Court Opinion

ID: 4202705
Source: CourtListenerOpinion
Date Created: 2017-09-12 16:11:33.37253+00
Date Added: 2024-06-11T14:40:54.113882
License: Public Domain

MEMORANDUM DECISION                                                           FILED
                                                                        09/12/2017, 10:32 am
Pursuant to Ind. Appellate Rule 65(D),                                        CLERK
this Memorandum Decision shall not be                                     Indiana Supreme Court
                                                                             Court of Appeals
regarded as precedent or cited before any                                      and Tax Court

court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.

ATTORNEY FOR APPELLANTS                                  ATTORNEY FOR APPELLEES
A. David Hutson                                          James F. Guilfoyle
Hutson Legal                                             Guilfoyle Law Office
Jeffersonville, Indiana                                  Jeffersonville, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Wyoming Pharmacies, LLC                                  September 12, 2017
d/b/a Kentuckiana Pharmacy,                              Court of Appeals Case No.
Dr. Assad Nasr, and Dr. Erin                             10A01-1703-MI-514
Morsey,                                                  Appeal from the Clark Circuit
Appellants-Defendants,                                   Court
                                                         The Honorable Andrew Adams,
        v.                                               Judge
                                                         Trial Court Cause No.
Crosses Enterprises, LLC and                             10C01-1701-MI-6
Dr. Rafael Cruz,
Appellees-Plaintiffs.

Najam, Judge.

Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017          Page 1 of 9
                                       Statement of the Case
[1]   Wyoming Pharmacies, doing business as Kentuckiana Pharmacy; Dr. Assad

      Nasr; and Dr. Erin Morsey (collectively “Kentuckiana Pharmacy”) bring this

      interlocutory appeal as of right following the trial court’s issuance of a

      preliminary injunction that prohibited Kentuckiana Pharmacy from relocating

      its business pending resolution of the case. Kentuckiana Pharmacy raises one

      issue on appeal, namely, whether the trial court abused its discretion when it

      issued the preliminary injunction without providing sufficient findings of fact

      and conclusions thereon.

[2]   We reverse and remand for further proceedings.

                                 Facts and Procedural History
[3]   Dr. Rafael Cruz is a physician and the sole member of Crosses Enterprises,

      LLC (collectively “Crosses Enterprises”), which had leased office space for Dr.

      Cruz’s medical practice. Drs. Nasr and Morsey are pharmacists. On July 18,

      2014, Crosses Enterprises, through Dr. Cruz, offered Dr. Nasr the use of empty

      office space in the same building as his medical practice to use as a pharmacy.

      On July 25, Drs. Cruz, Nasr, and Morsey formed Kentuckiana Pharmacy, a

      Wyoming limited liability company, that operated out of Crosses Enterprises’

      office space. On August 4, Kentuckiana Pharmacy obtained its Certificate of

      Authority from the Indiana Secretary of State’s office.

[4]   On November 6, the parties signed an operating agreement. Pursuant to that

      agreement, all three individuals each “own 33.3%” of Kentuckiana Pharmacy

      Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017   Page 2 of 9
      and will each receive “a 33.3% share of the profits.” Appellant’s App. Vol. II at

      65. The operating agreement also provided that the members agreed to divide

      the profits “three or four times a year depending on cash flow” and that “[a]ll

      partners will have equal access to the ‘books’ and any financial information

      pertaining to the operations of all the pharmacies.” Id. The pharmacy began

      operations in June 2015.

[5]   At the end of the year, Dr. Nasr met with his accountant to begin preparing his

      taxes. The accountant informed Dr. Nasr that Kentuckiana Pharmacy was

      registered with the IRS as a single-member limited liability company (“LLC”)

      instead of a multi-member LLC. On the advice of Dr. Nasr’s accountant, Dr.

      Nasr presented a resolution to Drs. Cruz and Morsey that would remove Drs.

      Cruz and Morsey as members of Kentuckiana Pharmacy. Drs. Nasr and

      Morsey signed the document. Dr. Cruz’s signature appears on the document

      but the parties contest whether he actually signed it.

[6]   On July 20, 2016, Drs. Cruz and Nasr put in an offer to buy a piece of property

      for the pharmacy, but the deal did not go through. On December 26, Dr. Nasr

      individually executed a lease agreement for a new location for Kentuckiana

      Pharmacy.

