J-A26011-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

AKATOR CONSTRUCTION, LLC, IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellee

v.

LAGOM, LLC,

Appellant No. 1548 WDA 2015

Appeal from the Order Entered September 10, 2015

In the Court of Common Pleas of Allegheny County

Civil Division at No(s): GD-15-012694

BEFORE: BENDER, P.J.E., RANSOM, J., and MUSMANNO, J.

MEMORANDUM BY BENDER, P.J.E.: FILED JANUARY 04, 2017

Appellant, Lagom, LLC (“Lagom”), appeals from the trial court’s 

September 10, 2015 order granting Appellee’s, Akator Construction, LLC 

(“Akator”), petition for preliminary injunction.1 For the reasons stated 

herein, we vacate the trial court’s order and remand the case for further 

proceedings. 

The trial court has summarized the factual background and procedural 

history of this case as follows:

Akator and Lagom are parties to a Joint Venture 

Agreement dated August 5, 2011, pursuant to which the parties 

agreed to acquire, rehabilitate and resell properties located in 

the City of Pittsburgh and surrounding areas. The parties each 

hold a fifty (50%) percent interest in the Joint Venture[,] and 

____________________________________________

1 The trial court’s order granting Akator’s petition for preliminary injunction 

was dated September 9, 2015, and filed on September 10, 2015. 
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profits and losses are distributed in accordance with those 

percentage interests.

A dispute arose between the parties in early 2015 when 

alleged financial discrepancies were discovered within the 

financial records of the Joint Venture maintained by Akator and 

its accountants. In April[] 2015, Lagom entered into an 

agreement to sell one of the Joint Venture properties. Since the 

property was titled in Lagom’s name only, the proceeds from the 

sale of the property were paid to Lagom. Despite requests by 

Akator, Lagom refused to pay Akator its share of the proceeds 

from the sale or to demonstrate [that] the funds were held in a 

bank account. 

On or about July 23, 2015, Akator filed a Petition for Rule 

to Show Cause as to its Petition for Preliminary Injunction. 

Akator’s petition seeks to have its share of the profits from the 

sale of the property (i.e., $185,000) placed into an escrow 

account not reachable by either party pending resolution of the 

disputes between Akator and Lagom in arbitration. 

Lagom filed preliminary objections in opposition to Akator’s 

Petition for Preliminary Injunction. The primary argument 

offered by Lagom was that this [c]ourt did not have the ability to 

grant the relief requested by Akator because the Joint Venture 

Agreement contained an arbitration provision.

During a hearing on Lagom’s preliminary objections, the 

parties argued the issue of whether a set fund of money could be 

subject to injunctive relief in the form of an escrow given the 

parties’ arbitration agreement. This [c]ourt, after hearing 

argument, denied Lagom’s preliminary objections and ordered 

Lagom to pay $185,000 into an escrow account in the name of 

the Joint Venture requiring joint signatures for disbursement. 

This [c]ourt’s Order was intended to preserve the status quo and 

to ensure the funds would not be dissipated while the parties go 

through the arbitration process.

Trial Court Opinion (TCO), 12/16/2015, at 1-2 (unnumbered pages). 

Following the trial court’s order granting Akator’s petition for 

preliminary injunction, Lagom timely appealed. On appeal, Lagom raises 

four issues for our review:
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1. In granting the preliminary injunction, did the trial court 

err in that the preliminary injunction was issued without 

notice when the status conference and the hearing on the 

injunction was scheduled for September 24, 2015 before a 

different judge?

2. Did the trial court err when it impropery [sic] issued a 

preliminary injunction without a hearing as required by 

Pa.R.C.P. 1531(d)?

3. Did the trial court err when it failed to require Akator to 

post a bond in accordance with Pa.R.C.P. 1531(b) when it 

granted the prepiminary [sic] injunction? 

4. Was there a showing that immediate and irreparable injury 

would result to Akator if the injunction was not granted 

without a hearing? 

