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Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case. ATTORNEY FOR APPELLANT: CRAIG V. BRAJE Braje, Nelson & Janes, LLP Michigan City, Indiana ATTORNEYS FOR APPELLEE: TIMOTHY F. KELLY BETH L. BROWN Kelly Law Offices Crown Point, Indiana

FILED
Feb 18 2009, 11:02 am
of the supreme court, court of appeals and tax court

IN THE COURT OF APPEALS OF INDIANA
SACHS & HESS, P.C., ) ) Appellant/Plaintiff/Counter Defendant/ ) Third-Party Defendant, ) ) and ) ) ROBERT M. HESS, ) ) Counter Defendant/Third-Party Defendant, ) ) vs. ) ) LAYER, TANZILLO, STASSIN & ) BABCOCK, P.C., RONALD F. LAYER, ) MICHAEL D. BABCOCK, ANDREW R. ) TANZILLO and LARRY D. STASSIN, ) ) Appellees/Defendants/Counter Claimants/ ) Third-Party Plaintiffs, ) ) and ) ) BETH SIMMONS, ) ) Defendant. )

CLERK

No. 45A03-0806-CV-332

INTERLOCUTORY APPEAL FROM THE LAKE SUPERIOR COURT The Honorable Jeffery J. Dywan, Special Judge Cause No. 45D11-0703-PL-26

February 18, 2009 MEMORANDUM DECISION - NOT FOR PUBLICATION BRADFORD, Judge

Appellant/Plaintiff/Counter Defendant/Third-Party Defendant Sachs & Hess, P.C. ("S&H"), appeals from the denial of its request for a preliminary injunction against Appellees/Defendants/Counter Claimants/Third-Party Plaintiffs Layer, Tanzillo, Stassin & Babcock, P.C. ("LTSB"), Ronald F. Layer, Andrew R. Tanzillo, Larry D. Stassin, and Michael D. Babcock (collectively, "Appellees"). Appellees also request that we award them appellate attorneys fees. We affirm the trial court and deny Appellees request for appellate attorneys fees. FACTS AND PROCEDURAL HISTORY On August 29, 2005, Layer, Tanzillo, Stassin, and Babcock, who had been attorneys employed by S&H, left to form LTSB. Approximately 550 cases, of which approximately 292 were contingency-fee cases, transferred from S&H to LTSB as a result of the quartets leaving. Over the course of the next several months, LTSB

attempted on numerous occasions to convince S&H to discuss the matter of what share of fees earned on cases resolved by LTSB, but originated by S&H, would be paid to S&H. No agreement on the matter of division of fees was reached, although all agree that S&H is entitled to collect a portion of the fee earned from any resolved LTSB case originated 2

at S&H. At some point in August or September of 2006, LTSB paid $137,000.00 to a bank against a line of credit from an escrow account it had apparently established primarily for the purpose of holding attorney fees owed to S&H. In November of 2006, S&H filed suit against LTSB and Layer and requested a preliminary injunction against the parties, but it later abandoned its request. On August 13, 2007, S&H filed its first amended complaint against LTSB and Layer, Tanzillo, Stassin, Babcock, and Beth A. Simmons as individuals. The first amended complaint alleges, against varying parties, breach of contract, tortious interference and conversion, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, constructive fraud, computer tampering, tortious interference with contractual rights, tortious interference, breach of promise and wrongful payment of funds, overpayment of compensation, breach of contract and attempted conversion, and unauthorized use of funds. The amended complaint also requested another preliminary injunction. On November 21, 2007, S&H filed an amended motion for preliminary injunction against Appellees requesting that LTSB deposit all past and future fees collected from cases that originated at S&H in a joint account (to which LTSB would not have unilateral access) until the trial court could enter a judgment as to their distribution, render a full accounting of previously-resolved cases, and promptly notify S&H of all future resolutions. On May 8, 2008, following a hearing, the trial court denied S&Hs motion for a preliminary injunction. On May 30, 2008, S&H filed its notice of appeal. DISCUSSION AND DECISION I. Whether the Trial Court Abused its Discretion in 3

