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Emerson Electric Co. v. Sherman

OPINION FILED DECEMBER 19, 1986.

EMERSON ELECTRIC COMPANY, ET AL., PLAINTIFFS-APPELLEES,

v.

GEORGE M. SHERMAN ET AL., DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Cook County; the Hon. David J. Shields, Judge, presiding. PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

In this interlocutory appeal under Supreme Court Rule 307(a)(1) (87 Ill.2d R. 307(a)(1)), from an order granting a preliminary injunction, defendants contend that the trial court erred in issuing the injunction. Plaintiffs have filed a motion to dismiss the appeal as moot, which was taken with the case. For the reasons hereinafter stated, we agree with plaintiffs and dismiss defendants' appeal.

On October 2, 1985, plaintiffs, Emerson Electric Company and its wholly owned subsidiary, Skil Corporation, filed a three-count complaint against the individual defendant, George Sherman, former president of Skil Corporation, for breach of a confidential disclosure relationship, and against the corporate defendants, the Black & Decker companies, for unfair competition and tortious interference with contractual relations. The complaint sought a temporary restraining order, preliminary and permanent injunctive relief, actual and punitive damages, attorney fees, and costs.

On October 10, 1985, the parties entered into a settlement agreement and plaintiffs' action was dismissed with prejudice. The trial court retained jurisdiction of the case to enforce the terms of the settlement agreement.

On April 21, 1986, plaintiffs moved for a temporary restraining order, alleging that defendants had violated the terms of the settlement agreement. The motion was granted, and defendants were restrained by reason of provisions in the settlement agreement from assigning responsibilities to Carl J. Amrein, Skil's former vice-president of engineering, who had been hired by Black & Decker, as to three product lines which directly compete with plaintiffs' products until a hearing could be held on a preliminary injunction. On April 23, 1986, plaintiffs filed their verified second complaint against defendants alleging breach of the settlement agreement and unfair competition. The complaint sought injunctive relief against defendants for a period of two years.

On May 1, 1986, after the hearing on the preliminary injunction had commenced, the temporary restraining order was extended to May 2, 1986, when the trial court denied a motion of defendants to dissolve it and granted plaintiffs' written motion to extend the restraining order until further order of court. Defendants did not appeal the order denying their motion to dissolve.

After an evidentiary hearing, the trial court, on May 12, 1986, found that defendants had violated the terms of the settlement agreement and enjoined them from employing Carl J. Amrein in those areas in which Black & Decker products compete with Skil products until October 10, 1986, when the settlement agreement expired. Defendants did not move to dissolve the preliminary injunction, but they did file a timely notice of appeal from the order granting it.

• 1 Plaintiffs, as we have noted, have moved to dismiss defendants' appeal as moot because the preliminary injunction has expired. A case becomes moot when, pending the decision on appeal, events occur which render it impossible for the reviewing court to grant effectual relief to any of the parties. (Bluthardt v. Breslin (1979), 74 Ill.2d 246, 251, 384 N.E.2d 1309.) The preliminary injunction granted in this case expired by its own terms on October 10, 1986, and nothing we do can affect the enforcement of that injunction. Panduit Corp. v. All States Plastics Manufacturing Co. (1980), 84 Ill. App.3d 1144, 1148, 405 N.E.2d 1316.

Defendants, however, argue that we should rule on the merits of this appeal because if the preliminary injunction was improperly issued, they would be entitled to have damages assessed against plaintiffs under section 11-110 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 11-110). We disagree.

Section 11-110 provides in relevant part:

"In all cases where a temporary restraining order or a preliminary injunction is dissolved by the circuit court or by the reviewing court, the circuit court, after the dissolution of the temporary restraining order or preliminary injunction, and before finally disposing of the action shall, upon the party claiming damages by reason of such temporary restraining order or preliminary injunction, filing a petition under oath setting forth the nature and amount of damages suffered, determine and enter judgment in favor of the party who was injured by such temporary restraining order or preliminary injunction for the damages which the party suffered as a result thereof, which judgment may be enforced as other judgments for the payment of money."

• 2 We initially note that this statute is to be strictly construed and applied (Schien v. City of Virden (1955), 5 Ill.2d 494, 504, 126 N.E.2d 201) and that attorney fees and other damages may be recovered under it only if the preliminary injunction has been dissolved before the case is disposed of on the merits, and thus adjudicated to have been wrongfully issued (Meyer v. Marshall (1976), 62 Ill.2d 435, 439, 343 N.E.2d 479). However, expiration of an injunction by its own terms is not equivalent to the dissolution of the injunction for the purposes of section 11-110, and an injunction that has expired can no longer be dissolved because a court cannot dissolve that which no longer exists. (Panduit Corp. v. All States Plastic Manufacturing Co. (1980), 84 Ill. App.3d 1144, 1149, 405 N.E.2d 1316; Buckingham Corp. v. Vesolowski (1974), 17 Ill. App.3d 58, 61-62, 307 N.E.2d 703.) Thus, even if we were to hold that the preliminary injunction was improperly issued, damages could not be obtained under section 11-110 because such a holding would not result in dissolving the already defunct preliminary injunction. Panduit Corp. v. All States Plastic Manufacturing Co. (1980), 84 Ill. App.3d 1144, 1149, 405 N.E.2d 1316.

This conclusion, however, does not mean that damages under section 11-110 are never available in those cases where the preliminary injunction expires by its own terms before a reviewing court can consider whether the preliminary injunction was improperly issued. The key to the preservation of the question of damages for short-term preliminary injunctions lies in the timely filing in the trial court of a motion to dissolve the injunction. Panduit Corp. v. All States Plastic Manufacturing Co. (1980), 84 Ill. App.3d 1144, 1149-1150, 405 N.E.2d 1316, citing Buckingham Corp. v. Vesolowski (1974), 17 Ill. App.3d 58, 62, 307 N.E.2d 703; see also Keene v. Lane (1985), 137 Ill. App.3d 793, 795, 485 N.E.2d 450; Meyer v. Marshall (1976), 62 Ill.2d 435, 440, 343 N.E.2d 479.

In the case at bar, if defendants had moved for the dissolution of the preliminary injunction and their motion had been denied, we could have reviewed the decision to deny the motion. We then could have held that the motion should have been granted, and this would have preserved the question of damages under section 11-110 of the Code of Civil Procedure. Panduit Corp. v. All States Plastic Manufacturing Co. (1980), 84 Ill. App.3d 1144, 1150, 405 N.E.2d 1316.

Here, however, no motion to dissolve the preliminary injunction was made, and, at this stage of the proceedings, since it has expired of its own terms, "we are without the legal underpinnings to support a section [11-110] hearing for the assessment of damages because no motion was made to dissolve the preliminary injunction." (Panduit Corp. v. All States Plastic Manufacturing Co. (1980), 84 Ill. App.3d 1144, 1150, 405 N.E.2d 1316.) As in the Panduit case, "[t]he only ruling we could make to aid [defendants] is to find that the preliminary injunction ...


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