### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE January 2000 Session SOUTH CENTRAL TENNESSEE RAILROAD AUTHORITY, ET AL 

### . v.

ANDRE HARAKAS, ET AL 

### . Direct Appeal from the Chancery Court for Hickman County No. 97131978 Donald P. Harris, Chancellor

No. M1999-00567-COA -R3-CV - Filed August 9, 2000

Plaintiffs, the owner and lessee of propert y on which a railroad track was located, obtained a temporary injunction prohibiting Defendants, owners of adjacent property, from building a house
on what Plaintiffs alleged was their right-of-way. After Defendants presented evidence that Plaintiffs possessed only an easement as needed for railroad operations,

rather than a right-of-way, the court dissolved the temporary injunction and denied a permanent injunction. Defendants then filed a motion to assess da mages and enfor

ce liability

of surety on injunction bond pursuant to Tenn. R. Civ. P. 65.05, seeking recovery for the losses resulting from the i ssuance of the temporary injunction. Defendants appeal the trial court's denial of their motion. We reverse. Tenn. R. App. P. 13 Appeal as of Right; Judgment of the Chancery Court Reversed and Remanded

P ATRICIA J. C OTTRELL , J., delivered the opinion of the court, in which WILLIAM C. K OCH , J R ., and W ILLIAM B. C AIN , JJ ., joined.

H.E. Miller, Jr., Gallatin, Tennessee, for appellants An dre Harakas, Sa

ra Harakas, Cyn

thia Louise Vernon, and Louise Miner.
WilliamLandis Turner, Hohenwald, Tennessee, for appellees South Central Tenne ssee Railroad Authority and South Central Railroad Company.1 The parties agre ed below that

the proper defendants were Andre Harakas, Sara Harakas, Cynthia Vernon, and Louise Miner. The gro up of defendants, now a ppellants, will be ref erred to as “the Harakases” throughout this opinion.
2 OPINION
The appellants, the H

arakases, 1 seek re vi ew of the trial court’s denial of their post-trial motion, made pursuant to Tenn. R. Civ. P. 65.05 , to assess damages and collect upon an injunction bond which had bee n posted by the appellees, South Central Tennessee Railroad Authority (the “Authority”) and South Central Tennessee Railroad Company (the “C ompany” and, collectively, "the Railroads") . In the underlying action, the Hara kases were enjoined, upon the Railroads' motion, from continuing construction o n a house t hey had begun building sixty feet fr om the center of a railroad track owned by the

Authority and leased to the Company. The Har akases assert

that they incurred damages from the four and a half month

delay in construction and were wrongfully enjoined from an act they had a right to perform. Although neither pa rty has appealed the ju dgment in the underlying

action, the facts of that dispute must be examined in considering th

e issues raised in

this appeal.

In November

of 1997, the Harakases were building a house on real property they owned. The property adjoined land o wned by

the Railroads around their railroad track. On November 10, the Railroads filed a complaint in which they claimed to own a right-of-way , extendi ng one hundred (100) feet from the centerline of the track. The

y alleged that the Haraka

ses’ construction, bei

ng only sixty (60) feet fr o m the centerline, encroached on their right-of-way. They further alleged that the Harakases’ “violation of Plaintiffs’ pro perty rig hts is willful, intent

ional, and gross , they being fully informed of the facts concerning the property a nd the rights of the parties therein.”
Basedupon this complaint, the Railroads obtained a temporary restra ining order ("TRO") prohibiting the Harakases from further construction on the ho use or other encroachment on the right-of-way the Railroads claimed. The court required the Railroads to post a $5,000 injunction bond. That bond, wit

h ha ndwritten corre

ctions by the

surety, cou

nsel for the Railr

oads, read in pertinent part:
The condition of this

obligation is that the principal(s) will prosecute the temporary restraining order with effe ct, or in case

of failure, pay all costs that may be a djudged against the defendant(s), and all such damages as may be sustained by the defendant(s) caused by the wrongful suing out of the temporary restraining order.

A hearing on the application for temporary injunction was held on November 25. The trial court made preliminary findings that (1) the Authority was "the owner , in fee, of a strip of land running ninety (90) feet in width f rom the cent erline of the ra ilroad track and

lying betw

een said centerline andthe land acquired by Defendant in Deed Book 55, at pag e 433, ROHCT;" and (2) the Railroads were entitled to t he temporary

injunction rest

ra ining the Harakases from building any permanent struc

ture encroach

ing upon “said str

ip of land.” The bo

nd remained in ef

fect.2 The Railroads reli ed upon notations ac

companying rail

road maps. The not

ation f or the re levant parcel st

ated, “Charter wid th claimed un der decisio ns of Tenn essee Co urts.”

