ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
ROBERT G. BARKER LYNNE D. LIDKE
J. CHRIS REININGA MICHAEL B. LANGFORD
Barker & Reininga Scopelitis, Garvin, Light & Hanson
Indianapolis, Indiana Indianapolis, Indiana
COURT OF APPEALS OF INDIANA
RHONDA DAUGHERTY, )
vs. ) No. 30A01-9909-CV-309
RONALD K. ALLEN, )
The Honorable Raymond S. Robak, Judge
Cause No. 30C01-9908-CP-205
APPEAL FROM THE HANCOCK CIRCUIT COURT
May 31, 2000
OPINION - FOR PUBLICATION
Rhonda Daugherty brings an interlocutory appeal
See footnote of the trial courts grant of a
preliminary injunction in favor of Dr. Ronald K. Allen. We reverse.
Daugherty raises the following restated issues for our review:
1. Whether the trial court abused its discretion in granting the preliminary
injunction in favor of Dr. Allen because an adequate remedy at law, that
is a suit for money damages, was available; and
2. Whether the trial court abused its discretion in granting the preliminary
injunction in favor of Dr. Allen because it constitutes a prior restraint of
speech in violation of the First Amendment to the United States Constitution.See footnote
Facts and Procedural History
The facts most favorable to the trial courts ruling reveal that Dr. Allen
is a dentist specializing in the area of endodontics.See footnote Dr. Allen has
practiced endodontics for approximately fourteen years in Indianapolis, Indiana. The majority of
Dr. Allens patients are referrals from general practicing dentists in the Indianapolis area.
In December of 1986, Dr. Allen hired Daugherty as a receptionist/assistant.
While employed by Dr. Allen, Daugherty had regular contact with the personnel of
general dentists who referred patients to Dr. Allen. Daugherty was later promoted
by Dr. Allen to the position of office manager.
On July 6, 1999, Daugherty left her employment at Dr. Allens office after
Dr. Allen informed her that he would no longer tolerate her tardiness.
Thereafter, Daugherty told Della Stone, the office manager of one of Dr. Allens
referring dentists, that: 1) there were holes in the bathrooms in Dr. Allens
office through which he observed people use the bathroom; 2) Dr. Allen attempted
to give her his credit card in exchange for her being his mistress;
and 3) Dr. Allen was having an affair with Meleah Ablitar, one of
his employees. Daugherty made similar statements to Dr. Allens wife and Ablitar.
Consequently, on August 20, 1999, Dr. Allen filed: 1) a Verified Petition For
A Preliminary And Permanent Injunction; 2) Motion For Temporary Restraining Order And Order
Of Possession; and 3) Motion To Take Deposition of Defendant, Rhonda Daugherty.
That same day, the trial court: 1) ordered Daugherty to appear at Dr.
Allens office for a deposition on August 27, 1999; 2) set a hearing
on Dr. Allens Petition for a Preliminary Injunction for August 30, 1999; and
3) entered an
ex parte temporary restraining order (TRO)
See footnote against Daugherty.See footnote The
TRO provided in pertinent part that:
[Daugherty] and those acting in concert with her are hereby enjoined from having:
any contact and any verbal and/or written communication of any kind with any
metropolitan Indianapolis area dentist and his or her staff;
any contact and any verbal and/or written communication of any kind with any
member of Dr. Allens staff while they are at work at his office;
from having any physical presence whatsoever in Dr. Allens office; and
from calling or being personally present at any portion of Dr. Allens personal
On August 30, 1999, the trial court held a hearing on Dr. Allens
Petition for a Preliminary Injunction. At the conclusion of the hearing,
the trial court extended the TRO through September 3, 1999, but amended the
TRO to allow Daugherty to contact area dentists to seek employment and to
obtain dental care for herself and her children. On September 3, 1999,
the trial court extended the TRO until September 7, 1999. On September
7, 1999, the trial court entered Findings of Fact and Conclusions of Law
granting Dr. Allens Petition for a Preliminary Injunction. See footnote The
trial courts September 7, 1999 order provides in pertinent part that:
[Daugherty] and those acting in concert with her are hereby enjoined preliminarily from:
Having any contact and any verbal and/or written communication of any kind or
nature whatsoever, at any time, with any person or entity and more specifically,
any metropolitan Indianapolis area dentist, including [Dr. Allen] and his or her staff,
which suggests, indicates, infers or refers to sexual harassment by [Dr. Allen], which
suggests, indicates, infers, or refers to affairs involving [Dr. Allen]; and which suggests,
indicates, infers, or refers to observations by the [Dr. Allen] of employees or
patients while in the employee and patient rest room and which suggest, indicates,
infers or refers to an offer of or a relationship between Ronald K.
