to testify next. He admitted thathe had very little knowledge of the arrangement set forth in thepartnership agreement because he relied on his brother, anattorney, to prepare the agreement. He signed the partnershipagreement at his brother's direction.

In 1991, Frederic Franz was advised by Casalino that the lotswere not selling at the price set forth in the partnershipagreement and would have to be reduced. He attended a meeting atplaintiff's law office where Casalino complained that the price ofthe lots was too high, that they would not sell to other buildersor developers, and that his construction company would not be ableto make a profit buying the lots and building town homes unless theselling price was reduced to $40,000.

Frederic Franz admitted that the limited partners had beenpaid the balance owed to them by the partnership for theircontribution of land to the project and that they were fortunate toreceive these payments given the inability to sell lots to anyoneother than the Villas of Wedgewood. He denied signing any document authorizing the sale of lots to entities related todefendants.

The last witness was Casalino. He testified that there wasdifficulty selling both the villa and single-family lots inWedgewood at the prices set forth in the partnership agreement fromthe inception of the project because builders could not build andsell for a profit at those prices. Casalino's construction companywas willing to purchase and build the lots in order to createmomentum.

Casalino confirmed attendance at a meeting with the Franzbrothers in 1995 where he complained that the price of the lots wastoo high and that they were not able to sell to other buildersunless the selling price was reduced to $40,000. The Franzbrothers agreed that there was difficulty in selling the lots. Casalino believed that the Franz brothers orally consented to thesale of lots to Villas of Wedgewood for $40,000 and for terms otherthan set forth in the partnership agreement. However, he admittedthat there was no written instrument authorizing the sale of lotsto Villas of Wedgewood by the limited partnership. Nevertheless,the Villas of Wedgewood purchased approximately 50 lots in 1995 for$40,000 each.

In 1997, Calaco projected profits of the partnership at$1,238,249.16. As of 1999, Calaco's termination plan for thepartnership projected profits in the amount of $425,904. As of thedate of the evidentiary hearing, the only partnership assets werethe remaining lots. The partnership had a significant amount ofdebt outstanding. It had to borrow funds to meet the scheduledpayments to the limited partners for their land contribution.

The trial court granted plaintiff's motion for a preliminaryinjunction. In making its ruling, the trial court indicated thatplaintiff sustained his burden of proving a clearly ascertainableright in need of protection and a likelihood of success on themerits. In the trial court's view, the evidence was undisputedthat the Franz brothers did not agree in writing to the sale oflots to Villas of Wedgewood; that 50 lots were purchased by relatedentities for $40,000 without the written consent of the limitedpartners; and that plaintiff had made a prima facie case that thesales were in breach of the partnership agreement.

The trial court stated that plaintiff had shown irreparableharm and an absence of adequate legal remedies, based on theundisputed testimony that the only remaining assets of thepartnership were the remaining unsold lots and that, without aninjunction, plaintiff faced the possibility of an uncollectiblejudgment. The trial court rejected defendants' argument thatplaintiff had an adequate remedy at law in the form of moneydamages and no right to an injunction to ensure collection shouldplaintiff prevail on his complaint for breach of contract andbreach of fiduciary duty. The trial court granted plaintiff'smotion and enjoined defendants from selling any of the remaininglots pending trial. Defendants' request that plaintiff be requiredto post a bond was denied.

The trial court directed plaintiff to prepare an order forinjunction. Plaintiff's counsel forwarded the proposed order tothe trial court and defendants' counsel for review. Defendants'counsel was out of town and did not approve, reject, or consent tothe order as prepared by plaintiff's counsel. Unaware thatdefendants' counsel did not approve or consent to the order, the trial court entered the order on August 4, 2000, as prepared byplaintiff's counsel. The order read as follows:

"This cause coming to be hearing on plaintiff's motionfor a preliminary injunction and expedited discovery, thecourt having received and reviewed said motions and allwritten briefs submitted by the parties, the court conductingan evidentiary hearing on the motion for a preliminaryinjunction with all parties present, witnesses being sworn inand testifying, documents offered into evidence, and oralarguments heard from counsel for plaintiff and defendants, andthe court being otherwise duly advised, it is hereby ordered:

1. Plaintiff's motion for a preliminary injunction isgranted and the defendants, CALACO DEVELOPMENTCORPORATION and NUNZIO CASALINO and defendants' agentsand employees, and each and all of them, are enjoinedfrom selling, conveying or otherwise transferring anyresidential lots located in the development commonlyknown as 'Wedgewood' located in the City of Crystal Lake,County of McHenry, Illinois, which is the subject matterof this lawsuit.
   
2. The order for preliminary injunction is grantedimmediately and without further notice.
   
3. The order for preliminary injunction is granted withoutbond."

Defendants filed their notice of interlocutory appeal onSeptember 1, 2000. They seek the dissolution of the preliminaryinjunction and assert that the order granting the injunction isdeficient because it fails to include the reasons for its entry, asrequired by section 11-101 of the Code of Civil Procedure (735 ILCS5/11--101 (West 1998)). They further assert that the trial courtabused its discretion in granting the preliminary injunction.

A preliminary injunction is a provisional remedy granted topreserve the status quo until the case can be decided on themerits. Buzz Barton & Associates, Inc. v. Giannone, 108 Ill. 2d373, 382 (1985). Thus, its objective is not to determinecontroverted rights, controverted facts, or the merits of a case. Buzz Barton, 108 Ill. 2d at 386. Because a preliminary injunctionis an extraordinary remedy, it should be granted only when the needis clear. Vasquez v. City of Woodstock, 242 Ill. App. 3d 766, 771(1993).