Lagom’s Brief at 4 (unnecessary capitalization and emphasis omitted). 

In reviewing whether a preliminary injunction was properly granted, 

this Court has explained:

A trial court has broad discretion to grant or deny a 

preliminary injunction. When reviewing a trial court's grant or 

refusal of a preliminary injunction, an appellate court does not 

inquire into the merits of the controversy, but rather examines 

only the record to ascertain whether any apparently reasonable 

grounds existed for the action of the court below. We may 

reverse if the trial court's ruling amounted to an abuse of 

discretion or a misapplication of law.

A trial court may grant an injunction only if the plaintiff 

seeking that extraordinary remedy establishes a clear right to 

the requested relief. Furthermore, the moving party must 

satisfy the following essential prerequisites: (1) that relief is 

necessary to thwart immediate and irreparable harm which could 

not be remedied by damages; (2) that greater injury will result 

by refusing the injunction than by granting it; (3) that the 

injunction will restore the parties to their status as existing prior 

to alleged wrongful conduct; and (4) that the injunction is 

reasonably suited to abate such activity.
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WPNT Inc. v. Secret Communication Inc., 661 A.2d 409, 410 (Pa. 

Super. 1995) (internal citations omitted; emphasis added).

First, Lagom asserts that the trial court erred by issuing the 

preliminary injunction without providing it with written notice and a hearing.2 

Specifically, it contends that the trial court “improperly ruled on the 

preliminary injunction contrary to the order of court scheduling the matter 

for September 24, 2015[,] and failed to satisfy the procedural requirements 

and safeguards set forth in Pa.R.C.P. 1531[.]” Lagom’s Brief at 18. We 

agree.

Pennsylvania Rule of Civil Procedure 1531 sets forth the following, in 

pertinent part:

(a) A court shall issue a preliminary or special injunction only 

after written notice and hearing unless it appears to the 

satisfaction of the court that immediate and irreparable 

injury will be sustained before notice can be given or a 

hearing held, in which case the court may issue a 

preliminary or special injunction without a hearing or 

without notice. In determining whether a preliminary or 

special injunction should be granted and whether notice or 

a hearing should be required, the court may act on the 

basis of the averments of the pleadings or petition and 

may consider affidavits of parties or third persons or any 

other proof which the court may require.

(b) Except when the plaintiff is the Commonwealth of 

Pennsylvania, a political subdivision or a department, 

board, commission, instrumentality or officer of the 

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2

For ease of disposition, we address Lagom’s first and second issues, stated 

supra, together. These issues pertain to the notice and hearing required by 

our Rules of Civil Procedure before a preliminary injunction can be issued 

and continued. 
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Commonwealth or of a political subdivision, a preliminary 

or special injunction shall be granted only if

(1) the plaintiff files a bond in an amount fixed and with 

security approved by the court, naming the 

Commonwealth as obligee, conditioned that if the 

injunction is dissolved because improperly granted or 

for failure to hold a hearing, the plaintiff shall pay to 

any person injured all damages sustained by reason 

of granting the injunction and all legally taxable 

costs and fees, or

(2) the plaintiff deposits with the prothonotary legal 

tender of the United States in an amount fixed by 

the court to be held by the prothonotary upon the 

same condition as provided for the injunction bond.

***

(d) An injunction granted without notice to the defendant shall 

be deemed dissolved unless a hearing on the continuance 

of the injunction is held within five days after the granting 

of the injunction or within such other time as the parties 

may agree or as the court upon cause shown shall direct.

Pa.R.C.P. 1531 (internal notes omitted).

Based on this Rule, our Court has explained:

[A] court will ordinarily issue a preliminary injunction only after 

written notice and hearing. A preliminary injunction may be 

granted without notice and a hearing only when there exists a 

need for unusual haste so that a clear right may be protected 

from immediate and irreparable injury. In that event, the court 

must make a finding that relief is necessary and must be 

awarded before the defendant can be notified. If the court then 

fails to conduct a hearing within five days, the injunction is 

deemed dissolved.