Allen and Rhonda Daugherty.
This appeal ensued.
Discussion and Decision
Daugherty first contends that the trial court abused its discretion in granting the
preliminary injunction in favor of Dr. Allen because an adequate remedy at law
was available to Dr. Allen, a suit for money damages. We agree.
A. Standard of Review of Injunctive Relief
The issuance of a preliminary injunction is within the sound discretion of the
trial court, and the scope of appellate review is limited to deciding whether
there has been a clear abuse of discretion. Reilly v. Daly, 666
N.E.2d 439, 443 (Ind. Ct. App. 1996), trans. denied. When determining whether
or not to grant a preliminary injunction, the trial court is required to
make special findings of fact and state its conclusions thereon. Ind. Trial
Rule 52(A). When findings and conclusions are made, the reviewing court must
determine if the trial courts findings support the judgment. Norlund v. Faust,
675 N.E.2d 1142, 1149 (Ind. Ct. App. 1997), trans. denied. The trial
courts judgment will be reversed only when clearly erroneous. Id. Findings
of fact are clearly erroneous when the record lacks evidence or reasonable inferences
from the evidence to support them. Id. We consider the evidence only
in the light most favorable to the judgment and construe findings together liberally
in favor of the judgment. Id.
The trial courts discretion to grant or deny preliminary injunctive relief is measured
by several factors: 1) whether the plaintiffs remedies at law are inadequate, thus
causing irreparable harm pending the resolution of the substantive action if the injunction
does not issue; 2) whether the plaintiff has demonstrated at least a reasonable
likelihood of success at trial by establishing a prima facie case; 3) whether
the threatened injury to the plaintiff outweighs the threatened harm the grant of
the injunction may inflict on the defendant; and 4) whether, by the grant
of the preliminary injunction, the public interest would be disserved. Reilly, 666
N.E.2d at 443. In order to grant a preliminary injunction, the moving
party has the burden of showing, by a preponderance of the evidence, that
the facts and circumstances entitle him to injunctive relief. Id. The
power to issue a preliminary injunction should be used sparingly, and such relief
should not be granted except in rare instances in which the law and
facts are clearly within the moving partys favor. Id.
Initially we note that the doctrine of judicial restraint requires this court to
first address the merits of Daughertys non-constitutional claim, that Dr. Allen was not
entitled to injunctive relief because he did not prove by a preponderance of
evidence that his remedy at law was inadequate, before we address Daughertys constitutional
claim that the preliminary injunction is an impermissible prior restraint.
The doctrine of judicial restraint is a quintessential concept which has long been
rooted in American jurisprudence. See Marbury v. Madison, 5 U.S. 137 (1803).
The doctrine precludes gratuitous judicial review of constitutional questions, thereby perpetuating the
delicate principles of checks and balances and separation of powers which are fundamental
to our constitutional system of government. Id.; see also Rescue Army
v. Municipal Court of the City of Los Angeles, 331 U.S. 549 (1947).
