Opinion ID: 1868375
Heading Depth: 1
Heading Rank: 3

Heading: analysis

Text: Before addressing the merits of Appellants' arguments regarding the writ, however, we must first resolve whether Appellants have standing to seek such relief. In Courier-Journal v. McDonald , [5] this Court's predecessor stated: The relief sought is that the order in the wrongful-death suit be vacated, as void. The petitioners herein were not parties to that suit, so they could not have moved directly in the circuit court to have the order vacated. Since they could not have had the order vacated by proceeding directly in the circuit court, obviously they have no standing to ask this court to direct that the order be vacated. The general rule is stated to be that mandamus will not lie to courts or judges at the instance of strangers to the proceedings. 55 C.J.S. Mandamus, § 49, p. 84. [6] The McDonald Court relied upon the general rule as then stated in Corpus Juris Secundum that the writ of mandamus remedy is unavailable to strangers to the proceedings. Lewis LP Gas and Aileen Lewis can hardly be characterized as strangers to these proceedings, however, because the trial court's order directly and substantially affects them by involving Lewis LP Gas. Additionally, the current version of Corpus Juris Secundum now incorporates at Mandamus § 42 the principle of law that [o]rdinarily any person having an interest in the subject matter of the petition is entitled to institute mandamus proceedings. [7] And, the commentary to § 42 explains: A petitioner for mandamus relief must have standing just as any other litigant must, and must meet statutory standing requirements. Ordinarily any person having an interest in the subject matter of the petition is entitled to institute mandamus proceedings, but an officious intermeddler may not seek mandamus in a matter with which he is not concerned. [8] While neither Lewis LP Gas nor Aileen Lewis is an actual party to the underlying dissolution action, they are clearly not officious intermeddler[s]. The subject matter of the trial court's order sub judice is the shares of Ferrellgas owned by Lewis LP Gas. Thus, Lewis LP Gas has a legitimate interest in the subject matter of these proceedings. Aileen Lewis has an interest in seeing that her investment as a shareholder of Lewis LP Gas is protected. Appellants argue forcefully that the trial court's order has shackled the corporation's ability to engage in prudent business decisions concerning the sale of its principal asset. Moreover, we observe that the failure to recognize Lewis LP Gas's standing to pursue such relief may also implicate rights of due process that uphold the premise that a person should not be bound by an injunction decree unless she has had her day in court. [9] Accordingly, we find that Lewis LP Gas and Aileen Lewis have standing to seek a writ of prohibition against the trial court.
Due to the extraordinary nature of its reliefinterlocutory intervention by an appellate court, [10] the writ of prohibition remedy is reserved for exceptional circumstances [11] and therefore should be granted only upon a showing that (1) the lower court is proceeding or is about to proceed outside its jurisdiction and there is no adequate remedy by appeal, or (2) the lower court is about to act incorrectly, although within its jurisdiction, and there exists no adequate remedy by appeal or otherwise and great injustice and irreparable injury would result. [12] Appellants argue that a writ of prohibition is appropriate in this case under the first criterion because (1) the trial court acted outside its jurisdiction by restraining a non-party, Lewis LP Gas, from engaging in normal business decisions with regard to the purchase and sale of its assets, and (2) the corporation has no adequate remedy by appeal. Appellants also stress that irreparable injury may occur if it is prohibited from selling its Ferrellgas shares, which are volatile in value. Appellee responds that the trial court has jurisdiction over Lewis LP Gas because the corporation is Randy's alter ego. [13] Thus, Appellee asserts that the trial court could pierce the corporate veil to obtain jurisdiction over Lewis LP Gas. [14] Although we agree that the alter-ego rule may confer jurisdiction over a corporation under certain circumstances, we disagree that it is applicable here. The alter-ego doctrine is reserved for situations in which incorporation is accomplished to invoke fraudulent protection against personal liability. [15] [T]he elements thereof have been defined as follows: (1) that the corporation is not only influenced by the owners, but also that there is such unity of ownership and interest that their separateness has ceased; and (2) that the facts are such that an adherence to the normal attributes, viz[.], treatment as a separate entity, of separate corporate existence would sanction a fraud or promote injustice. [16] In sum, under the alter-ego theory, assets owned by the corporation are inseparable from those controlled by its owner. [17] That is not the case here. Lewis LP Gas was incorporated as a family business and continues as such. Although the nature of its business has changed, with Randy Lewis and his mother at the helm, it continues as a separate business from its owners. Its major holding, Ferrellgas stock, is an independent asset of the corporation. Although Randy Lewis owns the majority of the Lewis LP Gas's stock, he does not own all of its stock and the corporation's separateness still exists. Thus, the alter-ego doctrine is inapplicable in the present case and may not be used as a jurisdictional hook for the trial court to exert control over Lewis LP Gas. Because Lewis LP Gas and Aileen Lewis are not parties to the underlying dissolution action, they cannot appeal the trial court's order restraining the sale by Lewis LP Gas of its Ferrellgas' shares. [18] Consequently, Lewis LP Gas and Aileen Lewis do not have an adequate remedy by appeal.
In the March 15, 2002 order enjoining the sale of Ferrellgas stock, the trial court concluded that a bond was not required to provide for its enforcement. [19] We disagree. CR 65.05(1) provides: No restraining order or temporary injunction shall be granted except upon the giving of a bond by the applicant, with surety, in such sum as the court or the officer to whom application is made deems proper, for the payment of such costs and damages as may be incurred or suffered by any person who is found to have been wrongfully restrained or enjoined. The address of the surety shall be shown on the bond. The rule unquestionably requires that a bond accompany an order granting temporary injunction relief, [20] and the trial court erred when it enjoined the stock sales without requiring Janie Lewis to post a bond sufficient in amount to protect Appellants.
During these proceedings, the trial court entered an order allowing Randy Lewis to sell Ferrellgas stock: The court having considered Respondent's motion to permit the sale of certain assets, and the Court having read extensive testimony taken in this case, SUSTAINS the motion in part. The Respondent is authorized to sell any or all of the Ferrell Gas stock, provided that all the proceeds derived from the sale be deposited with the Laurel Circuit Court Clerk for disbursement pursuant to subsequent orders of this Court. The Respondent shall furnish to the Court a detailed statement of the entire stock transferred, including number of shares sold and amount received. Janie Lewis contends that since this order permits stock sales, the controversy presented for our decision no longer exists. We disagree. The mootness doctrine operates to vitiate a case or controversy, and thus render court opinions advisory, when the issue at hand ceases to exist prior to judicial resolution. [21] It is a well-settled principle that judicial intervention is viable only in circumstances setting forth an ongoing disagreement. [22] While the plain language of the order grants Lewis LP Gas permission to sell Ferrellgas stock, it also requires that the proceeds of any stock sale be deposited with the court for later distribution as directed by the trial court. As a result, the order continues to restrain Lewis LP Gas's ability to make legitimate business decisions with regard to its assets. Instead of a prior restraint on stock sales, the trial court's order now requires Lewis LP Gas to deposit with the trial court any proceeds from a sale of its Ferrellgas stock. And thus, Appellants argue that the trial court's previous order still operates to Lewis LP Gas's detriment as it prevents the corporation from seeking to maximize the interests of its stockholders through additional purchases and sales of stock or other business ventures. Accordingly, we hold that this matter was not mooted by the trial court's subsequent order.