To establish entitlement to preliminary injunctive relief, theplaintiff must demonstrate (1) a clearly ascertainable right thatneeds protection; (2) irreparable harm without the protection ofan injunction; (3) no adequate remedy at law for plaintiff'sinjury; and (4) a substantial likelihood of success on the meritsin the underlying action. Vasquez, 242 Ill. App. 3d at 771. Oncethe plaintiff establishes these elements, the court must balancethe equities to determine the relative inconvenience to the partiesand whether the burden on the defendant should the injunction issueoutweighs the burden on the plaintiff should it be denied. Shodeenv. Chicago Title & Trust Co., 162 Ill. App. 3d 667, 673 (1987). The trial court has broad discretion in determining whether togrant a preliminary injunction. Lou Owen, Inc. v. Village ofSchaumburg, 279 Ill. App. 3d 976, 984 (1996). A reviewing courtwill reverse a trial court's order granting a preliminaryinjunction only when it constitutes an abuse of discretion. LouOwen, Inc., 279 Ill. App. 3d at 984.

We first address defendants' contention that the trial courtabused its discretion in granting the preliminary injunction. Defendants assert that the trial court's ruling constitutes anabuse of discretion because it prohibits the selling of additionallots in Wedgewood to protect plaintiff's monetary interest in theevent he is successful on his complaint for breach of contract andbreach of fiduciary duty. Defendants claim that the trial court'sruling effectually amounts to a prejudgment attachment and thatplaintiff has failed to establish the requisite elements ofirreparable harm and an inadequate remedy at law.

Irreparable harm occurs only where the remedy at law isinadequate, meaning that monetary damages cannot adequatelycompensate the injury and the injury cannot be measured bypecuniary standards. Carriage Way Apartments v. Pojman, 172 Ill.App. 3d 827, 839 (1988); Shodeen, 162 Ill. App. 3d at 673-74,citing Best Coin-Op, Inc. v. Old Willow Falls Condominium Ass'n,120 Ill. App. 3d 830, 834 (1983). A preliminary injunction shouldnot be granted where damages caused by the alteration of the statusquo pending a final decision on the merits can be compensatedadequately by monetary damages calculable with a reasonable degreeof certainty. Carriage Way, 172 Ill. App. 3d at 839; Shodeen, 162Ill. App. 3d at 674.

Attachment is a remedy by which a party's property is securedand held to satisfy a debt that the other party hopes to prove. 735 ILCS 5/4--101 (West 1998); Bowman v. Dixon Theatre Renovation,Inc., 221 Ill. App. 3d 35, 40 (1991). Section 4--101 of the Codeof Civil Procedure permits attachment in 11 specific circumstances. 735 ILCS 5/4--101 (West 1998). The law does not provide for aprocess of equitable attachment. Taking away the control ofproperty by means of an injunction for the purpose of anticipatinga judgment is abhorrent to the principles of equitablejurisdiction. Carriage Way, 172 Ill. App. 3d at 838. The onlyexception is when the claimant has an interest in specific fundsheld by the debtor. Kurti v. Silk Plants Etc. Franchise Systems,Inc., 200 Ill. App. 3d 605, 609-11 (1990).

Plaintiff's complaint alleges breach of contract and breach offiduciary duty by virtue of the sale of lots in Wedgewood withoutplaintiff's consent to parties affiliated with defendants. In theprayer for relief, plaintiff seeks monetary damages, disgorgementof profits, and attorney fees. The bystander's report from thehearing on the motion for a preliminary injunction indicates thatplaintiff presented evidence of monetary loss due to the conveyanceof lots. Based on the bystander's report, the only evidence ofharm to plaintiff resulting from defendants' transfer of lots waslost profit and the monetary loss resulting from the diversion ofassets from the partnership,

The fact that the controversy concerns the conveyance of landdoes not change the character of the complaint or the relief soughttherein. The limited partnership was formed for the purpose ofdeveloping real estate. However, plaintiff's entitlement based onthe partnership agreement is to profits in the partnership, not toan interest in real estate. The complaint alleges financial injuryto plaintiff by defendant's conveyance of lots at a price less thanset forth in the partnership agreement. Because the only reliefrequested by plaintiff is monetary, injunctive relief isinappropriate and resembles a prejudgment attachment. See GrowerService Corp. v. Brown, 204 Ill. App. 3d 532, 535 (1990).

In our view, the trial court abused its discretion in grantingthe injunction. The bystander's report provides support for thisconclusion. At the evidentiary hearing, the trial court rejecteddefendants' contention that plaintiff had an adequate remedy at lawin the form of money damages and no right to an injunction topreserve assets to ensure the collection of the judgment in thecomplaint for breach of contract. The trial court's finding thatplaintiff showed irreparable harm and an absence of legal remediesbased on evidence that the sole remaining partnership asset was theunsold lots illustrates its intent to preserve the unsold lots forthe purpose of retaining the property as an asset to be used forthe satisfaction of a judgment in plaintiff's favor. The injuryplaintiff complains of, breach of contract and breach of fiduciaryduty, is capable of being measured and corrected by an award ofmoney damages. See Shodeen, 162 Ill. App. 3d at 674. Therefore,plaintiff clearly has an adequate remedy at law. By halting thesale of further lots, the trial court effectively placed a lien onthe real estate in the form of a prejudgment attachment. The trialcourt abused its discretion in granting the preliminary injunction.

Due to our determination on this issue, it is unnecessary toaddress whether the preliminary injunction must be reversed becausethe trial court failed to include the reasons for its entry in theorder.

The judgment of the circuit court of McHenry County isreversed.

Reversed.

GROMETER and BYRNE, JJ., concur.