The United States Supreme Court has stated that considerations of propriety, as
well as long-established practice, demand that we refrain from passing upon the constitutionality
of an act of Congress unless obliged to do so in the proper
performance of our judicial function . . . . Ashwander v. Tennessee
Valley Auth., 297 U.S. 288, 341 (1936) (Brandeis, J., concurring). This doctrine
of strict necessity flows from the unique place and character, in our scheme,
of judicial review of governmental action for constitutionality. Rescue Army, 331 U.S.
Indiana has long adhered to the doctrine of judicial restraint See Indiana
Educ. Employment Relations Bd. v. Benton Community Sch. Corp., 266 Ind. 491, 365
N.E.2d 752, 754 (1977); Passwater v. Winn, 248 Ind. 404, 229 N.E.2d
622, 623 (1967) (even if the quality of the litigation is sufficient to
support a constitutional determination, such determination will not be made if the case
can be disposed of justly on non-constitutional grounds); see also Poer, Trustee
v. State, ex rel., 188 Ind. 55, 121 N.E. 83, 84 (1918) (a
constitutional question will not be anticipated in advance of the necessity of deciding
the constitutional issue).
Therefore, if we conclude that an adequate remedy at law was available to
Dr. Allen in the form of a suit for money damages, we may
not address Daughertys constitutional claim that the injunction is a prior restraint in
violation of the First Amendment.
Daugherty argues that the trial court abused its discretion in concluding that Dr.
Allens legal remedy was inadequate and that Dr. Allen would suffer irreparable harm
if the preliminary injunction was not granted. Daugherty further argues that Dr.
Allen is not entitled to equitable relief because Dr. Allen failed to prove
his remedies at law are inadequate. Daugherty characterizes the harm to Dr.
Allen as economic injury, and argues that Dr. Allen can be fully compensated
through a suit for money damages for any injury he may suffer during
the pendency of the adjudication of this case. At oral argument, Dr.
Allen agreed that he suffered economic injury as a result of Daughertys speech.
In response to Daughertys contentions, Dr. Allen argues that he is entitled
to a preliminary injunction because the defamatory falsehoods Daugherty uttered to third parties
about him irreparably harmed his business and personal reputation, resulting in him sustaining
non-quantifiable damages. We disagree.
In the present case, Dr. Allen testified at the preliminary injunction hearing that
ninety-nine percent of his business is derived from referrals from general practicing dentists
in the Indianapolis area. R. 172. He further testified at the
hearing that general dentists can be very fickle when it comes to referral.
Id. In addition, Dr. Allen stated that he believed Daughertys defamatory
falsehoods were injuring both his business and personal reputation, costing him not only
money from lost referrals but also the respect and admiration from fellow practitioners
in dentistry profession. R. 195-96.
The trial court, pursuant to Trial Rule 52(A), entered Findings of Fact and
Conclusions of Law when it granted the equitable relief in favor of Dr.
Allen. R. 102-06. Specifically, the trial court found that Daughertys allegations
were false and that she had communicated the falsehoods to referral dentists and
Dr. Allens wife. R. 103. Furthermore, the trial court found that
Daughertys speech would cause Dr. Allen to suffer harm and irreparable injury, loss,
damage to his professional referral bases as well as his reputation personally, and
that Dr. Allens remedies at law were inadequate. R. 103-04. Finally,
the trial court found that Dr. Allen could state a prima facie case
on the merits, and that the [t]hreatened injury to Dr. Allen outweighs the
threatened harm that a preliminary injunction may inflict on the defendant until the
case therein can be heard on the merits. R. 104.
Therefore, we must determine whether the trial courts Findings of Fact support the
grant of equitable relief in favor of Dr. Allen, essentially deciding whether the
trial court abused its discretion in granting the preliminary injunction.
1. Economic Injury
First, we believe that Dr. Allen has alleged that he will suffer economic
injury if the preliminary injunction restraining Daughertys speech is dissolved by this court.