Denying S&H's Motion for a Preliminary Injunction S&H contends that the trial court abused its discretion in denying S&Hs motion for a preliminary injunction that would require LTSB to deposit all fees generated by the cases transferred from S&H into an account from which it could not draw for the duration of this litigation. The denial of a motion for preliminary injunction rests within the sound discretion of the trial court, and our review is limited to whether there was a clear abuse of that discretion. When determining whether or not to grant a preliminary injunction, the trial court is required to make special findings of fact and state its conclusions thereon. When findings and conclusions are made, the reviewing court must determine if the trial courts findings support the judgment. The trial courts judgment will be reversed only when clearly erroneous. Findings of fact are clearly erroneous when the record lacks evidence or reasonable inferences from the evidence to support them. We also determine whether the trial courts conclusions are contrary to law. We consider the evidence only in the light most favorable to the judgment and construe findings together liberally in favor of the judgment. Although we defer substantially to the trial courts findings of fact, we review questions of law de novo. In order to obtain a preliminary injunction, the moving party has the burden of showing by a preponderance of the evidence that: (1) the movants remedies at law are inadequate, thus causing irreparable harm pending resolution of the substantive action; (2) the movant has at least a reasonable likelihood of success at trial by establishing a prima facie case; (3) the threatened injury to the movant outweighs the potential harm to the nonmovant resulting from the granting of the injunction; and (4) the public interest would not be disserved. The movant must prove each of these requirements to obtain a preliminary injunction. If the movant fails to prove even one of these requirements, the trial court cannot grant an injunction. The power to issue a preliminary injunction should be used sparingly, and such relief should not be granted except in rare instances in which the law and facts are clearly within the moving partys favor. Planned Parenthood of Ind. v. Carter, 854 N.E.2d 853, 863 (Ind. Ct. App. 2006) (citations and quotation marks omitted and paragraph formatting altered). 4

We conclude that S&H has failed to establish irreparable harm, and, as such, we need not address the other three requirements. S&H seems to concede that it would suffer, at worst, economic harm from the activity it seeks to have enjoined. As a general rule, "A party suffering mere economic injury is not entitled to injunctive relief because damages are sufficient to make the party whole." Ind. Family & Soc. Servs. Admin. v. Walgreen Co., 769 N.E.2d 158, 162 (Ind. 2002) (citing Xantech Corp. v. Ramco Indus., 643 N.E.2d 918, 921-22 (Ind. Ct. App. 1994)). S&H nonetheless seeks to satisfy the "irreparable harm" requirement by alleging illegal activity on the part of LTSB and other defendants. [W]here the action to be enjoined is unlawful, the unlawful act constitutes per se "irreparable harm" for purposes of the preliminary injunction analysis. Ferrell v. Dunescape Beach Club Condominiums Phase I, Inc., 751 N.E.2d 702, 713 (Ind. Ct. App. 2001). When the per se rule is invoked, the trial court has determined that the defendants actions have violated a statute and, thus, that the public interest is so great that the injunction should issue regardless of whether the plaintiff has actually incurred irreparable harm or whether the plaintiff will suffer greater injury than the defendant. See BLACKS LAW DICTIONARY 1162 (7th ed. 1999) (per se means of, in, or by itself). Accordingly, invocation of the per se rule is only proper when it is clear that a statute has been violated. Short On Cash.net of New Castle, Inc. v. Dep't of Fin. Inst., 811 N.E.2d 819, 823 (Ind. Ct. App. 2004). S&H alleges that Appellees have engaged in criminal conversion in their handling of the attorney fees at issue. Specifically, S&H argues that LTSB has committed criminal conversion by failing to pay fees due to S&H in the Lynn Peters and Estate of Barrera cases and in making payments to the Estate and against a line of credit from an escrow account. "A person who knowingly or intentionally exerts unauthorized control over 5

property of another person commits criminal conversion, a Class A misdemeanor." Ind. Code

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