WPNT Inc., 661 A.2d at 410-11 (citations omitted; emphasis added). 

In WPNT Inc., the trial court “granted [the] appellee’s request for a 

preliminary injunction solely on the basis of the pleadings and arguments of 

counsel. The issuing court refused to conduct a hearing either before or 
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after entering the decree.” Id. at 411. On appeal, this Court explained 

that, although there is “no absolute right” to a hearing, “our rules and our 

case law clearly indicate that a hearing is the preferred procedure. It is the 

rare preliminary injunction that can correctly be denied without a hearing 

and no preliminary injunction can be granted and continued without 

a hearing, whether before or after the initial grant.” Id. (citations, 

quotations, and footnote omitted; emphasis in original). Our review of 

relevant case law reveals that the weight of authority supports the position 

that a hearing should take place in order to establish the factual basis for the 

preliminary injunction.3

____________________________________________

3 See, e.g., Pubusky v. D.M.F. Inc., 239 A.2d 335, 336-37 (Pa. 1968) 

(“We frequently have said that a preliminary injunction should not issue at 

least until the rights of the plaintiff are clearly established. It also is 

fundamental that all of the parties are entitled to a hearing before such an 

injunction should issue.”) (citations and footnote omitted); Bell Fuel 

Corporation v. Cattolico, 544 A.2d 450, 455 (Pa. Super. 1988) (“There are 

numerous cases where the trial court has utilized a procedure ..., cutting 

short a previously scheduled hearing on a preliminary injunction and 

refusing the injunction as a matter of law, where our appellate courts have 

found the decision to be premature and have reversed and remanded for a 

full evidentiary hearing.”); Beck Computing Services Inc. v. Anderson, 

524 A.2d 990, 992 (Pa. Super. 1987) (determining that the trial court “erred 

in failing to hold a hearing on the [a]ppellant’s request for a preliminary 

injunction” and that it “lacked a sufficient factual basis for determining 

whether or not the other prerequisites for injunctive relief were present”); 

Boyd v. Cooper, 410 A.2d 860, 862 (Pa. Super. 1979) (“Thus we conclude 

that the trial judge erred in not completing its scheduled hearing on [the] 

appellants’ request for the purpose of developing a factual basis for the 

requested relief.”). But see Walter v. Stacy, 837 A.2d 1205, 1210 (Pa. 

Super. 2003) (“A hearing simply is not required under the law. We are 

satisfied that the trial court's reliance on the pleadings and the arguments of 

counsel was sufficient to support its determination in this case.”). 
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Further, our Supreme Court has clarified what constitutes a sufficient 

preliminary injunction hearing: “While the testimony at a hearing for a 

preliminary injunction which seeks only to preserve the status of the parties 

until the issue is finally determined need not always be as extensive as that 

at a final hearing, the litigants should not be deprived of their right to 

fully cross-examine all adverse witnesses, nor of the opportunity to 

present testimony which is relevant to the question of whether or 

not the injunction should issue.” Pubusky, 239 A.2d at 337 (emphasis 

added). See also Ogontz Controls Company v. Pirkle, 477 A.2d 876, 

879 (Pa. Super. 1984) (acknowledging that “the hearing on the preliminary 

injunction motion must be one at which both parties are given the 

opportunity to fully cross-examine witnesses and present relevant 

testimony”) (emphasis in original). We have also stated that “[t]he question 

to be determined at this hearing is whether there is an urgent necessity for 

interim relief before the case can be heard on the merits.” Soja v. 

Factoryville Sportsmen’s Club, 522 A.2d 1129, 1131 (Pa. Super. 1987) 

(citation omitted). 

