Court Opinion

ID: 9785105
Source: CourtListenerOpinion
Date Created: 2023-08-30 21:03:46.701396+00
Date Added: 2024-06-11T07:36:05.834884
License: Public Domain

DISSENTING OPINION BY
Judge LEAVITT.
I respectfully dissent. I disagree with the majority’s conclusion that the Township has satisfied the strict requirements for mandatory preliminary injunctive relief. Simply, the trial court’s preliminary injunction to Lexon to pay $521,538.86 under a construction bond is an award of contract damages, which cannot be obtained in an equitable proceeding. A fortiori, a preliminary injunction to pay a discrete sum of money does not preserve the status quo but, rather, disturbs it. Accordingly, I would dissolve the trial court’s mandatory preliminary injunction.
To proceed in equity, the plaintiff must plead the lack of an adequate remedy at law. The Woods at Wayne Homeowners Association v. Gambone Brothers Construction Company, Inc., 893 A.2d 196, 204 (Pa.Cmwlth.2006). In deciding whether a remedy is adequate, “it is the remedy itself and not its possible lack of success that is the determining factor.” Willing v. Mazzocone, 482 Pa. 377, 383, 393 A.2d 1155, 1158 (1978).
A preliminary injunction will issue where necessary to preserve the status quo as it existed before the acts complained of, while the court decides on the *558merits of permanent injunctive relief. The Woods at Wayne Homeowners Association, 893 A.2d at 204. The essential prerequisites of a preliminary injunction are as follows:
(1) The injunction is necessary to prevent immediate and irreparable harm not compensable in money damages.
(2) Greater injury will result from refusing the injunction than from granting it.
(3) The injunction restores the parties to status quo ante.
(4) The activity sought to be restrained is actionable, and the plaintiffs right to relief is clear.
Id. Our Supreme Court has emphasized the
distinction between mandatory injunctions, which command the performance of some positive act to preserve the status quo, and prohibitory injunctions, which enjoin the doing of an act that will change the status quo. This Court has engaged in greater scrutiny of mandatory injunctions and has often stated that they should be issued more sparingly than injunctions that are merely prohibitory. Thus, in reviewing the grant of a mandatory injunction, we have insisted that a clear right to relief in the plaintiff be established.
Mazzie v. Commonwealth, 495 Pa. 128, 134, 432 A.2d 985, 988 (1981).
The majority concludes that the Township satisfied the first essential prerequisite for obtaining injunctive relief, ie. that the injunction is necessary to prevent immediate and irreparable harm not compen-sable in money damages. I disagree. The surety bond issued by Lexon to secure Developer’s obligation to complete the roads, storm drains and sidewalks in West-port Farms is a contract. See Beckwith Machinery Co. v. Asset Recovery Group, Inc., 890 A.2d 403, 406 (Pa.Super.2005) (“As a surety agreement is a contract, we turn to its language to determine the extent of the surety’s rights and liabilities.”). Like any other party to a contract, the Township can pursue a civil action for Lexon’s breach of any of the terms of the bond. Stated otherwise, the Township has an adequate remedy at law by which to obtain the remedy it seeks, an award of monetary damages.
The Pennsylvania Superior Court’s decision in Jostan Aluminum Products Co., Inc. v. Mount Carmel District Industrial Fund, 256 Pa.Super. 353, 389 A.2d 1160 (1978), is, as Lexon points out, instructive. There, the plaintiff brought a suit in equity to obtain a mandatory injunction directing the defendants to construct and install a new roof on an industrial plant. The plaintiff argued that the injunction was necessary because the combination of machinery operated in the plant and the leaking roof created a dangerous condition for the employees who worked there. In rejecting the plaintiffs claim for injunctive relief, the Superior Court explained:
Instantly, plaintiffs’ complaint in equity seeks, in effect, restoration or replacement of a roof under the terms of a lease agreement. We perceive no reason why this claim cannot be pursued at law in an assumpsit action to recover damages.... In other words, plaintiffs could simply sue under their lease. Despite averments of irreparable harm, we think it clear that plaintiffs can obviate any further injury by presently engaging a contractor to make the necessary repairs or replacement pending resolution of the liability issue in an assumpsit action.
Id. at 1163 (emphasis added) (citation omitted). As did the plaintiffs in Jostan Aluminum Products, the Township can *559arrange for the necessary repairs to be made in Westport Farms while it simultaneously initiates a civil action to enforce the Lexon bond. The trial court’s preliminary injunction is an improper award of damages before the parties’ contract claims and defenses have been adjudicated.1
A bond may operate as a contract of indemnity or of guaranty, or both. Our Supreme Court has explained that the difference lies “between an affirmative covenant for a specific thing and one of indemnity against damage by reason of the nonperformance of the thing specified.” Equitable Trust Co. v. National Surety Co., 214 Pa. 159, 162, 63 A. 699, 700 (1906). Stated another way, a bond securing a land development project can indemnify against loss, or it can guarantee completion of the work. To ascertain the nature of a bond, the court considers the language of the bond itself. Purdy v. Massey, 306 Pa. 288, 293, 159 A. 545, 546 (1932). Further, a “bond given pursuant to a contract incorporated in the bond, will be construed in the light of the terms of the contract and the attendant circumstances, but ‘the obligation of a bond cannot be extended beyond the plain import of the words used.’” Commonwealth, to Use of Pennsylvania Manufacturers’ Association Casualty Insurance Co. v. Fidelity & Deposit Co. of Maryland, 355 Pa. 434, 437, 50 A.2d 211, 212 (1947) (citation omitted).
The above principles must inform the meaning of the language of the Surety Bond issued by Lexon. It provides, in pertinent part:
NOW, THEREFORE, the condition of this obligation is such that if the [Developer] shall construct, or have constructed the improvements herein described in accordance with the [Development] Agreement and shall save the [Township] harmless from any loss, cost or damage by reason of its failure to complete said work, then this obligation shall be null and void, otherwise to remain in full force and effect.... If, however, neither the [Developer] nor [Lexon] satisfactorily com,píete the improvements under the [Development] Agreement within such timeframes as are established by the [Development] Agreement ... [Lexon], upon receipt of written notice from the [Township’s] manager or solicitor that the improvements have not been installed or completed, in accordance with the [Development] Agreement ... shall pay to the [Township], within ten (10) business days from the date of such written notice, the entire principal amount of this bond less any amounts previously authorized to be released from this obligation ....
PROVIDED FURTHER, ... [Lexon] shall not have defense for non-payment under this Bond for any reason other than non-receipt of notice of [Developer’s] default.
Reproduced Record at 64a-65a (R.R. _)
(emphasis added). The Development Agreement, incorporated by reference into the Surety Bond, states that “the Surety Bond is to be held in accordance with the provisions of this Agreement for the purpose, among other things, of paying for the cost of the Improvements.” R.R. 23a. To that end, the Development Agreement provides:
*560If ... Developer does not elect to undertake the completion of the Improvements within said twenty (20) day period, [Lexon] shall pay to the Township, from time to time, promptly upon receipt by it of invoices from the Township, that portion of the remaining balance of the Surety Bond required to pay all of the costs of completing the Improvements.
R.R. 25a. Furthermore,
[i]n the event that the Improvements are not completed as required hereby, or in the event that ... Developer is otherwise in default of this Agreement, then any undrawn funds remaining under the Financial Security shall, upon draw by the Township, be paid to Township. ... In completing said Improvements, Township may, at its option, have such Improvements completed by Developer or by independent contractors or by Township’s employees or by any combination of the foregoing, as Township may elect.
R.R. 86a.
The above-cited provisions seem to provide that the Surety Bond obligations of Lexon are ones of both indemnity and guaranty. The Development Agreement authorizes the Township to complete the improvements and submit its expense statements to Lexon for payment, which would make Lexon’s obligation one of indemnity. The bond itself also allows Lex-on to do the improvements. However, if the Township notifies Lexon that the improvements have not been made, then Lexon must pay “the entire principal amount of this bond less amounts previously authorized to be released.... ” R.R. 64a. In sum, the Development Agreement and Surety Bond create different rights and remedies that need to be sorted out, and in an assumpsit proceeding, not a motion for a preliminary injunction.
Section 511 of the Pennsylvania Municipalities Planning Code (MPC), 53 P.S. § 10511,2 does not, as the majority suggests, command a different result in this case. Section 511 states, in relevant part:
In the event that any improvements which may be required have not been installed as provided in the subdivision and land development ordinance or in accord with the approved final plat the governing body of the municipality is hereby granted the power to enforce any corporate bond, or other security by appropriate legal and equitable remedies.
53 P.S. § 10511 (emphasis added). The emphasized language authorizes a governing body to enforce a bond by “appropriate legal and equitable remedies.” The word “appropriate” applies to both the legal and the equitable remedy.
Were a surety bond obtained under Section 511 of the MPC a pure guaranty bond, a suit in equity to compel performance would be an “appropriate” equitable remedy. Indeed, it would be the only way to enforce the municipality’s rights under such a surety bond. That is not the case here. The guaranty portion of the Surety Bond appears to be capable of invocation only by Lexon, which has retained the contract right to do the Developer’s work as a way to discharge its bond obligation. If Lexon does not do so, then the Township can demand full payment of the Surety Bond amount.
Section 511 did not abolish the strict requirement that a plaintiff may proceed in equity only where that plaintiff lacks an adequate remedy at law. Section 511 did not authorize municipalities to use equity to displace or modify the terms of a developer’s bond, including its enforcement pro*561visions. Such an extreme result cannot be read into Section 511’s brief sentence authorizing a municipality to demand and enforce a bond required of a developer by “appropriate” court action.
Equity follows the law. First Federal Savings and Loan Association of Lancaster v. Swift, 457 Pa. 206, 210, 321 A.2d 895, 897 (1974). A municipality cannot pursue injunctive relief simply because there are hurdles to a legal remedy that cannot be overcome, such as an expired statute of limitations. See Jostan Aluminum Products, 389 A.2d at 1164(“(u)nder most authorities, the mere fact that the statute of limitations would bar a remedy at law is no ground in itself for applying to equity for relief unless plaintiff was prevented from suing by defendant’s act.”) To proceed in equity, the plaintiff must show the absence of a legal remedy. Here, the Township has a legal remedy by which it can obtain a judgment of $521,538.86 — it is by an as-sumpsit action.
Finally, I disagree with the majority’s conclusion that the injunction was necessary to maintain the status quo ante, which is the “last actual, peaceable (and, we may add, lawful) uncontested status which preceded the pending controversy.” Commonwealth v. Coward, 489 Pa. 327, 342, 414 A.2d 91, 99 (1980). Indeed, the majority explains that “the relief must not change the status that existed between the parties just before the conflict between them arose.” Op. at 556 n. 6. Applying the majority’s own standard, then, it is difficult to comprehend how the status of the parties has not been changed by forcing Lexon to pay bond proceeds to the Township before the parties’ contract rights and defenses have been adjudicated.
I would reverse the trial court’s order issuing a mandatory preliminary injunction to Lexon.

. The value of this preliminary injunction is not clear. The trial court asserted in its opinion that it believes that in the hearing on the permanent injunction, the Township will prove its right to relief under the applicable contracts. If it is otherwise decided, the Township will have to return $521,538.86 to Lexon.

. Act of July 31, 1968, P.L. 805, as amended, 53 P.S. § 10511.