3 The trial court relied upon Railroad Co . v. Telford’s Executors , 89 Tenn. 292 (Tenn. 1890 ). 3 The Harakases moved to dissolve the temporary injunction on January 9, 1998. Their motion
was s upp ort ed b y an af fid avi t of Kare n Du tto n, a tit le e xam ine r. A fte r tr aci ng th e ti tle his tor y o f the real property

on which the house

was being built,

the title examiner attested that no right-of-way hadbeen con veye d to the Railr oads by the H

arakases’ pre

decessors in title . The deed orig inally reliedupon by

the Railroads was determined by the examiner not to be applicable to the property in dispute. The trial

court denied this m

otion, but noted that

the matter should

be set for trial as soon as possible. At the March 18 trial, the parties stipulated to the relevant facts, and argument was had on the law. The parties stipulated t hat the rail

road track had been in its present location since before 1900. They further stipulated that there was no record that a right-of-way on the property where the house was being constructed had been conveyed by deed to any of the Ra

ilroads’ predec

essors in interest or to the Railroads. In addition, the parties stipulated that there was no

record of any

lawsuit by the Authority or its predecessors in interest seeking to condemn such rig

ht-of-way or any laws

uit by th e Har akas es' p rede cess ors in i nte res t se eki ng co mpe nsa tio n fo r th e ta kin g of a righ t-o f-wa y.
Faced with this inability

to prove ownership

of the right-of-way as originally asserted, at trial the Railroads took the position that the right-of-way originated in the Charter of the Nashville and Tus caloosa

Railroad Company dated June 6, 1877. 2 That Charter authorized the railroad " t o appropriate

as an eas ement the right-of-way not exceeding two hundred fee t, one hundred feet on each side of the center l ine of said road," to be e xercised b y filing a lawsuit. No such lawsuit was ever filed, however.
The Harakases acknowledged that the Railroads ha d a prescriptive

easement based u

pon their long use of the track, but argued that such easement would extend only approximately ten

(10) feet
on either side of the center line of the track, which they claimed was the only amount of land obviously used for the operation of the train.
The trial court determined that, regardless of the size of any easement right-of-way which the Railroads might hold

under their Charter, the Harakases, as owners in fee of the property on which the house was being constructed, were entitled to use their

property in any way

that did not interfere withthe use

of the property for railroad purposes. 3 Based upon this holding and its finding that “the house in issue is located so that it does not interfere with thecurrent operation of the railroad," the court held that the Harakases could "build a house on their property even if it is on the easement of the Pl aintiffs, s o long as the house does not interfere with the present or future operations of the railroad." The court dissolve d the temporary injunction, denied the Railroads' request for a permanent injunc

tion, and ordere

d the parties to br

ief the issue of the

size of the easeme

nt.4

In its final order on this issue, the trial court found that the Railroads had "an easemen t right-of-way

across the property of the defendants to the extent needed for ra ilroad operations,

not to exceed 100 feet on either s ide of the center line of the track." The court further found that the Harakases’ house construction “has not and will not interfere with the operations of the railroad as it presently e

xists” and denied the

Railroads’ request

for an injunction. This ruling was not contested by any party to this a

ction and is not at iss

ue in this appeal.
Whatis at issue, however, is the trial court’s ru ling on the Harakases’ motion to enforce liability of surety on injunction bond. This motion, filed pursuant to Tenn. R. Civ. P. 65 and 65A, sought recovery of costs and damages resulting from the issuance of the TRO and the temporary injunction. It

alleged that the

Harakases had i

ncurred costs

and damages in excess of the amount of the surety bond. An affidavit filed later in support of the motion stated that the defendants had incurred expenses exceeding $5,000 as a result of the issu ance and extensio n of the TRO. These expenses included $4,650 in attorney's fees and reporter's fees, $1,000 in interest on a construction l oan from the date the TRO was issued to the date the preliminary injunction was dissolved, and $2,250 for loss of use

of the house for four and one half months. The Harakases requested an order requiring the surety t

