ATTORNEYS FOR APPELLANT
: ATTORNEYS FOR APPELLEE:
PETER J. RUSTHOVEN GEOFFREY SLAUGHTER
MICHAEL ROSIELLO DEBRA McVICKER LYNCH
JOSEPH C. CHAPELLE Sommer Barnard Ackerson, PC
Barnes & Thornburg LLP Indianapolis, Indiana
COURT OF APPEALS OF INDIANA
CLOVERLEAF ENTERPRISES, INC., )
vs. ) No. 49A02-0402-CV-185
CENTAUR ROSECROFT, LLC, )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Thomas J. Carroll, Judge
Cause No. 49D06-0402-PL-324
September 29, 2004
OPINION - FOR PUBLICATION
Appellant-Respondent Cloverleaf Enterprises, Incorporated (Cloverleaf) appeals the trial courts grant of an anti-suit
injunction, without the issuance of a bond, in favor of Appellee-Petitioner Centaur Rosecroft,
LLC (Centaur). Pursuant to the anti-suit injunction, Cloverleaf is precluded from prosecuting
a case that it filed in a Maryland court of law, which involves
similar parties and issues to the one at bar. We reverse under
principles of judicial restraint and comity.
Cloverleaf raises four issues, the following one of which we find dispositive:
Whether the trial court abused its discretion by granting the anti-suit injunction by,
first, prohibiting Cloverleafi.e., a Maryland corporationfrom pursuing an action, which involves Maryland citizens,
Maryland law, and the sale of Maryland real estate, in a Maryland court
of law and, second, granting the injunction absent a showing: (1) of irreparable
harm; (2) that Centaur has a reasonable likelihood of success on the merits;
(3) that the threatened injury outweighed the potential harm to Cloverleaf resulting from
the granting of an injunction; and (4) that the public interest would not
be disserved.See footnote
Facts and Procedural History
The specific controversy at issue here concerns the propriety of a trial courts
order enjoining parties, over whom it has personal jurisdiction, from pursuing similar litigation
in a sister state. To better understand the complex proceedings in this
case, an overview of the underlying dispute and ensuing litigation is helpful.
This multi-jurisdictional suit resulted from an alleged breach of an asset purchase agreement
(Agreement) executed on January 17, 2003, between Centaur, a Maryland limited liability company,
and Cloverleaf, a Maryland corporation. Pursuant to the Agreement, Centaur agreed to
buy the Rosecroft Racewayi.e., a racetrack located in Ft. Washington, Marylandfrom Cloverleaf in
exchange for $10,000,000.00. The Agreement, which is governed by Maryland law, contains
the following provisions:
If the Closing does not occur on or before the First Closing Date
because as of the First Closing Date there is a Pending Challenge, this
Agreement shall continue in full force and effect until the Second Closing Date.
If the Closing does not occur on or before the Second Closing
Date because as of the Second Closing Date there is a Pending Challenge,
this Agreement shall automatically terminate on the day immediately following the Second Closing
Date. . . .
* * * * *
(c) If the Closing does not occur on or before the First Closing Date
for any reason other than as described in Sections 3.3(a) or (b) above,
this Agreement shall automatically terminate on the day immediately following the First Closing
Appellants App. at 134. The Agreement defines the First Closing Date as
the earlier of (i) ten (10) days after receipt by [Centaur] of Regulatory
Approval (or such other date as the parties shall mutually agree), and (ii)
November 1, 2003. Id. at 123. The Second Closing Date is
defined as the earlier of (i) the date any Pending Challenge preventing the
Closing from occurring on or before the First Closing Date becomes fully resolved
and non-appealable, and (ii) November 1, 2008. Id. at 128. Further,
the Agreement defines a Pending Challenge as any pending litigation or filed administrative
action that could adversely affect the ability of [Centaur] to obtain Regulatory Approval.
Id. at 127.
