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Ard v. GrrlSpot, LLC

Court of Appeals of Louisiana, Fourth Circuit

October 23, 2019

JENNA S. ARD
v.
GRRLSPOT, LLC AND CHRISTINE E. JOHNSON JENNA S. ARD
v.
GRRLSPOT, LLC AND CHRISTINE E. JOHNSON

          APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2018-04626, DIVISION "D" Honorable Nakisha Ervin-Knott, JUDGE

          Imtiaz A. Siddiqui IAS LAW LLC COUNSEL FOR DEFENDANT/APPELLANT

          Peter J. Butler, Jr. Richard G. Passler BREAZEALE SACHSE & WILSON, L.L.P COUNSEL FOR PLAINTIFF/APPELLEE

          Court composed of Judge Terri F. Love, Judge Regina Bartholomew-Woods, Judge Paula A. Brown

          PAULA A. BROWN JUDGE.

         This matter involves a dispute over alleged partnership interests in a business called GrrlSpot, LLC. Plaintiff/Appellee, Jenna Ard, filed suit against Defendant/Appellant, Christine Johnson, seeking damages and injunctive relief. The district court heard Ms. Johnson's application for preliminary injunction based upon the verified pleadings and supporting affidavits. The district court granted Ms. Ard's request for preliminary injunction. Thereafter, the district court granted Ms. Ard's motion to amend the preliminary injunction to furnish security and denied Ms. Johnson's cross-motion to dissolve the preliminary injunction. In addition to allowing Ms. Ard to furnish security, the amended preliminary injunction ordered the same injunctive relief contained in the original injunction and, among other things, prohibited Ms. Johnson from interfering with Ms. Ard's operational control of the business. Ms. Johnson appeals the district court's judgment granting the amended preliminary injunction. Ms. Johnson also appeals the district court's judgment denying her cross-motion to dissolve the preliminary injunction arising out of Ms. Ard's failure to furnish security in the original preliminary injunction. Ms. Ard alleges Ms. Johnson failed to timely appeal the judgment on the original preliminary injunction and requests the appeal be dismissed.

         We find the district court properly granted the motion to amend to allow Ms. Ard to furnish security. The amended preliminary injunction, however, amounted to a mandatory injunction and also changed the status quo, outcomes which require an evidentiary hearing. Accordingly, we affirm in part, vacate in part, and remand for further proceedings consistent with this opinion. We further find Ms. Johnson timely appealed the judgments and deny Ms. Ard's motion to dismiss the appeal.

         FACTUAL AND PROCEDURAL HISTORY

         Ms. Ard and Ms. Johnson began marketing monthly social events for members of the LGBT community under the name of GrrlSpot sometime in 2010. GrrlSpot events were primarily promoted through online social media resources, such as websites, e-mail databases, Facebook, and Instagram. Personal and business conflicts developed between Ms. Ard and Ms. Johnson in 2017. Their seven-year personal relationship ended in February 2017. In March 2017, Ms. Johnson allegedly blocked access to GrrlSpot's financial records, business email accounts, and social media accounts.

         On July 14, 2017, Ms. Ard filed a petition for damages, declaratory judgment, and injunctive relief (the "Petition") against Ms. Johnson and Grrlspot, LLC, in First City Court for the City of New Orleans.[1] The Petition alleged the two had entered into one or more oral agreements to form a partnership[2] to host and coordinate entertainment events under the names of GrrlSpot and GrrlSpot NOLA (collectively, "GrrlSpot."). The Petition further alleged Ms. Ard provided financial support and entertainment and technical services to GrrlSpot, while Ms. Johnson performed certain logistical, bookkeeping, and financial tasks. Ms. Ard contended Ms. Johnson breached their partnership agreement, converted assets, and committed fraud. Citing irreparable harm, Ms. Ard requested a temporary restraining order ("TRO").

         On July 14, 2017, following a hearing on the TRO, the City Court granted the TRO prohibiting, in part, Ms. Johnson's use of the GrrlSpot name and its assets without the participation of Ms. Ard.[3] On July 24, 2017, Ms. Ard and Ms. Johnson agreed to enter INTO a consent judgment. The consent judgment dissolved the TRO and stipulated that Ms. Johnson would continue to operate GrrlSpot, protect GrrlSpot's assets, and provide Ms. Ard with a monthly accounting.[4] Ms. Johnson answered the underlying Petition in First City Court on August 4, 2017. She denied the allegations, arguing, in part, that Ms. Ard never had an ownership interest in GrrlSpot.