[7]   On January 12, 2017, Dr. Cruz filed a complaint in the trial court alleging

      twelve counts of wrongdoing on the part of Drs. Nasr and Morsey. On

      February 8, Dr. Cruz moved for a preliminary injunction to “maintain the status

      quo” and to prevent Dr. Nasr from relocating Kentuckiana Pharmacy out of

      Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017   Page 3 of 9
      Crosses Enterprises’ office space without Dr. Cruz’s consent. Appellant’s App.

      Vol. II at 31.

[8]   The trial court held a hearing on the motion for a preliminary injunction on

      February 22. During the hearing, Karen Sherlock appeared as a witness on

      behalf of Dr. Cruz. Sherlock is Dr. Cruz’s assistant and the custodian of his

      business records. Sherlock testified that Dr. Cruz is currently an owner of

      Kentuckiana Pharmacy and that she was not aware of any document that Dr.

      Cruz signed to relinquish his ownership interest in Kentuckiana Pharmacy.1

      She further testified that “Dr. Nasr has access to Dr. Cruz’s signature on

      prescriptions and because he has prescriptive authority to [give] vaccinations, so

      he could have lifted it off of there.” Tr. at 35. Sherlock also testified that she

      was not aware of any rent paid by Kentuckiana Pharmacy to Crosses

      Enterprises for the use of the office space.

[9]   Dr. Nasr testified that Dr. Cruz’s only involvement with Kentuckiana

      Pharmacy involved mutual customers and that Dr. Cruz had never requested to

      see Kentuckiana Pharmacy’s books or records. Dr. Nasr further testified that

      he was present when Dr. Cruz signed the resolution removing Drs. Cruz and

      Morsey as members of Kentuckiana Pharmacy and that he witnessed Dr. Cruz

      sign the document. He also testified that he believed that the resolution made

      1
          Dr. Cruz argues in his Appellees’ brief that he was not aware of the resolution and that he did not sign it.

      Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017               Page 4 of 9
       Drs. Cruz and Morsey “not members of the company” and also “not owners of

       the company.” Tr. at 86.

[10]   On March 2, the trial court entered a preliminary injunction against

       Kentuckiana Pharmacy. The trial court’s order states:

               FINDINGS/ORDER

               Comes now the Court, having held a hearing on February 22,
               2017, and finds as follows:

               1. Wyoming Pharmacies, LLC is [a] Wyoming Corporation
                  doing business in Indiana as Kentuckiana Pharmacy and
                  Kentuckiana Pharmacies, and that this Court has jurisdiction
                  over this matter as the primary location of operations is Clark
                  County, Indiana;

               2. That Plaintiff Dr. Rafael Cruz and Defendants Dr. Assad
                  Nasr and Dr. Erin Morsey formed Wyoming Pharmacies,
                  LLC [on] July 21, 2014 and the parties entered into an
                  agreement as Wyoming Pharmacies, LLC to do business as
                  Kentuckiana Pharmacy and Kentuckiana Pharmacies that
                  provided the three partners an[] equal share in the profits of
                  Kentuckiana Pharmacy;

               3. That there exists a dispute over ownership of the corporation;

               4. That the Defendant is enjoined from relocating the
                  corporation pending resolution of this matter;

               5. That the Plaintiff is required to post a security bond in the
                  amount of $25,000 in accordance with Indiana Trial
                  Procedure 65(c).

       Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017   Page 5 of 9
       Appellant’s App. Vol. II at 8. This appeal ensued.

                                      Discussion and Decision
[11]   Kentuckiana Pharmacy argues that the entry of the preliminary injunction was

       an abuse of discretion. Specifically, Kentuckiana Pharmacy contends that the

       trial court issued the preliminary injunction “without considering the adequacy

       of the physician’s remedies at law, his likelihood of success at trial, the balance

       of harms[,] or the public interest.” Appellant’s Br. at 4.

[12]   “[T]he power to issue a preliminary injunction should be used sparingly, and

       such relief should not be granted except in rare instances in which the law and

       facts are clearly within the moving party’s favor.” Union Twp. School Corp. v.