II. Commencement of the Indiana and Maryland Actions
On January 17, 2003, Centaur filed an application with the Maryland Racing Commission
(Commission) to obtain a racing license. On September 22, 2003, and October
27, 2003, Centaur filed two additional administrative actions with the Commission regarding increasing
the number of live race days at Rosecroft Raceway and obtaining free market
simulcasting. To date, none of these administrative actions have been resolved.
On October 27, 2003, Centaur filed the present declaratory action against Cloverleaf seeking
a determination as to whether the Agreement remains in full force and effect
(hereinafter referred to as the Indiana Action). At issue was whether Cloverleaf
may retain a $2,500,000.00 deposit that Centaur made to it to secure purchase
of the racetrack and whether the Agreement terminated as a result of Centaurs
failure to close on or before November 1, 2003. On October 30,
2003, Cloverleaf moved to dismiss the Indiana Action for lack of personal jurisdiction
and on grounds of forum non conveniens.
See footnote Before the Indiana Action was
resolved, on November 24, 2003, Cloverleaf filed a similar declaratory action in the
Maryland Circuit Court (hereinafter referred to as the Maryland Action). In the
Maryland Action, Cloverleaf moved for an aggressive trial schedule and immediate resolution of
the litigation. In response, Centaur moved to dismiss the Maryland Action on
the principle of comity for the Indiana Action, which the Maryland trial court
denied. The Maryland court also scheduled a trial on the merits for
March 1, 2004.
Meanwhile, on January 23, 2004, the Indiana trial court denied Cloverleafs motion to
dismiss, finding that it had personal jurisdiction over Cloverleaf and that the Indiana
Action should not be dismissed on the basis of
forum non conveniens.
On January 29, 2004, Centaur filedin the Indiana Actiona motion to enjoin Cloverleaf
from prosecuting the Maryland Action. On February 6, 2004, Centaur filed a
verified motion for temporary restraining order prohibiting Cloverleaf from prosecuting the Maryland Action,
which the Indiana trial court granted on February 11, 2004.
On February 12, 2004, the administrative judge of the Maryland trial court sent
a letter to the Indiana trial court, via facsimile, which provides, in pertinent
The purpose of this letter is to advise you that your order of
February 11, 2004 is null and void as far as its legal effect
over proceedings in a Maryland court of general jurisdiction. Maybe you have
good reason for staying the proceedings in your jurisdiction, but the reasons are
not articulated in your memorandum opinion. Therefore, I have instructed [the presiding
judge] to proceed with whatever hearing, conference, or anything else she has scheduled
in the case.
Id. at 195. In response, on February 12, 2004, the Indiana trial
court sent the following communication to the Maryland trial court:
Discussion and Decision
. . . I would submit to you that a careful reading of
my February 11, 2004 order would inform you that the Temporary Restraining Order
was directed to the parties in the Indiana [Action,] and not to the
Maryland Court or to Maryland attorneys.
Id. at 197.
On February 17, 2004, the Maryland trial court notified the parties in the
Maryland action that the Indiana order has no jurisdiction in Maryland and, thus,
it expected the parties to be present at the upcoming Maryland hearing.
Also on that date, Cloverleaf filed its pretrial statement and designation of rebuttal
expert in the Maryland Action, in violation of the Indiana temporary restraining order.
On February 18, 2004, the Indiana trial court scheduled a hearing on
Centaurs petition to hold Cloverleaf in civil contempt for violating the temporary restraining
order, which has since been deferred.
On February 20, 2004, the Indiana trial court conducted a hearing on Centaurs
motion for preliminary injunction. Five days later, the Indiana trial court granted
Centaurs motion for preliminary injunction, enjoining Cloverleaf from participating in the Maryland Action.
Subsequently, the trial court clarified that the injunction order enjoins Cloverleaf and
Centaur from taking any affirmative action against the other party in the Maryland
See footnote This appeal by Cloverleaf ensued.
