Case Name: METRO RIVERBOAT ASSOCIATES, INC. v. BALLY'S LOUISIANA, INC.; Metro Riverboat Associates, Inc., etc. v. Bally's Louisiana, Inc., et al.
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 2000-12-18
Citations: 777 So. 2d 578
Docket Number: Nos. 99-CA-0827 and 99-CA-0828
Parties: METRO RIVERBOAT ASSOCIATES, INC. v. BALLY’S LOUISIANA, INC. Metro Riverboat Associates, Inc., etc. v. Bally’s Louisiana, Inc., et al.
Judges: (Court composed of Judge WILLIAM H. BYRNES, Judge JOAN BERNARD ARMSTRONG, Judge PATRICIA RIVET MURRAY, Judge JAMES F. McKAY, and Judge MICHAEL E. KIRBY).
Reporter: Southern Reporter, Second Series
Volume: 777
Pages: 578–584

Head Matter:
METRO RIVERBOAT ASSOCIATES, INC. v. BALLY’S LOUISIANA, INC. Metro Riverboat Associates, Inc., etc. v. Bally’s Louisiana, Inc., et al.
Nos. 99-CA-0827 and 99-CA-0828.
Court of Appeal of Louisiana, Fourth Circuit.
Dec. 18, 2000.
Rehearing Denied Jan. 31, 2001.
Thomas W. Tucker, Lisa C. West, and John J. Cummings, III, New Orleans, LA, Counsel for Plaintiff/Appellee.
Daniel Lund, Nathan T. Gisclair, Jr., Stephen P. Schott, Montgomery, Barnett, Brown, Read, Hammond & Mintz, L.L.P., New Orleans, LA, Counsel for Defendant/Appellant.
(Court composed of Judge WILLIAM H. BYRNES, Judge JOAN BERNARD ARMSTRONG, Judge PATRICIA RIVET MURRAY, Judge JAMES F. McKAY, and Judge MICHAEL E. KIRBY).

Opinion:
I, ARMSTRONG, Judge.
Defendant, Bally's Louisiana, Inc. ("BLI"), appeals the trial court's grant of a preliminary injunction in favor of plaintiff, Metro Riverboat Associates, Inc. ("Metro"). The injunction was granted after a second evidentiary hearing was held in this matter. This second hearing was held pursuant to a ruling of this Court, which remanded the case for another hearing after finding that Metro had failed to satisfy its burden of proof for the issuance of a mandatory preliminary injunction at the first evidentiary hearing. The facts of this case and the trial court proceedings leading to the earlier remand by this Court were set forth in Metro Riverboat Associates, Inc. v. Bally's Louisiana, Inc., 97-1672 (La.App. 4 Cir. 1/14/98), 706 So.2d 553, as follows:
In June 1993, Belle of Orleans, L.L.C. (Belle Company) was formed by Metro Riverboat Associates, Inc. (Metro) and Bally's Louisiana, Inc. (Bally's), two Louisiana corporations, for the purpose of owning and operating a gambling riverboat in Orleans Parish. Two months later, a comprehensive Operating Agreement was executed by Metro and Bally's to govern their respective rights and obligations in the conduct of Belle Company's business affairs, including capital contributions, voting rights, distribution of income and allocation of losses, and the resolution of disputes. Although Metro had a majority ownership interest under this contract, the Operating Agreement essentially required the consent of both members for any significant business decisions.
|?In conjunction with the Operating Agreement, Belle Company and Bally's entered into an equally detailed Management Agreement to govern the operations of the casino itself. This contract was signed on behalf of Belle Company, as owner, by both Metro and Bally's on the same date as the Operating Agreement. A state gaming license subsequently was awarded to Belle Company, and "Bally's Casino Lakeshore Resort" began operations in July 1995 in accordance with the applicable agreements.
The instant litigation was triggered by the December 1996 merger of Bally Entertainment Corporation into Hilton Hotels Corporation. Under Metro's interpretation of the Operating Agreement, this transaction resulted in a "change of control," an event which was defined as permitting most decisions to be made by a simple majority rather than by unanimous consent. Additionally, because Hilton Hotels had an ownership interest in another Orleans Parish riverboat casino, Metro interpreted the merger to result in Bally's violation of the noncom-petition provision of the Operating Agreement. The contract provided that, unless cured, this default would deprive Bally's of any voting rights and could lead to the dissolution of Belle Company.
Metro made these interpretations clear to Bally's at a members' meeting conducted by telephone in February 1997. Minutes prepared by Metro's sole shareholder, Norbert Simmons, reported that eight resolutions had been passed, despite Bally's negative votes. The resolutions authorized actions that previously had required unanimity. Following that meeting, Mr. Simmons, purporting to act on behalf of Belle Company, directed Bally's, in its capacity as manager of the casino, to make significant changes in routing revenues and certain expense payments in order to comply with those resolutions. In a separate letter, Metro notified Bally's that it had thirty days to cure its breach of the Operating Agreement's noncom-petition clause.
Asserting that the transaction with Hilton Hotels had no impact on their contracts, Bally's responded with its own notice of breach as well as a formal request for a meeting, which was the first step in the dispute resolution procedures outlined in the Operating Agreement. Both parties then agreed to a brief "stand still" period to attempt a negotiated settlement.
