Court Opinion

ID: 7877240
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:16:37.209221+00
Date Added: 2024-06-11T16:31:26.379080
License: Public Domain

BLACKWELL, Judge,
dissenting.
Based on a finding that this case and the Virginia lawsuit present “[t]he same issues,” the court below enjoined Pinnacle3 from continuing to prosecute any aspect of the Virginia lawsuit. That, I think, was an abuse of discretion because, although the two lawsuits may present some of the same issues, not all the issues are the same, and the court below, apparently not appreciating the distinct issues presented in the Virginia lawsuit, failed to consider whether its injunction ought to sweep less broadly and whether Pinnacle ought to be permitted to continue to prosecute at least some of its claims in *132Virginia. Accordingly, I would vacate the injunction entered below and remand for reconsideration of the motion for an interlocutory injunction. Because the majority does not do so, I respectfully dissent.4
The facts are complicated, but I will try to explain them as simply as I can. Several years ago, Clark Realty Capital, LLC, a construction firm, and Pinnacle, a property management firm, joined together to bid for the opportunity to maintain and manage military housing units at several installations across the country, and their joint venture won the opportunity to do so at, among other installations, Fort Benning, Georgia and Fort Belvoir, Virginia. To maintain and manage the housing units at Fort Belvoir, Clark Belvoir, LLC, an affiliate of Clark Realty, and Pinnacle Belvoir, LLC, an affiliate of Pinnacle, formed Clark Pinnacle Belvoir, LLC, in which Clark Belvoir has a 70 percent ownership interest and Pinnacle Belvoir has a 30 percent ownership interest. Clark Pinnacle Belvoir and the Army, in turn, formed Fort Belvoir Residential Communities, LLC, in which Clark Pinnacle Belvoir has a 51 percent ownership interest. Fort Belvoir Residential Communities owns the housing units at Fort Belvoir that Clark Realty and Pinnacle won the right to maintain and manage. In many respects, Pinnacle says, Clark Realty effectively controls Fort Belvoir Residential Communities, inasmuch as Clark Realty is the manager of Clark Pinnacle Belvoir, which, in turn, is the managing member of Fort Belvoir Residential Communities. But with respect to any adjustment of a property management agreement to which Fort Belvoir Residential Communities is a party, Pinnacle Belvoir has effective control of Fort Belvoir Residential Communities, Pinnacle claims, because under the operating agreement for Clark Pinnacle Belvoir, both Clark Realty and Pinnacle Belvoir must vote on any such adjustment, and if there is a tie, Pinnacle Belvoir has the right to break the tie. Similar entities apparently were formed for the maintenance and management of housing units at Fort Benning, including Fort Benning Family Communities, LLC, which owns the housing units there.
Fort Belvoir Residential Communities and Fort Benning Family Communities each entered into a property management agreement with Pinnacle, by which Pinnacle would provide property management services at the two installations. Each property management agreement provides, among other things, that the agreement terminates upon the occurrence of any “theft, fraud, or other knowing or *133intentional misconduct by [Pinnacle] or its employees or agents.” Clark Realty later came to believe that Pinnacle and certain Pinnacle employees were engaged in fraud at both installations, and both Fort Benning Family Communities and Fort Belvoir Residential Communities filed this lawsuit against Pinnacle, seeking a declaratory judgment that their property management agreements were terminated, as well as damages for breach of fiduciary duty, fraud, and unjust enrichment.
After this lawsuit was filed, Pinnacle Belvoir invoked its rights under the operating agreement for Clark Pinnacle Belvoir and proposed an adjustment to the property management agreement between Fort Belvoir Residential Communities and Pinnacle. Not surprisingly, the proposed adjustment would amend the property management agreement to give Pinnacle an opportunity to cure any “theft, fraud, or other knowing or intentional misconduct” prior to termination of the property management agreement. Clark Realty apparently refused to vote on the proposal, thereby depriving, Pinnacle says, Pinnacle Belvoir of the opportunity to break the tie and force an amendment of the property management agreement.