o pay the fa

ce amount of the bo

nd. Sara Haraka

s later filed a se

cond affidavit in November 1998, attesting that the defendants had incurred an additional $6,740 in construction costs due to the delay caused by the issuanc e of the TRO and the temporary injunction. The trial court denied the Harakases' request for damages. I t stated: [T]he court is of the opinion that becau se th e defendants were constru cting a dwelling upon the right-of-way owned by plaintiff for the purpose of op erating a railroad, obtain

ing a temporary

restraining or

der until such time as the rights of the parties could be litigated was not wrongful.
The Harakases argue that because the facts did not warrant the issuance of the injunction and they at all times had the right to perform the enjoined act, they were wrongfully restrained within the meaning of Rule 65.05(1) and, therefore, were entitled to the injunction bond as damages.
Tenn. R. Civ. P. 65.05 s

tates: Injunction

Bond. (1) Except in such actions as may be brought on pauper' s oath, no restraining order or tempora ry injunctio

n shall be granted except upon the giving of
a bond by the a

pplicant, with sure

ty in such sumas the court to whom the application is made deems proper, for the payment of such costs and damag es as may be incurred
orsuf fered by any per

son who is found to have been wrongfully restrai ned o r enjoined. The address of the surety shall be shown on the bond.
The plain language of the rule establishes that the purpose of requiring a bond as a condition precedent to the issuance of

a restraining order or preliminary injunction is "to provide a me

chanism for reimbursing an

enjoined party

for harm it suffers as a result of an improvidently issued injunction4 Although few Tennessee cases interpret Tenn. R. Civ. P. 65.05’s “wrongfully enj oined” language, cas es construing the law prior to the 1971 adoption of the Rules recognize the court’s discretion to impose injunct ion bonds
as a prerequ isite to obtaining an injunction

. See, e.g., H ubbard v. Fravell , 80 Tenn. 304 (1883); Newell v. Porter , 29 Tenn. 325 (184 9). Then, as now, the pu rpose of the bond was to compensa te for damages a rising f rom the wrongful issuance of an injunctio n. See Tenn. R. Civ. P. 65.05; Russel l v. Tennessee &

Kentucky Tobacco Co. , 89 S.W.2d 907, 910(T enn. Ct. Ap p. 1935 ); Smith v. Ruohs , 58 S.W. 1101, 110 6 (Tenn. Ch. App. 1900).

5 Federal R ule of Civil Pr ocedure 65(c) pro vides: No restra

ining or der or prel

iminary injunct ion shal l issu e except upon the gi

ving of securities by the applicant, in such sum as the court deems proper, for the payment

of such costs

and damages as may be incurr ed or suff

ered by any

party wh

o is foun d to have been

wrongful

ly enjoi ned or rest

rained.

5 or restr aini ng order." Hoechst Diafoil Co. v. Nan Ya Plastics Corp., 174 F.3d 411, 421 (4th Cir. 1999). “In order to

recover in

an action on an inju

nction bond, the de

fendant in the original injunction suit need only show that he was wrongfully restrained or enjoined.” Taylor v. Morris , No. 01A01- 9804-CH- 00211, 1999 WL 675138 at *3 (Tenn. Ct. App. Sept. 1 1999) (no Tenn. R. App. P. 11 application filed) (citing Tenn. R. Civ. P. 65.05.) At issue here is whether the Harakases were "wrongfully

restrained or e

njoined" within

the meaning of Rule 65.05. Few Tennessee cases address this issue. 4 In Holder v. Clesor , No. 01A01-9702-CV-00080, 1997 WL 528817 (Tenn. Ct. App. Aug. 27, 1997) (no Tenn. R. App. P. 11 application filed), this court considered the trial court's dismissal of a motion for summary judgment filed by def endants seeking damages resulting from the issuance of an injunction which had previously been reversed by this cour t. In the portion of that opinion relevant to the issue here, this court commented that its original reversal of the injunction had been basedon a failure of proof on the part of the plaintiff, “thus resulting in thewrongful issuance of the injunction.” This court further stated:

In the case before us, the trial court issued an injunction upon plaintiff posting an injunction bond as required by Tenn. R. Civ. P. 65.05. It was determined that the facts did not warrant the issua nce of the inj unc tion; therefore, the injunction was wrongfully issued. (emphasis added).
Holder , 1997 WL 528817 at *2.
This language fr

om Holder

is consistent with cases interpreting Fed. R. Civ. P. 65(c), which is essentially identical

to the Tennessee rule. 5 The federal ca ses find that "a p

arty has been wrong

fully enjoinedwithin the meaning of Rule 65(c) when it turns out the party enjoined had the right all along to do what it was enjoi ned from doing." Nintendo of America v. Lewis Galoob Toys , 16 F.3d 1032, 1036 (9th Cir.), cert. denied , 513 U.S. 822, 115 S.Ct. 85, 130 L.Ed.2d 37 (19 94); see Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 910 F.2d1049, 1054 (2d Cir.1990) ("A party has been 'wrongfully

enjoined' under

Fed. R. Civ. P. 65(c

) if it is ultimately f

ound that the enjoin

ed party had at all times the righ

t to do the enjoined a

ct."); Division 1, Detroit, Brotherhood of Locomotive Engineers v. Consolidated Rail Corp., 844 F.2d 1218, 1224 (6th Cir. 1988) ("reversal on appeal of
an injunction is tantamount to finding that the enjoined party was 'wrongfully enjoinedor restrained,' and

. . . such reversaltriggers the w rongfully enjoined party

's right to pursu

e recovery

on the security6

bond."); Coyne-Delaney Co. v. Capital Dev. Bd. of Ill ., 717 F.2d 385, 391(7th Cir.1983) (“Most cases hold . . . that a prevail

ing defendant i

s entitled to damag

es on the injunction

bond unless there

is a good reason for not re

quiring the plain

tiff to pay in

the particular c

ase.”); State of A labama ex rel Siegelman v. U.S. Environmental Protection Agency , 925 F. 2d385, 391 (11 th Cir. 1991) (preliminary injunction issued by court later found

on appeal to lack

jurisdiction resul

ted in party

being wrongf

ully enjoined, and trial court

“was obliged to a

ward damages t

o [enjoined defend

ant] unlessgood reasons existed to deny such an award.”). This approach furthers F ederal Rule 65(c)’s underlying purpose. See Hoechst Diafoil Co., 174 F.3d at 421.
The Ninth Circuit ha

s stated that a majo

rity of federal c

ircuits:
hold there is a re

buttable presumption that a

wrongfully enjoin

ed party is entitled to have the bond executed and recover provable damages up to the amount of the bond. See, e.g., National Kidney Patients Ass'n v. Sullivan, 958 F.2d 1127, 1134 (D.C. Cir. 1992) (a “d e fendant injured b y a wrongfully issu

ed preliminary inj unction is presumptively

entitled to recovery on the injunction bond”), cert. denied, 506 U.S. 1049, 113 S.Ct. 966, 122 L.Ed.2d 122 (1993).
Nintendo , 16 F.3d at 1036-37. The Ninth Circuit also expressed its appro val of that p resumption, stating its belief that the rule is sound. By adhering to this standard, the party enjoined will usually recover damages , thus discouraging parties from requesting injunctions based on tenuous legal grounds. See Coyne-Delaney Co. v. Capital Dev. Bd. , 717 F.2d 385, 392 (7th Cir.1983) ("... [th

is test] discoura ges the seeking of preliminary injunctions on flimsy (though not necessarily

frivolous) grounds."). Furthermore, a presumption that damages will be awarded from the bond assur

es district court j u dges that defendants will receive comp ensation for their damages in cases where it is later determined a party was wrongfully

enjoined. See Not e, Recovery for Wrongful Interlocutory Injunctions Under Rule 65(c), 99 Harv. L. Rev. 828, 838 n. 36 (1986). Moreover, demands on judic ial resourc es may be relieved to some extent, because a defendant who can
recover damages against a

preliminary injunc

ti on bon d will be less likely to file a separate malicious prosecution action. See generally Note, Interlocutor

y Injunctions and the Injunction Bond, 73 Harv. L. Rev. 333 (1959). Finally, this standard provides
an equitable means b

y which courts ca

n decline to impose

damages on the rare

party who has lost a case on the merits but nevertheless should not suffer the execution of the preliminary injunction bond.
Id. at 1037.
The Railroads initiated this action and obtained a temporary restrainingorder on the basis of
a complaint in

which they asserted the Harakases were encroaching on a right-of-wa y owned by the Railroads and that the Harakases were willfully violating the Railroads’ property rights, “they being fully informed of the facts concerning the property.” The Railro ads originally re lied on a deed to6 “The most common des cripti on of the standar d for prelim inary injunction in federal and state courts is a fourfactor test: (1) the threat o f irreparable harm to pla intiff if the injunction is no t granted; (2) the balance between this harm and the injury that grant ing the injunction would infli ct on the defendant; (3) the probabilit