I. Anti-Suit Injunction
On appeal, Cloverleaf argues that the trial courts grant of the anti-suit injunction
at issue, which enjoined it from pursuing the Maryland Action, constituted an abuse
of discretion. The issue regarding whether an Indiana trial court has the
discretion to enjoin non-citizen parties, over whom it has jurisdiction, from litigating a
similar issue in a sister courtand, if so, the extent to which such
discretion should be exercisedappears to be a novel issue in Indiana. In
Pitcairn v. Drummond, 216 Ind. 54, 56, 23 N.E.2d 21, 22 (1939), our
supreme court recognized that the courts of this state have power to restrain
citizens of this state, or other persons within the control of their process,
from the prosecution of suits in other states or in foreign countries, when
the prosecution of such suits in such jurisdictions is contrary to equity and
good conscience. See also Kern v. Cleveland, C., C. & St. L.
Ry. Co., 204 Ind. 595, 700, 185 N.E. 446, 447 (1933).
Some years later, in Abney v. Abney, 176 Ind. App. 22, 374 N.E.2d
264 (1978), cert. denied, 439 U.S. 1069 (1979), another panel of this Courtwhich
was confronted with the inverse procedural posture to the case at baraddressed the
propriety of an anti-suit injunction and held that Indiana courts were not required,
under the doctrines of comity or full faith and credit, to refrain from
exercising jurisdiction over the plaintiffs petition despite the fact that a Tennessee court
had enjoined the plaintiff from maintaining a divorce action in Indiana. Id.
at 30, 374 N.E.2d at 269. There, the wife filed for and
obtained a separate maintenance decree from a Tennessee probate court. Id. at
24, 374 N.E.2d at 266. After entertaining successive divorce petitions from the
husband, the Tennessee court held him in contempt and barred him from requesting
an absolute grant of divorce. Id. at 25, 374 N.E.2d at 266.
Subsequently, the husband filed a dissolution of marriage petition in the Indiana
trial court and, in response, the wife urged the trial court to defer
to the Tennessee court. Id. However, the Indiana court refused to
defer and, eventually, the Tennessee court issued a restraining order barring the husband
from pursuing a dissolution of marriage in any other jurisdiction, particularly Indiana.
Id. at 26, 374 N.E.2d at 266. After discussing principles of comity
and full faith and credit, the Abney court held that the Indiana court
was not required to honor the Tennessee anti-suit injunction. Id. at 30,
374 N.E.2d at 269.
More recently, in Hoehn v. Hoehn, 716 N.E.2d 479, 481-82 (Ind. Ct. App.
1999), another panel of this Court affirmedwithout discussing the principles of anti-suit injunctionsthe
trial courts order restraining the respondent in a divorce action from proceeding with
the litigation that he had initiated in a Georgia court. There, although
the parties had been divorced in Georgia, the trial court found that Indiana
has exclusive and continuing jurisdiction over the parties, pursuant to Indiana Code Section
31-18-6-11(d), because it had modified the Georgia child support order.
See footnote The
court also found that the respondent was estopped from arguing that the trial
court did not have personal jurisdiction over him because he sought affirmative relief
in the Indiana court on several occasions and failed to appeal an adverse
ruling on his motion to dismiss for lack of personal jurisdiction. Id.
Although these Indiana precedents are instructive, they do not squarely address the issue
before us, nor do they delineate the appropriate standard of appellate review for
anti-suit injunctions. However, we find guidance in the doctrine of comity, the
policies underlying anti-suit injunctions, and the other jurisdictions that have addressed the issuance
of such injunctions.
It is axiomatic that state courts have the power to enjoin litigation in
sister state courts under the doctrine of comity. James P. George, Parallel
Litigation, 51 Baylor L. Rev. 769, 781 (1999) (citing Christensen v. Integrity Ins.