Here, Lagom argues that it was not afforded written notice and a 

hearing, as required by Pa.R.C.P. 1531. In short, Lagom avers that “[t]he 

parties walked in for a preliminary objections argument and – unbeknownst 

to them – walked out with a preliminary injunction.” Lagom’s Brief at 21. It 

states:

[] Akator filed its Petition for Rule to Show Cause and its 

Petition for a Preliminary Injunction on July 23, 2015. It also 
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gave notice indicating that it would appear in Motions Court on 

August 3, 2015, to seek the Rule to Show Cause why the 

preliminary injunction should not be issued. On August 3rd, the 

parties entered into a consent order of court, whereby it 

scheduled deadlines for pleadings and briefs, a date for 

argument on the preliminary objections, in addition to scheduling 

a status-conference before the preliminary injunction [], and 

then ultimately, the hearing date on the preliminary injunction 

request itself. 

September 9th was the scheduled day for argument on the 

preliminary objections. Both parties appeared and presented 

their positions solely on the preliminary objections. The record 

does not support any finding that arguments were made and 

evidence [was] presented on the issue of the preliminary 

injunction. Judge Marmo did not issue a ruling from the 

bench[;] thus[,] the parties had to wait to receive a court order 

in the mail. In spite of the court order scheduling a status 

conference and then the hearing on the preliminary injunction, 

Judge Marmo – on the same day – entered the equivalent to an 

ex parte preliminary injunction against Lagom. This order 

neither required Akator to post a bond nor scheduled a date for a 

hearing on the continuance of the injunction. 

Lagom submits that the arguments on the preliminary 

objections did not meet any criteria for that of a “hearing” ....

Id. at 18-19 (emphasis in original).4 

Indeed, the consent order of court, entered on August 3, 2015, sets 

forth the following schedule:

AND NOW, to-wit, this 3rd day of August, 2015, it appearing 

that a hearing has been set in the captioned matter regarding a 

Petition for Injunctive Relief on 9-24-15 at 1:45 p.m., in order to 

wisely use the scarce time available, it is hereby ORDERED as 

follows:

- Preliminary Objections to be filed by August 14, 2015[;]

____________________________________________

4 We cannot present Akator’s recitation of these events as it did not file a 

brief. 
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- Response to Preliminary Objections to be filed by 

August 19, 2015[;]

- Hearing on Preliminary Objections to be held on 

September 9, 2015 at 10:45 [a.m.].

- Petitioner’s brief on the applicable law must be filed 

with the Motions Clerk within one week of the date 

hereof, i.e., 9-14-2015.

- Respondent’s brief on the applicable law must be filed 

with the Motions Clerk no later than one week before 

the hearing date indicated above, i.e. 9-22-15. 

- Petitioner must draft proposed stipulations of those 

material facts or evidentiary matters which Movant 

believes are not disputed by Respondent and deliver 

them to Respondent no later than one week before the 

aforesaid hearing date. The proposed stipulations are 

not to be filed with the [c]ourt.

- The Respondent may submit additional proposed 

stipulations, if any, to the Petitioner no later than three 

working days before the hearing date. Again, these 

proposed stipulations are not to be filed with the 

[c]ourt. 

The attorneys for the parties shall meet with the Motions 

Judge then sitting, on 9-24-15 at 11:15 [a.m.], for a brief Status 

Conference to discuss possibilities of settlement, evidentiary 

stipulations, scope of the hearing, allocation of available hearing 

time among the parties, and other such matters. Clients need 

not be present. No testimony will be taken on the day of the 

Status Conference.