y that plai

ntiff will succe

ed
on the meri ts; and ( 4) t he pu bli c in ter est .” Ro bert Ba nks, Jr.& June F. Entman, Tennessee C ivil Procedure §4-3(l) (1999 ).
7 show their ownership of the purported right-of-way. The Harakases employed a title examiner who found the deed did not cover the land in dispute. The Railroads were unable to find any proof that
a r ig ht-of-way across the Harakases’ land had been obtained by eminent domain. By trial, the Railroads were relying on a notation, “Charter width claimed under decisions of Tennessee courts.” The trial court determined that the Railroads had an easement right-of-way “to the extent needed for Railroadoperations.” It was undisputed that the Haraka se s’ house had not interfered with the operations of the railroad.
Basedupon these facts,

it seems clear

that the TRO and the temporary injunction were granted
on the basis of allegations which were later shown to be inaccurate. Because t he house has never encroached

upon any existing pr

operty interest of the Railroads, the Harakases were always entitled to build the house on th

eir land. Further

, it is difficult to se

e how the Railroads f

aced the threat of irreparable ha

rm since, if they h

ad successfully

proved their property interest as they alleged it, the Harakases could have been forced to remove the house. Therefore, we conclude the Harakase s were wrongfully

enjoined or restrained within the meaning of Rule 65.05. Accordingly, the trial court's decision not to award damages arising from the injunction is reversed.
We do not read Holder

or the federal cases as holding that every pre liminary injunction which is subsequently dissolved constitutes a wrongfully issued injunction within the meaning of Tenn. R. Civ

. P. 65.05, and we do not so hold. Whether a party has been wrongfully restrained can be determinedby the facts in each case and, in part, by reference to the criteria for the issuance of a temporary

injunction, such as

those set forth in T

enn. R. Civ. P. 65.04(

2):
A temporary injunction may be gr antedduring the pendency of an action if it is

clearly shown by verified

complaint, affidavit or other evidence that the movant's rights are being or will be violated

by an adver

se party an

d the movant will sufferimmediate andirreparable

injury, loss o

r damage pendi

ng a final judg

ment in the action, or that the acts or omissions of the adverse party will ten d to render such final judgment ineffectual. 6

Situations exist where the initial seeking and issuan ce of a temporary restraining order or temporary

injunction were appropriate, and meet these criteria, but thecourt nonetheles s declines to issue a permanent injunction. The Harakases’ situation is not one of those.
The Railroads make two arguments that the Harakases are not entitled to damages or to collect
on the injunction bond. The first is that the Railroads agreed to lift the injunction so longas its one hundred(100) foot easem ent was recogn

ized. The Railroad

s’ contention i n this regard can be considered

an argument that any damages suffered by the Harakases due to the delay were not caused7 See Buhl v. U.S. Spr int Communicati

ons Co. , 840 S.W.2d 904 , 909 (Tenn. 1992) ("An easement merely gives to a railroad

compan y a right-of-way in the lan d -- that is, the right to use the land for its pu rposes. This includes the right to employ the land taken for the purposes of constructing, maintaini

ng, and operating

a railroad th

ereon. Under this right, t

he company has the f

ree and perfect

use of the surface of the l and so far as is necessary for all its purposes, and the right to use as much ab ove and b elow the surfac e as may be needed . . . . The forme r proprieto r of the soil still retains the fee of t

he l and and his right

to the land f

or every purpose not incompatible wi th the rig

hts of the railroad compa ny.”). 8 by the injunction. See Diversified Equities, Inc. v. Warren , 617 S.W.2d 171, 1 72 (Te nn. Ct. App. 1981) (the only da

mages allowabl

e were those

that pro ximately resulted from the issuance of the injunction). The reco r d shows, however, that the Railroads had no title to the right-of-way, notwithstanding the allegations in their compla int, and were not entitled to the unconditional one hundred(100) foot easement they claimed. 7 The Railroads’ easement right-of-way wa

s limited "to the extent need ed for railroad operations, not to exceed 100 feet on either side of the center line of the track." Therefore, we cannot conclude that the Harakases were under some duty to accept the Railroads’ offer, which