Dr. Allen has directly linked his business and personal reputation to the
profits of his dentistry practice, stating that he faces serious damage to an
ongoing business it took him fourteen years to develop, incalculable damage to his
reputation, and loss of the good will associated with his specialized practice of
dentistry. Appellees Brief at 32. Specifically, Dr. Allen argues that his
referral base will be diminished if Daughertys speech is unrestrained by an injunction.
Thus, Dr. Allen is asking for damages for the lost profits of
his business due to the defamatory statements, not the damage to his reputation
in the eyes of the community
If an award of post-trial damages is sufficient to make Dr. Allen whole
for his economic injury, than pre-trial relief in the form of a preliminary
injunction is not warranted. See T.H. Landfill Co., Inc. v. Miami County
Solid Waste, 628 N.E.2d 1237, 1239 (Ind. Ct. App. 1994). However, a
party which suffers economic injury which cannot be remedied by post-trial damages is
entitled to injunctive relief. Jay County Rural Elec. Membership Corp. v. Wabash
Valley Power Assn Corp., 692 N.E.2d 905, 909 (Ind. Ct. App. 1998).
We believe Dr. Allens economic injury may be remedied by a suit for
money damages, and thus injunctive relief was not warranted. If Dr. Allen
proceeded to trial with a suit alleging that Daughertys statements were falsehoods, he
would invariably seek compensation for damages sustained to his personal and business reputation
and credibility. Damages as a result of injury to reputation and credibility
are properly recoverable in a tort action. See e.g., Greives v. Greenwood,
550 N.E.2d 334, 338 (Ind. Ct. App. 1990) (damages for loss of reputation
are only available in actions for libel, slander, abuse of process, malicious prosecution
and third party contract interference; these intentional torts afford this remedy because the
result is foreseeable); see also Claise v. Bernardi, 413 N.E.2d 609, 611
(Ind. Ct. App. 1980). Thus, Dr. Allen has the availability of a
tort suit to remedy the damages incurred to his business and personal reputation
as a result of Daughertys speech.
2. Adequate Remedy at Law
However, Dr. Allen argues that a tort suit against Daugherty will not provide
him with an adequate remedy because of the difficulty in quantifying his damages
as a result of his referrals being based on patient needs at the
time. R. 185. Dr. Allen further argues that the only adequate remedy
available to him is equitable relief.
A legal remedy is adequate only where it is as plain and complete
and adequate-or, in other words, as practical and efficient to the ends of
justice and its prompt administration-as the remedy in equity. McKain v. Rigsby,
250 Ind. 438, 237 N.E.2d 99, 103 (1968). The trial court has
a duty to determine whether the legal remedy is as full and adequate
as the equitable remedy. Id. However, a party which suffers mere
economic injury is not entitled to injunctive relief because an award of post-trial
damages is sufficient to make the party whole. Xantech Corp. v. Ramco
Indus., Inc., 643 N.E.2d 918, 921 (Ind. Ct. App. 1994). This is
true because the ability to obtain damages, in the form of a money
judgment for economic injury, represents an adequate remedy at law. T.H. Landfill
Co., Inc., 628 N.E.2d at 1238.
We believe that a dollar amount may be placed on the amount of
damages that Dr. Allen has incurred, and thus, he is not entitled to
injunctive relief. We have repeatedly allowed plaintiffs to recover damages for injury
to their reputation in defamation
See footnote suits, damages which are not easily quantifiable.
See Coachmen Indus., Inc. v. Dunn, 719 N.E.2d 1271, 1276 (Ind. Ct. App.
1999); Powers v. Gastineau, 568 N.E.2d 1020, 1025 (Ind. Ct. App. 1991),
trans. denied; see also Erdman v. White, 411 N.E.2d 653, 659 (Ind.
Ct. App. 1980). Moreover, we have held that a professional practices goodwill[
See footnote ]
value may be included in the marital estate for purposes of property distribution
pursuant to a dissolution decree, and thus, the goodwill of the business is
See Porter v. Porter, 526 N.E.2d 219, 225 (Ind. Ct. App.
