Opinion
No. A04-842.
Filed March 22, 2005.
Appeal from the District Court, Hennepin County, File No. 03-13050.
John Garrett Westrick, Westrick McDowall-Nix, P.L.L.P., (for appellants)
Thomas Michael Fafinski, BenePartum Law Group, P.A., (for respondents)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
On appeal from the district court's order dissolving a temporary restraining order (TRO) suspending a mortgage foreclosure sale, appellants argue that the district court erroneously ruled that they lacked standing to bring this action. Because we conclude that the district court did not rule on standing and that the record supports the court's decision to dissolve the TRO, we affirm.
FACTS
In the past, respondent Fafinski Wallrich, P.A. (FW) has represented appellant Emad Y. Abed on a variety of legal matters. Over time, Abed incurred approximately $100,000 in legal fees, which he failed to pay. In April 2001, Abed agreed to execute and deliver to FW (1) a $40,000 promissory note, which would be due and payable in full on April 13, 2002; and (2) a mortgage on certain real property in Minneapolis, to secure payment of the note. In exchange, FW agreed to forgive the outstanding debt and not to record the mortgage, so long as there was no default.
It is undisputed that Abed did not pay the $40,000 to FW by April 13, 2002. Consequently, FW recorded the mortgage on April 17, 2002. FW subsequently assigned the mortgage to respondent Walfin, Inc. On April 15, 2003, Walfin notified Abed that his failure to pay the $40,000 constituted a default, and that a public foreclosure sale would take place unless he cured the default within 33 days.
On May 28, 2003, Abed transferred the subject property to RKL Landholdings, L.L.C., by quitclaim deed. On July 18, 2003, Abed and appellant Nokomis Plaza, L.L.C. filed a complaint against FW and Walfin alleging common law fraud and negligent misrepresentation. Abed also requested a temporary restraining order (TRO) enjoining Walfin from conducting the upcoming foreclosure sale. At the emergency ex parte hearing, Abed failed to disclose that he no longer owned the subject property. In fact, he argued that irreparable injury would occur to him if Walfin went forward with the foreclosure sale. The district court granted the TRO and scheduled a hearing.
At the next hearing, FW, still unaware that Abed no longer owned the subject property, argued that the TRO should be dissolved. Abed again failed to disclose RKL's ownership interest to the court. Abed argued that he was "in negotiations to sell this building" and that he would be "damaged if a sheriff's sale went forward." The district court determined that it was appropriate to continue the TRO, allow discovery, and schedule an evidentiary hearing, all to "maintain the status quo." On January 16, 2004, RKL sold the subject property to Goff Plaza, L.L.C.
During discovery, FW learned for the first time that the subject property had actually been transferred to RKL two months prior to Abed's original request for a TRO. Consequently, FW moved for sanctions and to dissolve the TRO based on Abed's misrepresentations. On March 31, 2004, the district court granted FW's motions. This appeal follows.
DECISION
Abed first argues that the district court erred in ruling that he does not have standing to challenge the mortgage. But in its March 31, 2004 order, the court did not rule on standing. Rather, the court held that it was proper to dissolve the TRO because Abed had "destroyed the status quo" by transferring the subject property to RKL. Because the standing issue was not decided by the district court, we do not address it here. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). Furthermore, we do not address Abed's argument that the district court did not make appropriate Dahlberg findings, as this issue was raised for the first time at oral argument and is, therefore, waived. See Melina v. Chaplin, 327 N.W.2d 19, 20-21 (Minn. 1982) (holding that issues not briefed on appeal are waived).
The decision whether to grant or deny a TRO is discretionary with the district court, and will not be overturned absent a clear abuse of that discretion. Carl Bolander Sons Co. v. City of Minneapolis, 502 N.W.2d 203, 209 (Minn. 1993). The purpose of a TRO is "to preserve the status quo until a hearing on an application for a temporary injunction can be conducted." 2A David F. Herr Roger S. Haydock, Minnesota Practice § 65.3, at 157 (3d ed. 1998). Generally, "[t]he failure to show clearly the existence of irreparable injury is sufficient to deny injunctive relief." Id; cf. Morse v. City of Waterville, 458 N.W.2d 728, 729 (Minn.App. 1990) (discussing irreparable harm in context of temporary injunction), review denied (Minn. Sept. 28, 1990).
Here, although the district court initially determined that irreparable harm would occur if the foreclosure sale took place, it did so based on Abed's intentional misrepresentations. Abed was only able to establish irreparable harm by concealing the true ownership of the property and by misleading the district court into believing that he was actively pursuing a sale of the property. But the true facts demonstrate that by transferring the subject property to RKL, Abed himself destroyed the status quo falsely sought to maintain. Because Abed cannot establish the requisite irreparable harm, we conclude that the district court did not abuse its discretion in dissolving the TRO.
When this deception was revealed at the February 18, 2004 hearing, Abed changed positions and argued that irreparable harm would occur because if he and Nolomis successfully pursued their underlying claims of common law fraud and negligent misrepresentation, they might have a difficult time recovering money. But the injury must be significant and irreparable in the sense that money damages cannot properly compensate for the loss. Thomas v. Ramberg, 240 Minn. 1, 160 N.W.2d 18, 21-22 (1953). Thus, Abed's amended argument also fails to demonstrate the requisite harm.