involved agreeing that the Railroads had a greater property interest than they were found to poss

ess, in order to have the injunction dissolved. Moreover, it does not appear that the Railroads made an

y kind of off

er in this regard until the case was tried on March 18, months after the TRO was sought

andissued. Under these circumstances, where damages arose due to the delay
caus ed b y the res tra ini ng or der a nd i nju nct ion , we bel iev e Ru le 6 5.0 5 au tho riz es r ecov ery.
The Railroads further argue that damages are inappropriate bec ause they co mmenced the underlying

action"in the interest of both parties" so that the issue of the wi dth of the right-of-way could be resolved. They also assert that "the injunction was issued as much for . . . [the Har akases'] protection as for

the plaintiffs’."

The Railroads’ c

ounsel stated that: Exceptfor the fact that when this started we did not consider asking for the restraining order as being any

thing against th

eir interest because -- I mean, let's concede for the pointof argument that if it's property that's no t prese ntly being used for railroad purposes they can bu

ilda house on it. But they've got a horrible cloud on the title . .

. Who's going t o buy that hous e or who's going to ever finance a house like that if a railroad can

decide we want to

put a spur there or

water tank there

, or if it's a safety hazard for a house to be that close to the track at this particular location. . .
These arguments ignore

the purpose of Rule

65.05: to reimburse

an enjoined party for harm suffered due to an improvide

ntly requested

and issued injuncti

on. Without question

ing the sincerity of the Railroads’ concern regarding encroac hment on whatit presumed to be its right-of-way, the issue of the use of the land could have been determined in a dec laratory judgme

nt action seeking permanent

injunctive relief without the extraordinary remedy of restraining the Harakases from further constructionduring the pendency of the litigation. Even when faced with evidence that the deedoriginally relied on was not applicable to the land at issue, the Railroads continued to resist the lifting of the injunction. W hile we agree wi

th both the Railroads and the trial court that the Harakases would have been at risk of losing additionaltime and money expended in further construction of the house, once they were put on notice of the Railroads’ claims, we cannot agree that restraining them9

from proceeding in face of those risks was an appropria te burden for the Railroads to undertake for the Harakases’ own good. We cannot agree that prohibiting the Harakases from continuing to build
was in their best interest, but even if it had been, we think the

Harakases wer

e entitled to

make their
own decision regarding their best interests as long as they did not infringe on the Railroads ’ ri ghts
or threaten irreparable harm. The Harakases could just as easily argue that they acted in the Railroads’ best interest in

seeking to have the injunction dissolved while the Railroads risked l

iability
on the injunction bond. In any event, we are not persuaded that the “acting in the othe

r party’s best interest” argument is relevant to the issue of whether a party was wrongfully restrained. Recovery on an injunction bond does not require a showing of bad faith by the party seeking and obtaining the injunction.
The bon d req uirement as a prerequisite for interlocutory injunctions is more than a provision for

securing otherwise recoverable damages incurred by an enj oin ed p art y. Under such traditional tort remedies as an action for malicious pros

ecution or abuse of proce ss, a person who su ffers damage

s as a result of litig

ation may be

unable t o recover because of his inability to make a sufficient showing of the elements of a

tort. The bond required under Rule 65.0 5, therefor e, provides an enjoined party with a
r emedy against the bond itself even though the party who obtained the i njunctio n otherwise had no p ers ona l li abi lit y. . . . Re cov ery ge nera lly do es not require a showing that the party who obtained the injunction acted maliciously or tortiously, but only that the party enjoined was deprived of rights to which he was entitled and the injunction was, the

refore, erron

eous.
Robert Banks, Jr. & June F. Entman, Tennessee Civil Pr ocedure §4-3(l) (1999). In Taylor v. Morris , No. 01A01-9804-CH-00211, 1999 WL 675138 (Tenn. Ct. App. Sept. 1, 1999) (no Tenn. R. App. P. 11 application filed), t his court recently discussed the two types of a ctions available for wrongful injunctions and made clear that in an action on an injunction bond “ the defen dant in the original injunction suit

need only show that

he was wrongfu

lly restrai ned or enjoined,”

distinguishing th

ose elementsnecessary

for recovery from

the requirements applicable to the other type of action. Taylor , 1999 WL 675138 at *3. “The second type of wrongf ul inj unction action is