1988); see also Cleary v. Cleary, 582 N.E.2d 851, 853 (Ind. Ct. App.
1991). Therefore, the trial court can quantify the damages that Dr. Allen
has incurred to both his business and personal reputation as a result of
Daughertys speech. Because Dr. Allens damages can be ascertained, we believe that
Dr. Allen has an adequate remedy at law in the form of a
suit for money damages and thus, a preliminary injunction is not warranted.
This is especially true because Dr. Allen testified at the preliminary injunction hearing
that his office maintains paper records on the number of patients he obtains
from each referring general dentist. R. 191. Dr. Allen testified that
he could calculate on a per month or per year basis the number
of patients each general dentist refers to him. R. 191-92. Therefore,
it appears that Dr. Allen can, with some predictability and certainty, determine the
rate that referrals have decreased on a monthly or yearly basis from each
specific general dentist.
3. Unfounded Fears of Economic Injury
Daugherty also argues that Dr. Allens fears and apprehensions that he will suffer
economic injury as a result of her speech are unfounded, and thus, there
are no facts to support the trial courts grant of equitable relief in
favor of Dr. Allen. The mere apprehensions or fears of a complainant,
unsustained by facts, do not constitute a sufficient ground for the interference of
a court of equity by injunction. Greathouse v. Board of Sch. Commrs
of City of Indianapolis, 198 Ind. 95, 151 N.E. 411, 415 (Ind. 1926);
see also CBS, Inc. v. Davis, 510 U.S. 1315 (1994) (fact that
broadcast could result in significant economic harm was insufficient to warrant court using
equitable powers to enjoin broadcast). Adequate compensation or other corrective relief, available
at a latter date, weighs heavily against a claim of irreparable harm.
Indiana State Bd. of Pub. Welfare v. Tioga Pine Living Ctr., Inc., 637
N.E.2d 1306, 1315 (Ind. Ct. App. 1994).
We believe that Dr. Allens fears and apprehensions that he will suffer economic
harm as a result of Daughertys speech are unfounded and do not
provide the trial court with a sufficient basis to issue a preliminary injunction.
At the preliminary injunction hearing, Dr. Allen failed to produce proof that
he would suffer irreparable harm as a result of Daughertys speech. Dr.
Allen testified that he had no evidence of lost referrals, nor direct knowledge
that his business and personal reputation had been adversely impacted by Daughertys statements.
R. 174, 186.
Moroever, additional evidence introduced at the hearing supports our conclusion that Dr. Allens
fears that Daughertys speech would ruin his dentistry practice and personal reputation were
unfounded. Della Slone, an office manager of one of the referring dentists,
testified at the hearing that Daugherty communicated to her about Dr. Allens alleged
improper behavior. R. 126. Slone further testified that she had heard
things about Dr. Allen in the past that were not favorable to him.
R. 132. Specifically, she stated that she had heard that Dr.
Allen had previously asked women if they would copy their body parts
on the copy machine in his office. R. 134. Despite the
allegations of improper behavior, Slone stated that she continued to regularly refer patients
to Dr. Allen. Id. Thus, it is apparent that Dr. Allens
fears were not sufficiently grounded in fact for the court to grant equitable
relief in his favor.
Based on the foregoing, we hold that the trial court abused its discretion
in granting the preliminary injunction in favor of Dr. Allen because he has
an adequate remedy at law for the injury to his business and personal
reputation, that is a suit for money damages. Moreover, we hold that
the doctrine of judicial restraint precludes this court from addressing Daughertys constitutional claim
because we have decided the present case on a non-constitutional issue.
BROOK, J., and NAJAM, J., concur.
We note that Indiana Appellate Rule 4(B)(3) grants this court jurisdiction
to hear appeals concerning interlocutory orders such as preliminary injunctions.