Pinnacle and Pinnacle Belvoir then filed a lawsuit in Virginia against Clark Realty and Clark Belvoir, in which they seek a declaratory judgment as to the rights of Pinnacle Belvoir under the operating agreement of Clark Pinnacle Belvoir to inspect its books and records and to propose and require a vote on the adjustment of the property management agreement for the housing units at Fort Belvoir. They also seek a declaratory judgment that, unless and until the Georgia court rules otherwise, the property management agreement at Fort Belvoir remains in effect. Finally, they allege that Clark Realty and its affiliates and officers are engaged in a scheme to deprive Pinnacle of its interest in the joint venture nationally, including by causing Fort Benning Family Communities and Fort Belvoir Residential Communities to file the lawsuit in Georgia, which, Pinnacle and Pinnacle Belvoir claim, is without merit and concerns matters so inconsequential or trivial that Fort Belvoir Residential Communities ought not pursue such a lawsuit in any event. Based on these allegations, Pinnacle and Pinnacle Belvoir seek damages from Clark Realty and its affiliates and officers.
Fort Benning Family Communities and Fort Belvoir Residential Communities moved the court below to enjoin Pinnacle from pursuing the Virginia litigation, and the court granted the motion. In its order, the court below found that “[t]he same issues, facts, and same parties lie before both the Circuit Court of Fairfax County, Virginia, and the Superior Court of Muscogee County, Georgia,” explaining, among other things, that “Count II of the Virginia complaint seeks to amend the [Fort] Belvoir [property management agreement].” *134Based on these findings, the court below enjoined Pinnacle from “proceeding . . . with its lawsuit in the Circuit Court of Fairfax County, Virginia.” There is no indication that the court considered any distinct issues raised in Virginia or whether a more limited injunction would be in order.
Whether to grant an interlocutory injunction is committed to the discretion of the trial court, but if, in the exercise of that discretion, a trial court relies upon a finding of fact that the record cannot sustain or misapplies the law, it abuses its discretion. See Mathis v. BellSouth Telecommunications, 301 Ga. App. 881, 881 (690 SE2d 210) (2010) (decision is an abuse of discretion if it is “unsupported by any evidence of record or where [the] ruling misstates or misapplies the relevant law”); see also Glisson v. Global Security Svcs., 287 Ga. App. 640, 640 (653 SE2d 85) (2007) (an abuse of discretion occurs “if a trial judge awards injunctive relief ‘without any evidence to support such judgment and contrary to the law and equity’ ”) (citation omitted); Allen v. Hub Cap Heaven, Inc., 225 Ga. App. 533, 534 (484 SE2d 259) (1997). Here, the record does not sustain the findings about the nature of the issues presented in the Virginia case on which the court based its injunction, and for that reason, the court abused its discretion, and we must vacate the injunction and remand for further proceedings.
The court below found that the “[s]ame issues” are presented in both lawsuits, but from the record, it is apparent, I think, that not all the same issues are presented in each lawsuit, even if some common issues appear in both. The Virginia lawsuit seeks, for instance, a declaration of the right of Pinnacle Belvoir to inspect the books and records of Clark Pinnacle Belvoir. Whether Pinnacle Belvoir has a right to inspect those books and records, as far as I can see, has nothing to do with whether Pinnacle has breached any property management agreement and does not depend at all on the resolution of any issue presented in the Georgia case. Likewise, the court below misconstrued the claim in Virginia concerning the right of Pinnacle Belvoir under the Clark Pinnacle Belvoir operating agreement to propose and have a vote on an adjustment of the property management agreement for Fort Belvoir. The court, as noted above, characterized this claim as one “to amend” the property .management agreement. But the Virginia complaint does not ask the Virginia court to order any changes to the property management agreement, and it instead asks the Virginia court only to declare whether Clark Realty can be required to vote on the proposal to amend the property management agreement and whether Pinnacle Belvoir has the right to break a tie. The issues raised by these claims are issues that concern the corporate governance of Clark Pinnacle Belvoir, and those are issues that are not before the Georgia court.
*135It is true, of course, that the assertion of these claims in Virginia may be motivated by the Georgia litigation, but I wonder if that ought to matter. If Pinnacle Belvoir has the rights that it claims under the operating agreement for Clark Pinnacle Belvoir, for instance, I am not certain that Pinnacle Belvoir properly can be divested of those rights simply because it has certain motives for exercising them. If motives matter, it is only because the operating agreement for Clark Pinnacle Belvoir or the law applicable to that operating agreement says so, but the operating agreement is not something that is before the Georgia court. And in any event, the court below did not even consider these questions because it apparently failed to appreciate that some of the issues presented in the two cases are not, in fact, the same.