Co., 719 S.W.2d 161, 163 (Tex. 1986)). Indeed, under principles of comity,
Indiana courts may respect final decisions of sister courts as well as proceedings
pending in those courts. See George S. May Intl Co. v. King,
629 N.E.2d 257, 260 (Ind. Ct. App. 1994), rehg denied, trans. denied.
However, comity is not a constitutional requirement to give full faith and credit
to the law of a sister state, but it is a rule of
convenience and courtesy. Am. Economy Ins. Co. v. Felts, 759 N.E.2d 649,
660 (Ind. Ct. App. 2001). The doctrine of judicial comity represents a
willingness to grant a privilege, not as a matter of right, but out
of deference and good will. Its primary value is to promote uniformity
of decision by discouraging repeated litigation of the same question. State of
Fla. ex rel. OMalley v. Dept of Ins., 155 Ind. App. 168, 176-77,
291 N.E.2d 907, 912 (1973).
Most of our sister jurisdictions that have confronted the issuance of anti-suit injunctions
follow a somewhat restrictive approach in granting such injunctions, i.e., an approach that
places a premium on preserving international comity. Under this approach, a
are appropriate in four instances: (1) to address a threat to the
courts jurisdiction; (2) to prevent the evasion of important public policy; (3) to
prevent a multiplicity of suits; or (4) to protect a party from vexatious
or harassing litigation. Golden Rule Ins. Co. v. Harper, 925 S.W.2d 649, 651
(Tex. 1996) (citing Gannon v. Payne, 706 S.W.2d 304, 307 (Tex. 1986)), rehg
overruled; see also University of Tex. v. Morris, 344 S.W.2d 426, 428 (Tex.
1961) (holding that a district or trial court having jurisdiction of the parties
and the subject matter may enjoin a party from prosecuting a cause of
action in another court when such relief is necessary to prevent a multiplicity
of suits, avoid vexatious litigation, or prohibit the use of the judicial processes
for purposes of harassment), cert. denied, 366 U.S. 973 (1961). These jurisdictions
caution that anti-suit injunctions should be used sparingly and granted only with care
and great restraint because their exercise represents an indirect challenge to the dignity
and authority of that tribunal. Pfaff v. Chrysler Corp., 155 Ill.2d 35,
43, 610 N.E.2d 51, 55 (1992); Gannon, 706 S.W.2d at 306.
By contrast, other jurisdictionsi.e., some federal circuitsissue anti-suit injunctions more liberally. These
courts place less importance on the doctrine of comity and, instead, focus upon
whether the duplicative litigation is vexatious.
See, e.g., Seattle Totems Hockey Club,
Inc. v. National Hockey League, 652 F.2d 852, 856 (9th Cir. 1981), cert.
denied, 457 U.S. 1105 (1982); Kirby v. Norfolk Southern Railway Company, 71 F.
Supp.2d 1363, 1367 (N.D. Ga. 1999). In these jurisdictions, a duplication of
the parties and issues, alone, generally suffices to justify issuing an anti-suit injunction.
Seattle Totems, 652 F.2d at 856.
Against this backdrop, we now consider Cloverleafs argument that the Indiana trial court
erred by granting Centaurs petition for anti-suit injunction. In so doing, we
find the rationale behind the restrictive approach to be very persuasive and in
keeping with our Indiana precedents, which hold that Indiana courts have the power
to restrain persons within the control of their process from the prosecution of
suits in other states or in foreign countries,
when the prosecution of such
suits in such jurisdictions is contrary to equity and good conscience. See,
e.g., Kern, 204 Ind. at 600, 185 N.E. at 447. In fact,
we agree with other jurisdictions that an
anti-suit injunction is the most controversial
of the remedies for parallel litigation because, even though the injunction is against
the party, not against the sister state, it interferes with another courts power,
often in another state or country.
Id. Accordingly, in determining the
appropriate standard of appellate review, we note that the standard of review for
the grant or denial of a request for an injunction, including an anti-suit
injunction, is abuse of discretion. Ind. Family & Soc. Servs. Admin.
v. Walgreen Co., 769 N.E.2d 158, 161 (Ind. 2002) (discussing preliminary injunctions).
In determining whether to grant a preliminary injunction, the trial court is required
to make special findings of fact and state its conclusions thereon. Barlow
v. Sipes, 744 N.E.2d 1, 5 (Ind. Ct. App. 2001) (citing Ind. Trial
Rule 52(A)), trans. denied. When findings and conclusions are made, we
must determine if the trial courts findings support the judgment. Id.