Trial Court Order, 8/3/2015.5 Accordingly, our review of the record does not 

uncover written notice that the hearing on the preliminary injunction would 

____________________________________________

5 The trial judge that presided over the September 9, 2015 hearing on the 

preliminary objections also entered this scheduling order. 
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occur on September 9, 2015; instead, that hearing was explicitly scheduled 

to take place on September 24, 2015.6

Moreover, we are compelled to also conclude that Lagom was similarly 

deprived of a proper hearing on the preliminary injunction. By granting 

Akator’s petition for preliminary injunction during the September 9, 2015 

argument, the trial court explained that “it was readily apparent [that] the 

only real issue in dispute was whether this [c]ourt could issue a preliminary 

injunction to preserve the status quo considering the arbitration provisions 

of the Joint Venture Agreement.” TCO at 3. It reasoned that “[s]ince this 

[c]ourt concluded it was within its powers to issue the injunction, and the 

parties were afforded ample opportunity to argue their positions, which they 

willingly did at the September 9, 2015 hearing, there was no need for an 

additional hearing on the matter.” Id. at 4. 

Lagom, on the other hand, insists that “[n]o testimony was taken nor 

was any evidence presented. There was no argument on the preliminary 

____________________________________________

6

In response to Lagom’s claim that it did not have notice, the trial court 

explains that “it was clear to both parties that a hearing would be held on 

September 9, 2015[,] and both parties appeared with counsel on such date. 

Also, Lagom had long known that an injunction hearing would occur since 

Akator filed its preliminary injunction petition on July 23, 2015.” TCO at 3. 

We note that such circumstances have not established sufficient notice in 

other cases. See Rosenzweig v. Factor, 327 A.2d 36, 37 (Pa. 1974) 

(determining that preliminary injunction was issued without notice even 

though a complaint had been filed seeking injunction months earlier); In re 

D.G., Jr., 894 A.2d 1290, 1291 (Pa. Super. 2006) (vacating provision that 

was added to an order during a post-hearing discussion without a party and 

his counsel present). 
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injunction. Lagom was arguing preliminary objections challenging the 

sufficiency of Akator’s pleadings.” Lagom’s Brief at 13. It further contends 

that “[a]rguments on preliminary objections cannot be treated as a hearing 

for a preliminary injunction[,]” and “[t]he practical effect of this would 

require that any party should be prepared to bring witnesses and any other 

evidence to any court proceeding on the chance that the [j]udge might 

decide the ‘real issue in dispute.’”7 Id. at 16-17. 

Usually in cases where there are such discrepancies about what 

transpired at a hearing, we would look to the relevant transcript to ascertain 

exactly what occurred. However, no transcript of the September 9, 2015 

____________________________________________

7

Lagom does not specifically identify the evidence or testimony it planned to 

proffer at the preliminary injunction hearing, but instead argues that 

Akator’s petition for a preliminary injunction — on which the trial court relied 

in granting the requested relief — “did not indicate how it calculated the 

$185,000 which it believed it was entitled. This petition did not include any 

discussion of the expenditures of the [Joint Venture], which are required 

under the [Joint Venture] for determining whether there were profits or 

losses. Lastly, this petition did not plead that Lagom was going to be 

insolvent or judgment proof.” Lagom’s Brief at 7; see also TCO at 4. 

Lagom further asserts that Akator did not file its Rule to Show Cause and 

Petition for Preliminary Injunction until “approximately eleven (11) months 

after the complained of conduct occurred[,]” which suggests that Akator 

would not have faced immediate and irreparable injury if the preliminary 

injunction had not been granted. See Lagom’s Brief at 9. Presumably, 

these factual issues would have been addressed and determined at the 

preliminary injunction hearing. We also note, pursuant to the scheduling 

order cited supra, that the parties had not yet submitted briefs on the 

applicable law surrounding preliminary injunctions. See Trial Court Order, 

8/3/2015. 
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hearing exists.8 Given the rules and case law cited supra, the differing 

accounts of the arguments made at the September 9, 2015 hearing, and the

lack of transcript from that proceeding, we are constrained to vacate the 

trial court’s order and remand this matter for the trial court to conduct a 

hearing regarding the preliminary injunction. 