         On November 2, 2018, Ms. Ard filed a motion for preliminary injunction, which is the subject of the present appeal, in Civil District Court for the Parish of Orleans ("CDC").[5] Ms. Ard alleged that Ms. Johnson had improperly withdrawn funds from GrrlSpot's accounts, transferred GrrlSpot funds into Ms. Johnson's personal bank account, and used GrrlSpot funds to create a competing business- actions which threatened to destroy Grrlspot. Ms. Ard prayed that Ms. Johnson be enjoined from interfering with Ms. Ard's operational control of Grrlspot, from exerting any operational control over the partnership, and from having further access to the partnership's assets until the parties' rights could be determined at a trial on the merits. In support, Ms. Ard attached a written, notarized partnership agreement[6] executed between Ms. Ard and Ms. Johnson on July 8, 2011, Grrlspot bank records, and social media postings regarding GrrlSpot events and "Love Shack Entertainment," the alleged competing business.

         In response, Ms. Johnson urged that Ms. Ard had no ownership interest in GrrlSpot and accused Ms. Ard of forging Ms. Johnson's signature on the partnership agreement. Following Ms. Johnson's attack on the validity of the partnership agreement, Ms. Ard supplemented her motion for preliminary injunction with the affidavit of Chad P. Youngblood, the Notary to the partnership agreement. In his affidavit, Mr. Youngblood verified the authenticity of the partnership agreement, attesting that on July 8, 2011, he personally witnessed Ms. Ard and Ms. Johnson execute the partnership agreement before him. Mr. Youngblood also attested that he confirmed with Ms. Johnson the authenticity of his notarial attestation of the partnership agreement in a telephone conversation with her.

         The district court fixed the hearing on the motion for preliminary injunction for November 27, 2018, and ordered, pursuant to La. C.C.P. art. 3609, the matter be heard on the verified pleadings or affidavits.[7] At the conclusion of the hearing, the district court granted Ms. Ard's request for a preliminary injunction against Ms. Johnson, enjoining Ms. Johnson from interfering with Ms. Ard's operational control of GrrlSpot pending trial on the merits, among other things. The preliminary injunction also ordered Ms. Johnson to provide Ms. Ard with certain information pertaining to GrrlSpot, but it did not include an order to furnish security as required by La. C.C.P. art. 3610.[8]

         The following day, November 28, 2019, Ms. Ard, recognizing that security had not been furnished, filed a motion to amend the preliminary injunction ("motion to amend') to add a provision for her to furnish security. Ms. Ard also filed a separate motion for contempt, complaining that Ms. Johnson had not taken immediate steps to comply with the terms of the preliminary injunction. In turn, Ms. Johnson filed an opposition to the motion to amend, along with a cross-motion to dissolve and/or modify the preliminary injunction ("motion to dissolve"). Ms. Johnson asserted the original preliminary injunction was invalid on its face as it had been issued without a security bond in violation of La. C.C.P. art. 3610.

         On December 18, 2018, the district court conducted a hearing on both parties' motions. At the conclusion of the hearing, on December 19, 2018, the district court rendered two separate judgments. In the first judgment, the district court granted Ms. Ard's motion to amend; denied Ms. Ard's motion for contempt; and denied Ms. Johnson's motion to dissolve. In the second judgment, the district court issued an amended preliminary injunction. The amended preliminary injunction ordered the same injunctive relief as contained in the original November 28, 2018 preliminary injunction order. Additionally, the amended preliminary injunction required Ms. Ard to post a $1000.00 security bond and noted that the injunction would not issue until the security was posted.

         Ms. Johnson filed, in this court, a supervisory writ application on the judgment granting Ms. Ard's motion to amend and denying her motion to dissolve. In a separate action, Ms. Johnson appealed the judgment issuing the amended preliminary injunction. The supervisory writ was ultimately treated as a motion for appeal and consolidated with the appeal of the amended preliminary injunction.[9]On appeal, Ms. Ard filed a motion to dismiss Ms. Johnson's appeal as untimely, which we will address, infra.

         DISCUSSION

         Ms. Johnson raises several assignments of error which we have consolidated as following: (1) the district court erred in issuing an amended preliminary injunction as the original preliminary injunction was invalid on its face due to Ms. Ard's failure to furnish security; (2) the district court erred in issuing a mandatory preliminary injunction that changed the status quo without conducting a full trial on the merits or an evidentiary hearing as required by law; and (3) the district court erred in: (a) issuing a preliminary injunction that lacked reasonable detail; (b) failing to fix adequate security; and (c) failing to award attorney's fees arising out of Ms. Johnson's motion to dissolve the preliminary injunction. Before we address the merits of these errors, we will first consider Ms. Ard's motion to dismiss appeal.

