Opinion
No. 98 C 5898
February 20, 2001
ORDER
On March 21, 2000, this court issued a memorandum opinion and order, granting judgment to Moloney Coachbuilders, Inc. ("Moloney") on Count of Moloney's counterclaim against third-party defendant Earle F. Moloney ("Earle"). See International Armor Limousine Co. v. Moloney Coachbuilders, Inc., 2000 WL 640883 (N.D. Ill. March 21, 2000). in Count I, Moloney alleged that Earle and certain companies owned by him — International Armor Limousine Company ("IAL"), Limousine Werks, and Chicago Armor Limousine ("CAL") — breached a 1990 settlement agreement by placing various print advertisements containing the name "Moloney." The judgment in favor of Moloney on Count I was to liability only, leaving open the question of a remedy. Based on judgment in its favor on Count I, Moloney has now filed a motion for a permanent injunction, pursuant to Fed.R.Civ.P. 65, and a motion for attorneys' fees and costs.
I. Motion For Permanent Injunction.
We will not re-summarize the pertinent background facts here as they are set forth in the March 21, 2000 memorandum opinion and order.
As set forth in the prayer for relief to its motion, Moloney seeks a permanent injunction enjoining Earle, IAL, Limousine Werks, and CAL, their officers, agents, servants, employees, attorneys and all other persons in active concert or participation with them from:
(i) using the name "Moloney" or any other word, name, symbol or device confusingly similar to Maloney's trade name and trademark "Moloney Coachbuilders," or Moloney's registered trademark "Moloney Coachbuilders and Design" in connection with the sale of or advertising for any product or service relating to the manufacture, sale and/or servicing of custom-built automobiles, limousines or armored cars; and from
(ii) using the Moloney Coachbuilders' corporate history in connection with the manufacture, sale and/or servicing of custom-built automobiles, limousines or armored cars; and from
(ii) holding out in any manner whatsoever that Earle, Moloney, IAL, CAL or Limousine Werks are in any way associated or affiliated with Moloney.
In effect, Moloney is seeking an injunction preventing Earle (and his companies) from violating the 1990 settlement agreement in the future. Moloney describes this type of injunction as a negative injunction.
As an initial point of clarification, we note that, although Moloney does not say so explicitly in its motion, Moloney appears to be seeking an injunction in lieu of any money damages. This conclusion is based on the fact that Moloney argues that money damages are difficult and time-consuming to establish and based on Moloney's reliance on Walgreen Co. v. Sara Creek Property Co., 966 F.2d 273 (7th Cir. 1992), which involved a choice between an injunction and money damages.
Of course, Moloney is not required to elect between these two remedies, as it could seek money damages for the past violations of the settlement agreement and an injunction against any future violations, See, e.g., Hallahan v. N.I.S. Corp., 936 F.2d 1496, 1499 n. 2 (7th Cir. 1991) ("The election of remedies doctrine does not prevent a party who has obtained an injunction covering one period of time to seek damages for injuries inflicted before the injunction took effect.").
We also note that both the request for a permanent injunction and the request for attorneys' fees are based solely on the judgment in favor of Moloney on Count I of the counterclaim. There are additional counts still unresolved in this case, which include Counts II-VI of the counterclaim and Counts I and II of the original complaint filed by IAL. However, none of the remaining counts concern the issue of the parties' settlement agreement. And neither side has suggested in its briefs that the later resolution of these counts, one way or another, would have any affect on the ruling on the two pending motions such that we should wait to issue this ruling until those issues are resolved.
Moloney argues that a permanent injunction is appropriate for the following reasons. Moloney prevailed on the merits of its breach of contract claim. The effect of Earle's actions on Moloney' s customers, revenues, profits and good will is difficult to measure or accurately calculate in an action at law. An injunction would not harm Earle because he could still operate his limousine and armored car business. An injunction also would not harm the public because the public clearly has an interest in not being confused about which party is the source of goods being purchased.