We will reverse the trial courts judgment only when it is clearly erroneous.
Id. Findings of fact are clearly erroneous when the record lacks
evidence or reasonable inferences from the evidence to support them. Id.
A judgment is clearly erroneous when a review of the record leaves us
with a firm conviction that a mistake has been made. CSX Transp.,
Inc. v. Rabold, 691 N.E.2d 1275, 1277 (Ind. Ct. App. 1998), trans. denied.
We consider the evidence only in the light most favorable to the
judgment and liberally construe findings in favor of the judgment. Barlow, 744
N.E.2d at 5. Moreover, [t]he 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
In addition, to obtain a preliminary injunction, the moving party has the burden
of showing by a preponderance of the evidence that:
(1) [movants] remedies at law were inadequate, thus causing irreparable harm pending resolution
of the substantive action;
(2) it had at least a reasonable likelihood of success at trial by
establishing a prima facie case;
(3) its threatened injury outweighed the potential harm to appellant resulting from the
granting of an injunction; and
the public interest would not be disserved.
Roberts Hair Designers, Inc. v. Pearson, 780 N.E.2d 858, 863 (Ind. Ct. App.
2002) (quoting Walgreen, 769 N.E.2d at 161). The movant must prove each
of these requirements to obtain a preliminary injunction. Pearson, 780 N.E.2d at
Once the threshold requirements for a preliminary injunction have been met, an anti-suit
injunction is appropriate only in circumstances where the foreign litigation would: (1) threaten
the issuing courts in rem or quasi in rem jurisdiction; (2) frustrate a
policy of the forum issuing the injunction; (3) prevent a multiplicity of suits;
and (4) be vexatious or oppressive. See Seattle Totems, 652 F.2d at
855. Additional factors that the trial court may consider include whether separate
adjudications could result in inconsistent rulings or a race to judgment, and whether
adjudicating the issue in two separate actions is likely to result in unnecessary
delay and substantial inconvenience and expense to the parties and witnesses. Id.
In the present case, the Indiana trial court enjoined Cloverleaf from pursuing the
declaratory action that it had filed in the Maryland Action. In so
doing, the trial court found, in pertinent part, that: (1) Cloverleafs continued prosecution
of the Maryland Action will cause Centaur irreparable harm through the needless hardship,
inconvenience, and expense of having to litigate the Agreement in two different jurisdictions
and, therefore, there is no adequate remedy at law for such injury; (2)
Centaur has established a reasonable likelihood of success on the merits because the
three administrative actions filed by Centaur constitute pending challenges under the Agreement; (3)
the harm to Centaur if the injunction is denied outweighs the risk of
harm to Cloverleaf if such injunction is granted; and (4) the injunction does
not disserve the public interest.
However, our review of the record reveals that the only injury, irreparable or
otherwise, that Centaur may suffer if Cloverleaf is allowed to pursue the Maryland
Action is economic in nature and, as such, does not merit injunctive relief.
See Walgreen, 769 N.E.2d at 162 (holding that a party suffering mere
economic injury is not entitled to injunctive relief because damages are sufficient to
make the party whole). Should Cloverleaf be allowed to prosecute the Maryland
Action, for example, Centaur will be forced to expend the resources necessary to
participate in such Action. However, such expenses will be purely economic in
nature. In addition, Centaur may not demonstrate irreparable harm merely by suggesting
that the Maryland Action may proceed to a judgment sooner than the Indiana
Action and, thus, be entitled to full faith and credit by the Indiana
trial court. Rather, to prove irreparable harm, Centaur must show that the
Maryland court is biased or likely to misconstrue the governing law at issuei.e.,
Our review of the evidence further demonstrates that Centaur has failed to prove
that its harm, if the injunction is denied, outweighs the risk of harm
to Cloverleaf if such injunction is granted. This failure of proof is
especially acute where the underlying dispute involves a Maryland limited liability company and
corporation, Maryland real estate, Maryland law, and the Maryland racing commission. Finally,
we cannot say that the anti-suit injunction in this case has served the
public interest. Accordingly, the Indiana trial court abused its discretion by granting
the anti-suit injunction in favor of Centaur.