in the nature of a malicious prosecution action. In order to recover und er this theory, the defendant in the original injunction action must show not only that he was wrongfully re strained or enjoined, but that the plainti ff acted maliciously and without probable cause in seeking the injunction.” Id. (citations omitted). Thus, the fact that the Railroads may have acted in good faith is not sufficient to relieve them of liability in this action on the injunction bond.
Sim ila rly, we cannot accept the Railroads’ contention that the Harakases are entitled to only nominal damages. For this proposition, the Railroads rely solely on Southern Ry. Co. v. Pardue , 123 Tenn. 376, 131 S.W. 862 (1910). In that case, the defendant, who was enjoined from constructing
a building on the lan

d at i ssue, t estified that he discontinued his project due to the commencement of the lawsuit, beca

use he wanted the

title settled before he improv ed the property

. Based on this tes tim ony, this court reasoned that the defendant was not deterre d from building by the injunction,8 See Miss ouri, Kan sas & Texa s Ry. Co. v . Elliott , 184 U.S. 530,539, 22 S.Ct. 446, 450, 46 L.Ed. 673 (190 2); Tullock v. Mulvane, 184 U .S. 497, 5 10, 22 S .Ct. 372, 3 77, 46 L .Ed. 657 (1902) ; Firema n's Fund Ins. Co. v

. S.E.K. Constr. C o., 436 F.2d 1345, 135 2 (10th Cir. 1971). 10 "but by the fact of the adve

rse claim, and by

the suit itself; that

is to say, after he was made aware of the controversy he would not have built, or proceeded further with his building operations, until that controversy

over the title was settled

by decree of the court." Pardue , 123 Tenn. at 379, 131 S.W.2d at 863. Bec ause the wrongfully issued injunction did not cause the damages, the defenda nt was awarded only nominal damages. See id ., 123 Tenn. a t 379, 131 S.W.2d at 863-64. Thus, Pardue simply stands for the well-settled proposition that damages are limited to those actually caused by the injunction

. See Diversified Equities, Inc. , 617 S.W.2d at 172; Widdicombe v . McGuire , 221 Tenn. 601, 608, 429 S.W.2d 815, 818 (1968). Here, the Harakases have presented evidence through Sara Harakas's affidavit that their damages arose from the opera tion of the injunction itself, and not because they chose to cease construction, and they have claimed actual damages. Pardue does not limit their recove

ry to nominal damag

es. Finally, the Railroads contend that attorney’s fees may not be awarded as damages, relying
on Stringfield v. Hirsch , 94 Tenn. 425, 29 S.W. 609 (1895). In that case, our Supreme Court stated:

We think that the analogies of the law, as well as the soundest public policy, demand that counsel fees in suits upon contracts, or for damages for tort

s, or upon attachmen

ts or injunctions, should not be regarded as a proper element of damages, e ven wh ere they are capable of being apportioned so as to show the amount incurred for the attachments

and injunctions as separate and distinct from the other services necessary in the case. It is not sound public policy to placea penalty on the right to litigate; that the d efeated party must pay the fees of counsel for his successful opponent in any case, and especially si

nce it throws wid

e the doo rs of temptation for the opposing partyand his counsel to swell the fees to un due proportions, and, in cases of attachment and injunction, to apportion them arbitrarily between the fees pertaining properly to the attachment and

injunction and those

relating to the mer

its of the case. Stringfie ld, 94 Tenn. at437-38, 29 S.W. at 613. There are no Tennessee cases since Stringfield altering the rule established therein, and the federal courts also decline to award attorney's fees under Fed. R. Civ. P. 65(c). 8 Thus, the Haraka ses are not entitle

d to recover thei

r attorney’s fees from

the injunction bond. However, they have presented

evidence of almost $10,000 in losses arising from the wrongfully issuedinjunction, exclud ing attorney’s fe

es, while the bond was for $5,000. Since we have determined that

the Harakases are entitled to damages resulting from the restraining order and temporary injunction and are entitled to enforce the injunction bond, we remandto the trial court t o determine the pr

oper amount of da

mages. Accordingly, we reverse the trial court's denial of the Har akases’ motion to enforce liability on the injunction bon

d. This case

is remanded for a determination of damages and for such further p roceedings as may be necessary. Costs of this appeal are taxed against Appellees, South Centra l11

Tennessee Railroad Authority andSouth Central Tennessee Railroad Company, for which execution may issue if necessary.

________ __________________________________ _ PATRICIA J. COTTRELL, JUDGE