Footnote: Oral argument was heard in this case on March 28, 2000,
at Purdue University. We extend our appreciation to the students, faculty, and
administration of the university for their interest and hospitality.
Because we have decided the present case on the non-constitutional issue,
the doctrine of judicial restraint prohibits us from addressing Daughertys constitutional issue.
See, eg., Rescue Army v. Municipal Court, 331 U.S. 549 (1947); Indiana Wholesale
Wine & Liquor v. State, 695 N.E.2d 99, 106 (Ind. 1998). We
note, however, that if Dr. Allens counsel had not conceded at oral argument
that Dr. Allens injury was purely economic in nature, and if this court
were to find that damages at law were otherwise inadequate, we would have
been required to address whether the speech was protected under the First Amendment
to the United States Constitution. See Gallant Ins. v. Amaizo Fed. Credit
Union, 726 N.E.2d 860, 868 (Ind. Ct. App. 2000)(Darden, J., concurring in part
and dissenting in part)(concluding that injunction was improper where economic injury was compensable
by money damages); but see Felsher v. University of Evansville, No. 82A04-9910-CV-455, 2000
WL 530873 (Ind. Ct. App., May 3, 2000)(holding that money damages as remedy
for injury to individuals reputation were inadequate and plaintiff was entitled to injunctive
Endodontics concerns the diagnosis and treatment of diseases of the tooth
pulp and/or infection of the root canal.
Footnote: We note the Indiana Code section 34-19-2-4 grants the trial court
authority to issue a TRO.
Footnote: On August 20, 1999, Dr. Allen obtained an
ex parte TRO.
R. 23. The only attempt to provide Daugherty with notice of
Dr. Allens intent to obtain an ex parte TRO was a single phone
message on the morning Dr. Allen filed the documents in court. We
note that Trial Rule 65(B) provides that [a] temporary restraining order may be
granted without written or prior notice to the adverse party or his attorney
. . . . After reviewing the record, it appears Dr. Allen
fulfilled the procedural requirements of Trial Rule 65(B) for obtaining an ex parte
TRO. See R. 5-13, 26-27.
Indiana Code section 34-19-2-4 provides in pertinent part that [a]fter filing
the complaint, the complainant may apply to the court for a preliminary injunction.
Also, Indiana Code section 34-19-2-7 provides in pertinent part that [i]f, at
the preliminary injunction hearing, the plaintiff proved by a preponderance of the evidence
that the indecent nuisance exists as alleged in the complaint, the court shall
issue a preliminary injunction . . . restraining the defendant and any other
person from continuing the indecent nuisance.
We note that defamation is that which tends to injure reputation
or to diminish esteem, respect, goodwill or confidence in the plaintiff, or to
excite derogatory feelings or opinions about the plaintiff. Kitco, Inc. v. Corporation
of General Trade, 706 N.E.2d 581, 587 (Ind. Ct. App. 1999). In
the case of slander, a communication is defamatory per se under well-settled common
law rules if it imputes: 1) criminal conduct; 2) a loathsome disease; 3)
misconduct in a persons trade, profession, office, or occupation; or 4) sexual misconduct.
Restatement (Second) of Torts § 570 (1977); Rambo v. Cohen, 587
N.E.2d 140, 145 (Ind. Ct. App. 1992), trans. denied.
Goodwill has been defined as the advantage or benefit which is
acquired by an establishment beyond the mere value of the capital stock, funds,
or property employed therein, in consequence of the general public patronage and encouragement
which it receives from constant or habitual customers on account of its local
position, common celebrity, or reputation for skill, or affluence, or punctuality, or from
other accidental circumstances or necessities, or even from ancient partiality or prejudices.
Porter v. Porter, 526 N.E.2d 219, 233 (Ind. Ct. App. 1988), trans. denied.
(quoting 38 Am.Jur.2d Goodwill § 1).