Moreover, we note that, here, many factors favor the denial of Centaurs petition
for the anti-suit injunction. Specifically, the Maryland Action at issue does not
threaten Indianas jurisdiction nor does it frustrate Indiana policy. To the contrary,
apart from the ties to Indiana through Centaurs parent corporation, the Maryland Action
involves Maryland citizens, real estate, and law, and does not infringe in any
way upon Indianas jurisdiction or public policy to protect its citizens. In
addition, other than Centaurs bald assertions,
there has been no showing that Cloverleafs
pursuit of the Maryland Action was vexatious or oppressive. Further, Centaur has
failed to demonstrate that the anti-suit injunction was necessary to prevent a multiplicity
of suits. Indeed, t
he Texas Supreme Court has observed that a single
parallel proceeding in a foreign forum does not constitute a multiplicity of suits.
, 925 S.W.2d at 651
For the foregoing reasons, we reverse the trial courts grant of the anti-suit
SHARPNACK, J., and MAY, J., concur.
We hereby deny Cloverleafs motion for oral argument.
Cloverleaf also contends that the trial court erred by failing to require
Centaur to post a preliminary injunction bond. However, because of our resolution
of the first issue, we do not address this issue.
Centaur was created as a Maryland entity in connection with the transaction
at issue in this case. Centaurs parent corporation is Centaur, Inc., which
is an Indiana Sub-S corporation. In its appellees brief, Centaur argues that
its principal place of business is located in Indianapolis. However, our review
of the evidence reveals that it is Centaurs parent corporation, not Centaur, which
maintains a principal place of business in Indiana and that Centaur is organized
under the laws of the State of Maryland but that the controlling members
of the limited liability companies that control [Centaur] are citizens of Indiana.
Appellees App. at 29.
Article 8, Section 8.8, which governs Centaurs conditions precedent, provides as follows:
Permits and Licenses. [Centaur] shall have received (a) Regulatory Approval, and (b)
such other Permits as are necessary to allow [Centaur] to operate the Racetrack
from and after the closing.
The failure of any of the foregoing conditions precedent of [Centaur] shall not
entitle [Centaur] to a refund of the Deposits, or any portion thereof.
Notwithstanding the immediately preceding sentence, or anything to the contrary herein contained, [Centaur]
shall not be limited or restricted from fully pursuing the remedies available to
[Centaur] in Section 3.3 and Article 11 below.
Appellants App. at 161.
The Latin translation of
forum non conveniens is an unsuitable court.
Blacks Law Dictionary 665 (7th ed 1999). Forum non conveniens is the
doctrine that an appropriate forum even though competent under the lawmay divest itself
of jurisdiction if, for the convenience of the litigants and the witnesses, it
appears that the action should proceed in another forum in which the action
might originally have been brought. Id.; see also Ind. Trial Rule 4.4(C),
(D) and (E).
Although the Indiana Action involves Maryland litigants, Maryland real estate, Maryland law,
and the Maryland Racing Commission, the Indiana trial court found that it has
general and specific personal jurisdiction over Cloverleaf. Apparently, Cloverleaf did not appeal
this determination, nor did it appeal the trial courts denial of Cloverleafs motion
to dismiss on the basis of
forum non conveniens.
The parties represent in their briefs that the Maryland trial court has
since stayed the Maryland Action.
Footnote: Indiana Code Section 31-18-6-11(d) provides that: Upon the modification of a
child support order issued in another state, an Indiana tribunal becomes the tribunal
of continuing, exclusive jurisdiction.
Footnote: In its appellees brief, Centaur maintains that Cloverleaf trie[d] to derail the
Indiana lawsuit by: (1) filing a motion for change of judge; (2) attempting
to remove the cause to federal court; and (3) delaying in responding to
discovery requests. Appellees Br. at 7-8.