"Before a court may award permanent injunctive relief, a party must demonstrate (1) it has succeeded on the merits; (2) no adequate remedy at law exists; (3) the moving party will suffer irreparable harm without injunctive relief (4) the irreparable harm suffered without injunctive relief outweighs the irreparable harm the nonprevailing party will suffer if the injunction is granted; and (5) the injunction will not harm the public interest." Old Republic Ins. Co. v. Employers Reins. Corp., 144 F.3d 1077, 1081 (7th Cir. 1998). "[A] court's decision with respect to equitable relief [is reviewed] for an abuse of discretion." Bruso v. United Airlines, Inc., 2001 WL 87635, *10, ___ F.3d ___ (7th Cir. Feb. 2, 2001).
In addition to these factors, Moloney argues that an injunction prohibiting future breaches of the settlement agreement is justified in light of Earle's prior behavior. Specifically, Moloney notes that both the Magistrate Judge and this Court concluded that Earle should be held in contempt for violating the standstill order of October 20, 1998. See International Armor Limousine, 2000 WL 640883 at *7-9. Furthermore, in granting judgment on the pleadings on Count I of the Counterclaim, we found that Earle had violated the 1990 settlement agreement that ended the litigation before Judge Aspen. Id. at *4-7
We find that the above reasons fully support the imposition of a permanent injunction in this case. Earle makes two basic arguments in response, neither of which we find convincing. First, Earle argues that breach of contract is "traditionally and typically" a legal cause of action, suggesting that an injunction may not be granted in this context. Notwithstanding any general rule in favor of money damages, it is clear that under appropriate circumstances an injunction may be a valid remedy in a breach of contract case. See Walgreen, 966 F.2d at 275 (noting that damages are the norm but that an injunction may be more efficient in some cases); Almond v. Capital Props., Inc., 212 F.3d 20, 25 (1st Cir. 2000) ("injunctions against contract breach are common where there is some reasonable doubt about whether damages can be sufficient").
Second, in his main argument, Earl asserts that an injunction is inappropriate because Moloney has not established that money damages would be inadequate nor has it even proved that there were any damages at all. Earle suggests that Moloney should be required to put on a witness to prove up this point. We reject this argument also.
As an initial matter, given that Moloney has alleged damage to its goodwill based on the placement of advertisements using the name "Moloney," we would be surprised if Moloney could not establish that money damages were inadequate. See generally Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 217 F.3d 8, 13 (1st Cir. 2000) ("Because injuries to goodwill and reputation are not easily quantifiable, courts often find this type of harm irreparable."). In any event, we think that this injunction is fully justified on the separate rationale that it merely prohibits future breaches of the agreement. Id at 14 (affirming grant of permanent injunction that "simply prohibits contract breach, or, put another way, specifically enforces the contract"). This rationale is separate from the issue of the amount of damages for past violations. Earle claims that such an injunction is not needed because there is no evidence of any ongoing or current breach of the settlement agreement. Even if true, as noted above, the fact remains that Earle has on at least two prior occasions shown a willingness to transgress prohibitions on placing these types of advertisements. This pattern of behavior is enough to invoke our discretionary authority to impose a permanent injunction.
In sum, this injunction is modest in scope. In effect, it "simply reiterates the key provisions" of the 1990 settlement agreement. Ross-Simons of Warwick Inc., 217 F.3d at 14. For all the above reasons, the motion for a permanent injunction is granted.
II Motion For Attorneys' Fees and Costs.
Moloney also filed a motion for attorneys' fees and costs. The motion seeks fees based on our adoption of the Magistrate Judge's recommendation that Earle should pay Moloney its reasonable attorneys' fees and costs related to the contempt proceeding. In addition, Moloney seeks fees based on ¶ 12 of the settlement agreement, which states: "In the event that litigation ensues over any claimed breach of this Settlement Agreement, the losing party shall pay to the prevailing party all costs, including attorneys fees incurred in connection with that litigation." Before a briefing schedule was set on the original motion, Moloney filed an amended motion, which supplemented the original motion with additional fees and costs incurred after the original motion was prepared. As part of its amended motion, Moloney attached its attorneys' monthly billing statements. These statements contain a description of the specific work done. In addition, Moloney attached affidavits from its attorneys.