It also is true that, if Pinnacle is permitted to proceed with these claims in Virginia, the Virginia court might award relief to Pinnacle that has some implications for the Georgia case, but it is not apparent that this possibility makes a difference. Fort Benning Family Communities and Fort Belvoir Residential Communities argued below that the demand to inspect the books and records of Clark Pinnacle Belvoir is simply an attempt to obtain discovery for the Georgia lawsuit by means other than those authorized by the Civil Practice Act, but so what if it is? Parties obtain discovery by other legal means — interviewing independent witnesses, searching their own records, searching public records, and asking others to voluntarily make records and information available — in all kinds of litigation. If Pinnacle Belvoir, in fact, has an unconditional right under the operating agreement of Clark Pinnacle Belvoir to inspect the books and records of that entity, I am not sure that it should be divested of that right simply because the books and records might be used in other litigation.
If the Virginia court declares that Pinnacle Belvoir has the right to require Clark Realty to vote on any change in the property management agreement at Fort Belvoir and has the right to break any tie, it might, of course, result in Pinnacle Belvoir actually effecting such a change, which might then affect the outcome of the Georgia litigation. But we regularly see cases in which the outcome is driven by business decisions that the parties or their affiliates made after the filing of the cases, decisions that they had every right to make, notwithstanding the pendency of litigation. And if Pinnacle Belvoir, in fact, has the right it claims with respect to a change in the property management agreement, that may be unfortunate for Clark Realty and its affiliates, but that is the operating agreement into which they entered. I am not confident that the existence of litigation that does not concern the operating agreement affords a basis for an injunction that may effectively strip Pinnacle Belvoir of *136its rights under the operating agreement.
“[T]he pendency of a suit in one State . . . furnishes no cause to stay or abate a new suit brought in a court of another State,” even when the suits involve the same parties and causes of action, Ambursen Hydraulic Constr. Co. v. Northern Contracting Co., 140 Ga. 1, 6 (78 SE 340) (1913), unless it appears that the party to be enjoined is attempting to do “an inequitable thing.” Id. at 7. If Pinnacle Belvoir has the rights that it claims under the operating agreement for Clark Pinnacle Belvoir, I am not sure that it is inequitable for Pinnacle Belvoir to seek to vindicate those rights just because some related entities are involved in related litigation in Georgia or because it might be motivated by the Georgia litigation. And whether Pinnacle Belvoir has the rights it claims is a question that concerns the corporate governance of Clark Pinnacle Belvoir, a company organized under the laws of Virginia and apparently having its principal place of business in Virginia. The principle of comity, I think, ought to make us wary of an injunction that effectively prevents a Virginia court from passing upon the governance of a Virginia company under Virginia law, especially when the same issues of governance are not squarely presented in the court below. See generally American Med. Security v. Parker, 279 Ga. 201, 207-208 (612 SE2d 261) (2005) (Carley, J., concurring) (discussing principle of comity). In any event, there is no indication that the court below considered any of these questions when it issued an injunction in this case.
To be sure, some of the issues presented in the Georgia and Virginia cases are the same. The claim in Virginia that the property management agreement for Fort Belvoir remains in effect raises a question about whether the agreement already has terminated by its own terms upon the occurrence of “theft, fraud, or other knowing or intentional misconduct” by Pinnacle, an issue squarely presented in the Georgia case. And to the extent that Pinnacle seeks damages in Virginia for the bringing of a lawsuit in Georgia that, Pinnacle claims, has no merit or concerns inconsequential and trivial things, its claims directly implicate the merits of the case below. So, I do not doubt that the court below might properly enter some injunction with respect to the Virginia lawsuit. And perhaps it might even properly enter the injunction that it did, barring Pinnacle from pursuing all of its claims in Virginia. But if it is to do so, the court below must correctly assess the facts, including what precisely is at issue in the Virginia litigation. Because the court did not do so, I would vacate the injunction and remand for further proceedings.
I am authorized to state that Judge Doyle joins in this dissent.
*137Decided December 1, 2011
Page, Scranton, Sprouse, Tucker & Ford, Marcus B. Calhoun, Jr., Greenberg Traurig, Michael J. King, for appellants.
Buchanan & Land, Jerry A. Buchanan, Lori M. Leonardo, for appellees.

 By “Pinnacle,” I mean American Management Services LLC and American Management Services East LLC, the defendants in the court below.

 I agree with the majority that the plaintiffs in this case have standing to seek an injunction and that, although the court below could not directly enjoin Pinnacle affiliates that were not before it, it could enjoin Pinnacle from acting through those affiliates to circumvent its injunction.