13At the expiration of the "stand still" period Bally's made written demand on Metro for binding arbitration of all their differences, asserting that this was required by the Operating Agreement. However, that same day, Metro filed this suit asking that Bally's be prohibited from pressing any demand for arbitration and that it be ordered to implement the resolutions passed at the February meeting pending judicial interpretation of the contracts. After the parties presented testimony and evidence on Metro's motion for a preliminary injunction, the matter was taken under advisement.
On April 18, 1997, the trial court granted Metro's motion for a preliminary injunction and ordered Bally's to (1) specify signatories for a new Belle Company checking account under Metro's control; (2) transfer all casino revenues except that needed for daily operations and its management fees to the new Belle Company checking account; and (3) to disburse funds from the new checking account in accord with Metro's directives as controlling member of Belle Company. In addition, Bally's was prohibited from proceeding with its demand for arbitration and from taking any action on its assertion that Metro had breached the Operating Agreement. In separate reasons for judgment, the court explained that the issues in dispute were not within the scope of the arbitration clauses of either the Operating or Management Agreements, and that the December 1996 Bally-Hilton merger represented both a violation of the Operating Agreement's noncompetition provision and a change of control under the language of that contract. (Footnotes omitted.)
After considering BLI's appeal of the trial court's judgment of April 18, 1997, this Court vacated the portion of the trial court's judgment ordering BLI to take specific actions to implement Metro's February 1997 resolutions and remanded this matter to the trial court for a new eviden-tiary hearing. Although Metro offered some evidence on the issue of irreparable harm at the first hearing, this Court remanded this matter after finding that Metro did not offer sufficient evidence to support its interpretations of certain provisions of the Operating Agreement.
|4A second evidentiary hearing was held on October 12, 1998. Each side presented additional testimony and documentary evidence. After that hearing, the trial judge rendered judgment on November 24, 1998, issuing another preliminary injunction in favor of Metro with the exact same wording as the one issued on April 18, 1997, except that the April 18, 1997 judgment also included language regarding BLI's demand for arbitration.
In his reasons for the November 24, 1998 judgment, the trial judge adopted all relevant portions of his reasons for judgment issued on April 18, 1997. The judge indicated that, in his opinion, a full eviden-tiary hearing had been conducted before thé issuance of the April 18, 1997 preliminary injunction; however, he followed the dictate of this Court and conducted a sec ond evidentiary hearing. The judge stated that his opinion regarding Metro's motion for a preliminary injunction was the same after the second hearing as it was after the first hearing, i.e., that the December 1996 merger between Bally's Entertainment and Hilton represented a change of control under the Belle Operating Agreement as well as a violation of the noncompetition clause of that agreement.
In its brief, BLI states that it filed an exception of no right of action, which was denied by the trial court. BLI admits that it did not appeal or file a writ application from the judgment denying that exception. BLI asks this Court to notice Metro's alleged lack of a right of action on its own motion pursuant to La. C.C.P. art. 927. We decline to do so, as we find no error in the trial court's denial of that exception.
| sIn this appeal, as in the appeal following the issuance of the April 18, 1997 injunction, BLI argues that the issuance of a mandatory preliminary injunction was improper because Metro did not establish by sufficient proof that it will suffer irreparable injury in the absence of a preliminary injunction.
Initially, we note that the trial court has "great discretion" as to whether to grant or deny a preliminary injunction. A to Z Paper Company, Inc., 98-1417 (La.App. 4 Cir. 9/9/98), 720 So.2d 703. Thus, our inquiry is whether the trial court abused its great discretion by granting the preliminary injunction in this case.
The party seeking a preliminary injunction has the burden of proving (1) that the injury, loss or damage it will suffer if the injunction is not issued may be irreparable; (2) that it is entitled to the injunctive relief sought; and (3) that it will be likely to prevail on the merits of the case. A to Z Paper, 720 So.2d at 708. Generally, irreparable injury means that the party seeking the preliminary injunction cannot be adequately compensated in money damages for its injury or suffers injuries which cannot be measured by pecuniary standards. HCNO Services, Inc. v. Secure Computing Systems, Inc., 96-1753 (La.App. 4 Cir. 4/23/97), 693 So.2d 835, writ denied, 97-1353 (La.9/5/97), 700 So.2d 513.
In this case, we see no abuse of discretion in the trial court's decision to grant a preliminary injunction. The trial court did not abuse its discretion in concluding that Metro has shown that it is entitled to the injunction sought and a likelihood of success on the merits. The evidence, including Bally's own legal documents, provides a reasonable basis for the trial court's conclusion that the merger of Bally's into Hilton resulted in both a change of control and a violation of the non-competition agreement. Also, the trial court was reasonable to conclude that there is the threat of irreparable injury. The question presented is whether an | (¡eventual money judgment (assuming Metro eventually prevails on the merits) would provide Metro a remedy fully as adequate as a preliminary injunction. While the ultimate stakes in the case may be monetary, the immediate dispute is as to the rights of corporate control, and no monetary value can readily be placed on such rights. Thus, preliminary injunction affords Metro a far fuller remedy than would a judgment for money damages and there is irreparable injury.
For the foregoing reasons, the judgment of the trial court is affirmed.
AFFIRMED.
MURRAY, J. dissents for the reasons assigned by Judge KIRBY.
KIRBY, J., Dissents with reasons.
. In Metro Riverboat Associates, Inc. v. Bally's Louisiana, Inc., 97-1672 (La.App. 4 Cir. 1/14/98), 706 So.2d 553, this Court found that the lower court correctly rejected BLI's demand for arbitration and affirmed the portion of the judgment prohibiting BLI from proceeding with its demand for arbitration.