Second, Lagom argues that “the trial court erred when it failed to 

require Akator to post a bond in accordance with Pa.R.C.P. 1531(b) when it 

granted the preliminary injunction.” Lagom’s Brief at 22 (unnecessary 

emphasis and capitalization omitted). Again, we agree. The trial court 

must require the posting of a bond. This Court has determined that 

“[before a preliminary injunction may be granted, the plaintiff must file a 

bond with the prothonotary. This requirement is mandatory and an 

appellate court must invalidate a preliminary injunction if a bond is 

not filed by the plaintiff.” Soja, 522 A.2d at 1131 (citations omitted; 

emphasis added). To be sure, “even if the trial court’s order was otherwise 

proper, its failure to require the posting of a bond would mandate our 

reversal of its decision.” Id. See also Mamula v. United Steelworkers 

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8

Lagom asserts that it “ordered a transcript pursuant to Pa.R.A.P. 1922(a) 

together with the deposit, but was informed by the Court Reporter that she 

was not present for the preliminary objections argument, so the proceeding 

was not recorded and obviously there is nothing to be transcribed.” Lagom’s 

Brief at 15 n.1. In an abundance of caution, our Court’s Prothonotary’s 

office contacted the Allegheny County Court of Clerks and verified that there 

was no record made of the September 9, 2015 argument. 
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of America, 185 A.2d 595, 597 (Pa. Super. 1962) (“The injunction ... was 

issued without the filing of a bond and hence was a nullity. No power 

resided in the court below to issue an injunction where the party applying for 

it had not filed an appropriate bond.”).

In the case sub judice, the trial court reasoned that no bond was 

necessary because “[t]he funds will be held in escrow pending resolution of 

the dispute and then released to the appropriate party and, thus, the bond 

would serve no purpose in this case. With the Order restricting the release 

of the escrow, Lagom has a similar security that a bond would provide.”9 

TCO at 6. This Court, however, has previously rejected this rationale.10 

____________________________________________

9 We have explained that “[t]he requirement of a bond exists for the specific 

purpose of protecting a defendant by supplying a fund to pay damages if this 

relief is granted erroneously.” Goodies Olde Fashion Fudge Co. v. 

Kuiros, 597 A.2d 141, 144 (Pa. Super. 1991). It is unclear to this Court 

how Lagom is afforded protection by being required to deposit $185,000 

into an escrow account. 

10 In Walter, after a plaintiff filed a civil action against the defendants, she 

sought a preliminary injunction against them, requesting that “any 

proceedings from the sale of [the defendants’] property were to be 

deposited into an escrow account from which the [defendants] could not 

make a withdrawal without a court order.” Walter, 837 A.2d at 1207. 

Upon granting the requested preliminary injunction, the trial court chose not 

to require a bond, but instead added a provision to its order granting the 

injunction that stated “IF the defendants prevail ..., the [p]laintiff is 

ORDERED to pay to the [d]efendants the court filing fee and reasonable 

attorney fee associated with the [d]efendants’ request for a [c]ourt [o]rder 

authorizing release of the house proceeds.... Otherwise, [the d]efendant[s’] 

request for [the p]laintiff to post a bond ... is hereby DENIED.” Id. at 1208. 

On appeal, this Court determined that it had “no choice but to vacate the 

order of the trial court due to its failure to require a bond.” Id. In doing so, 

it noted that “[a]lthough the trial court attempted to fashion an alternative 

(Footnote Continued Next Page)
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Accordingly, we must vacate the trial court’s order on this basis as well.11

Order vacated. Remanded for further proceedings consistent with this 

memorandum. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 1/4/2017

(Footnote Continued) _______________________

to [Pa.R.C.P.] 1531(b), the law does not allow the trial court to act in this 

manner.” Id. See also Rosenzweig, 327 A.2d at 38 (concluding that 

injunction ordering the defendant to place disputed funds into an escrow 

account was “defective and subject to being vacated” because it was issued 

without the requisite bond being filed by the plaintiff) (citation omitted).

11 Because we dispose of this matter on the above-stated grounds, we need 

not determine the remaining issue raised by Lagom in its brief.