Earle thereafter filed a response brief. He does not take issue with the general assertion that Moloney should be able to recover attorneys' fees and costs based on the contempt ruling and on the provision in the settlement agreement. He has not argued that the work done was not connected to either the contempt proceeding or the breach of contract claim. He also has not raised any specific challenges to the billing rates of the attorneys involved, nor has he objected to any specific time entry in the monthly billing statements. Instead, he raises two general points of procedure. First, he argues that Moloney's attorneys should not be allowed to describe work in quarter hour increments. As we noted in a prior opinion, this argument is "spurious" given that "billing in fifteen minute increments is as well accepted in the legal community as billing in six minute increments." Countess Cary v. CHA, 1992 WL 91799, *8 n. 4 (N.D. Ill. April 29, 1992).
Second, he argues that there should be an evidentiary hearing to determine the reasonableness of the fees. He also wants to depose Moloney's attorneys. We see no justification for either a hearing or for allowing depositions. As Moloney points out, Earle never raised any of these concerns at the hearing at which we set the briefing schedule on the motion. More importantly, he never raised any specific objection in his response brief. He has been given the opportunity to raise objections and has not pointed to even one suspicious or vague time entry. Having failed to raise any valid objection, we will not allow him to engage in costly and time consuming depositions on the bare hope that he might turn up some ground upon which to argue that the fees are unreasonable.
For the above reasons, we will grant the amended motion for attorneys' fees and costs, which requests $68,620.59 in fees and costs. In its reply brief, Moloney requested an additional $1,901.25 in fees incurred after the filing of the amended motion. Although Moloney did not submit time sheets documenting the specific work done, it is obvious that this work relates to the filing of the reply briefs on the motion for fees and on the motion for a permanent injunction. Based on the length and complexity of these briefs and based on counsel's stated billing rates, we conclude that this amount ($1901.25) is reasonable on its face and that it would not make sense to engage in an additional round of briefing relating to this small portion of the overall award. The total award is thus $70,521.84.
CONCLUSION
For the foregoing reasons, this court grants the amended motion for attorneys fees and orders Earle F. Moloney to pay Moloney Coachbuilders, Inc. $70,521.84 in fees and costs. The original motion for fees is denied as moot. This court also grants the motion for a permanent injunction for the reasons stated herein and hereby enjoins Earle F. Moloney, International Armor Limousine, Limousine Werks, and Chicago Armor Limousine, their officers, agents, servants, employees, attorneys and all other persons in active concert or participation with them from:
(i) using the name "Moloney" or any other word, name, symbol or device confusingly similar to Moloney Coachbuilders, Inc.'s trade name and trademark "Moloney Coachbuilders," or Moloney Coachbuilders, Inc.'s registered trademark "Moloney Coachbuilders and Design" in connection with the sale of or advertising for any product or service relating to the manufacture, sale and/or servicing of custom-built automobiles, limousines or armored cars; and from
(ii) using the Moloney Coachbuilders, Inc.'s corporate history in connection with the manufacture, sale and/or servicing of custom-built automobiles, limousines or armored cars; and from
(iii) holding out in any manner whatsoever that Earle F. Moloney, International Armor Limousine, Limousine Werks, or Chicago Armor Limousine are in any way associated or affiliated with Moloney Coachbuilders, Inc.
JUDGMENT IN A CIVIL CASE
[ ] Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury rendered its verdict.[X] Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.
IT IS HEREBY ORDERED AND ADJUDGED that Enter memorandum Opinion and Order. For the foregoing reasons, this court grants the amended motion for attorneys fees and orders Earle F. Moloney to pay Moloney Coachbuilders, Inc. $70,521.84 in fees and costs. The original motion is denied as moot. This court also grants the motion for a permanent injunction for the reasons stated herein enjoins Eale F. Moloney, International Armor Limousine, Limousine Werks, and Chicago Armor Limousine, their officers, agents, servants, employees, attorneys and all other persons in action concert or participation with them.