         Motion to Dismiss Appeal

         Ms. Ard argues Ms. Johnson's appeal should be dismissed as untimely due to Ms. Johnson's failure to timely appeal the original preliminary injunction dated November 27, 2018, within fifteen days from the date of judgment as required by La. C.C.P. art. 3612.[10] Ms. Ard contends that delays for an appeal from a preliminary injunction are not suspended or interrupted by subsequent judgments relating to the underlying preliminary injunction. In support, Ms. Ard relies on Bayou Hunting Club v. Desoto Parish Jury, 569 So.2d 252 (La.App. 2nd Cir. 1990). We find the facts in the case sub judice distinguishable from the facts presented in Bayou Hunting Club.

         In Bayou Hunting Club, the plaintiffs sought preliminary injunctions to enjoin the DeSoto Parish Police Jury from blocking their access to two roadways. On October 24, 1989, the district court granted the preliminary injunction as to roadway one and denied it as to roadway two. A writ of injunction was issued the same day regarding roadway one and served on the police jury on October 27, 1989. On November 6, 1989, the district court signed a "Judgment on Application for Preliminary Injunction" regarding roadway one submitted by both parties. The judgment fixed security, expanded the scope of the preliminary injunction and re-urged that injunctive relief had been denied as to roadway two on October 24, 1989. In response to the plaintiffs' request, the district court provided written reasons for judgment on November 7, 1989. On November 17, 1989, the plaintiffs moved for and were granted an appeal from that part of the November 6, 1989 judgment which had denied the injunction as to roadway two. On appeal, the Second Circuit dismissed the appeal as untimely because the appeal had not been brought within fifteen days from the October 24, 1989 judgment. The plaintiffs argued that appeal delays should run from the November 6, 1989 judgment which fixed security because the October 24, 1989 preliminary injunction judgment was invalid for its failure to fix security at the time of the preliminary injunction's issuance. In rejecting that argument, the Second Circuit reasoned that any possible deficiencies in the October 24, 1989 judgment which granted the injunction as to roadway one and denied the injunction as to roadway two-a judgment which was not appealed-did not impact the time delays to appeal the denial of the injunction as to roadway two. Id., at 254. The Second Circuit also opined that the November 6, 1989 judgment merely confirmed the written October 24, 1989 judgment. Id., at 255.

         Ms. Ard argues, akin to Bayou Hunting Club, that the district court's amendment of the original preliminary injunction on December 19, 2018, to permit the posting of security did not start anew the time delays for Ms. Johnson to appeal the original preliminary injunction signed on. We disagree.

         Our review of the record herein shows the proposed amended preliminary injunction was an amendment to the original preliminary injunction that is the subject of the appeal. We also note that it was Ms. Ard who moved to amend, recognizing the original preliminary injunction did not comply with the formalities required by La. C.C.P. art. 3610. A preliminary injunction granting injunctive relief may only issue after a bond is posted, unless a bond is not statutorily required. Yokum v. Nicholas S. Karno, Inc., 2010-0357, p. 3 (La.App. 4 Cir. 8/26/10), 47 So.3d 1014, 1016. Here, after the district court granted the motion to amend, the amended preliminary injunction specifically ordered that, "pursuant to La. Code Civ. Pro. Art. 3610, this preliminary injunction shall not issue unless Jenna S. Ard furnishes security in the amount of $1, 000.00." Hence, notwithstanding that the injunctive relief granted in the original preliminary injunction was the same as that granted in the amended preliminary injunction, the original preliminary injunction did not effectively issue on November 27, 2019. Rather, the injunction issued on December 19, 2018, the date Ms. Ard posted security.[11]

         "An appeal from an order or judgment relating to a preliminary injunction must be taken, and bond furnished, within fifteen days from the date of the order of judgment." Id., 2010-0357, p. 2, 47 So.3d at 1016 (citation omitted). Therefore, Ms. Johnson's appeal, taken on January 2, 2019, was timely filed within fifteen days of the issuance of the December 19, 2018 amended preliminary injunction. Accordingly, Ms. Ard's motion to dismiss appeal is denied. We now review Ms. Johnson's assigned errors.

         Motion to Amend Preliminary Injunction

         Ms. Johnson argues, in her first assigned error, that the district court lacked authority to amend a preliminary injunction issued without security by fixing security after judgment on the preliminary judgment had been rendered. Ms. Johnson contends an injunction must first issue before it can be amended; and in this instance, she argues the ...


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