       State ex rel. Joyce, 706 N.E.2d 183, 189 (Ind. Ct. App. 1998), trans denied. The

       grant or denial of a preliminary injunction rests within the sound discretion of

       the trial court, and our review is limited to whether there was a clear abuse of

       that discretion. Apple Glen Crossing, LLC v. Trademark Retail, Inc., 784 N.E.2d

       484, 487 (Ind. 2003). To obtain a preliminary injunction, the moving party has

       the burden of showing by a preponderance of the evidence that: (1) the

       movant’s remedies at law are inadequate, which will cause him irreparable

       harm pending resolution of the substantive action; (2) the movant has at least a

       reasonable likelihood of success at trial by establishing a prima facie case; (3) the

       threatened injury to the movant outweighs the potential harm to the nonmoving

       party that would result from the grant of an injunction; and (4) the public

       interest would not be disserved by the injunction. Id. If the movant fails to

       Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017   Page 6 of 9
       prove any of these requirements, the trial court’s grant of an injunction is an

       abuse of discretion. Id.

[13]   Kentuckiana Pharmacy argues that the trial court committed reversible error

       because it failed to issue findings of fact and conclusions thereon pursuant to

       Indiana Trial Rule 52. Trial Rule 52 provides that “[t]he court shall make

       special findings of fact without request . . . in granting or refusing preliminary

       injunctions . . . .” Further, Trial Rule 65(D) provides that “[e]very order

       granting temporary injunction and every restraining order shall include or be

       accompanied by findings as required by Rule 52[.]” “A trial court’s failure to

       enter findings of fact and conclusions of law, as required by Ind. Trial Rule 52

       and Ind. Trial Rule 65, in an order granting a preliminary injunction constitutes

       reversible error.” GKC Indiana Theatres, Inc. v. Elk Retail Investors, LLC, 764

       N.E.2d 647, 651 (Ind. Ct. App. 2002).

[14]   In this case, the trial court’s order granting the preliminary injunction contained

       only the following language:

               1. Wyoming Pharmacies, LLC is [a] Wyoming Corporation
                  doing business in Indiana as Kentuckiana Pharmacy and
                  Kentuckiana Pharmacies, and that this Court has jurisdiction
                  over this matter as the primary location of operations is Clark
                  County, Indiana;

               2. That Plaintiff Dr. Rafael Cruz and Defendants Dr. Assad
                  Nasr and Dr. Erin Morsey formed Wyoming Pharmacies,
                  LLC [on] July 21, 2014 and the parties entered into an
                  agreement as Wyoming Pharmacies, LLC to do business as
                  Kentuckiana Pharmacy and Kentuckiana Pharmacies that
       Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017   Page 7 of 9
                   provided the three partners an[] equal share in the profits of
                   Kentuckiana Pharmacy;

               3. That there exists a dispute over ownership of the corporation;

               4. That the Defendant is enjoined from relocating the
                  corporation pending resolution of this matter;

               5. That the Plaintiff is required to post a security bond in the
                  amount of $25,000 in accordance with Indiana Trial
                  Procedure 65(c).

       Appellant’s App. Vol. II at 8.

[15]   The trial court did not include any specific findings of fact as required by Trial

       Rule 52 and only provides as a conclusion that a dispute exists over the

       ownership of Kentuckiana Pharmacy. The trial court’s failure to enter the

       required findings of fact and conclusions thereon in this case requires reversal.

[16]   Although we may review a trial court’s grant of a preliminary injunction

       notwithstanding its failure to enter the mandatory findings, we will do so “only

       when the facts are simple and uncontested, and only a question of law is

       presented for review.” Whiteco Indus., Inc. v. Nickolick, 549 N.E.2d 396, 398

       (Ind. Ct. App. 1990). We do not have such a case here. It is clear from the

       record that the facts are not uncontested. Specifically, the ownership of

       Kentuckiana Pharmacy continues to be contested and is an underlying subject

       of the case before the trial court.

       Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017   Page 8 of 9
[17]   Because the ultimate outcome of this case will be determined primarily by

       factual determinations, the absence of factual findings by the trial court leaves

       us unable to determine if Crosses Enterprises has demonstrated a likelihood that

       it will prevail on the merits. See Whiteco Idus., 549 N.E.2d at 399. We

       conclude that appellate review of the trial court’s preliminary injunction is

       precluded by the lack of proper findings, and, thus, we reverse the trial court’s

       order, dissolve the preliminary injunction, and remand for further proceedings

       not inconsistent with this opinion. See id.

[18]   Reversed and remanded.

       Kirsch, J., and Brown, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 10A01-1703-MI-514 | September 12, 2017   Page 9 of 9