Stephens v. Jago Holdings

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

THOMAS S. STEPHENS, et al., Plaintiffs/Appellees,

v.

JAGO HOLDINGS LLC, Defendant/Appellant.

No. 1 CA-CV 20-0138
FILED 11-24-2020

Appeal from the Superior Court in Maricopa County
No. CV2019-004467
The Honorable Daniel G. Martin, Judge

VACATED AND REMANDED

COUNSEL

Stein and Stein, P.C., Mesa
By Henry M. Stein, Amy R. Wilson
Counsel for Plaintiffs/Appellees

Schern Richardson Finter, PLC, Mesa
By Aaron M. Finter
Counsel for Defendant/Appellant

MEMORANDUM DECISION

Judge David B. Gass delivered the decision of the Court, in which Presiding
Judge Jennifer M. Perkins and Judge Michael J. Brown joined.
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Decision of the Court

G A S S, Judge:

¶1 Thomas S. Stephens, acting on behalf of the estate of Thomas
C. Stephens, Mark Stephens, and Marketing Support Services, Inc.
(collectively, appellees) sued Jago Holdings LLC, alleging Jago holds
unpaid commissions belonging to them. The superior court granted a
preliminary injunction in appellees’ favor, enjoining Jago from using,
spending, dissipating, disbursing, encumbering, assigning, or otherwise
transferring the alleged unpaid commissions. Because appellees seek
money damages, the issuance of the preliminary injunction was an abuse
of discretion. We, therefore, vacate the injunction and remand the case to
the superior court.

FACTUAL AND PROCEDURAL HISTORY

¶2 This court views the facts in a light most favorable to
upholding the superior court’s ruling. IB Prop. Holdings, LLC v. Rancho Del
Mar Apartments Ltd. P’ship, 228 Ariz. 61, 63, ¶ 2 (App. 2011).

¶3 Appellees filed a complaint alleging breach of contract,
breach of the implied covenant of good faith and fair dealing, conversion,
and unjust enrichment. Appellees alleged they were entitled to money from
Jago arising from commissions Thomas C. Stephens (deceased) earned from
the sales of telecommunications services. In addition to a money judgment,
appellees sought injunctive relief to: (1) prevent Jago from “[u]sing,
spending, dissipating, disbursing . . . , encumbering, assigning or otherwise
transferring” the commissions they believed were owed to them; (2) order
Jago to deposit the commission payments on an ongoing basis with the
clerk of the superior court; and (3) order Jago to provide accountings of all
outstanding payments.

¶4 After an evidentiary hearing, the superior court granted a
preliminary injunction. The superior court’s signed order only found
appellees would suffer immediate and irreparable harm without the
injunction and could be left without an adequate remedy.

¶5 Jago timely appealed the preliminary injunction. This court
has jurisdiction under Article 6, Section 9, of the Arizona Constitution, and
A.R.S. § 12-2101.A.5.b.

ANALYSIS

¶6 Jago argues, among other things, the superior court abused its
discretion because appellees have an adequate remedy at law should they

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prevail on the merits given the relief they seek is solely monetary in nature.
We agree.

¶7 This court reviews an issuance of a preliminary injunction for
abuse of discretion. TP Racing, L.L.L.P. v. Simms, 232 Ariz. 489, 492, ¶ 8 (App.
2013). The superior court abuses its discretion when it: (1) applies the
incorrect substantive law or preliminary injunction standard; (2) bases its
decision on a clearly erroneous finding of fact that is material to the decision
to grant or deny the injunction; or (3) applies an acceptable preliminary
injunction standard in a manner that results in an abuse of
discretion. McCarthy W. Constructors, Inc. v. Phx. Resort Corp., 169 Ariz. 520,
523 (App. 1991). This court defers to the superior court’s factual findings
unless clearly erroneous but reviews its legal conclusions de novo. IB Prop.
Holdings, 228 Ariz. at 64, ¶ 5.

¶8 Here, the superior court needed to consider four equitable
factors: (1) whether there was a strong likelihood appellees would succeed
at trial on the merits; (2) the possibility of irreparable injury to appellees not
remediable by damages if the requested relief is not granted; (3) whether
the balance of hardships favors appellees; and (4) if public policy favors the
injunction. See Shoen v. Shoen, 167 Ariz. 58, 63 (App. 1990). These factors
have been condensed to a “sliding scale” in which appellees may establish
either: “1) probable success on the merits and the possibility of irreparable
injury; or 2) the presence of serious questions and that the balance of
hardships tips sharply in favor of [appellees].” Ariz. Ass’n of Providers for
Pers. with Disabilities v. State, 223 Ariz. 6, 12, ¶ 12 (App. 2009) (quotation
omitted). When damages can be proven with reasonable certainty and are
adequate to address the harm suffered, injunctive relief is generally not
appropriate. See IB Prop. Holdings, 228 Ariz. at 73, ¶¶ 10–11.

¶9 Because appellees do not face an “irreparable injury not
remediable by damages,” we conclude as a matter of law the preliminary
injunction was an inappropriate remedy. See id. Appellees characterize their
request as merely seeking to preserve their property. We are not convinced.
Indeed, appellees seek a money judgment in the amount of sales
commissions they believe Jago owes them. They sought the preliminary
injunction to guarantee a potential future judgment’s full satisfaction.

¶10 Appellees’ core claim is Jago owes them payment of the
commissions in the form of money. A commission is “a sum or percentage
allowed to agents, sales representatives, etc., for their services.” See Random
House Webster’s Unabridged Dictionary 412 (2d ed. 2001). Appellees
cannot reclassify their claims—for which they concede they seek a money

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judgment to satisfy—as merely seeking “property.” This court has long
recognized when damages are sought, the amounts can be ascertained, and
would remedy the harm, injunctive relief is inappropriate. See Cracchiolo v.
State, 135 Ariz. 243, 247 (App. 1983) (vacating a preliminary injunction
when damages sufficed as a remedy); accord Fin. Assocs., Inc. v. Hub Props.,
Inc., 143 Ariz. 543, 546 (App. 1984) (affirming denial of preliminary
injunction for the same reasons). True, money is personal property. But
money is fungible and not so unique as to require payment of any specific
dollars. Cf. Woliansky v. Miller, 135 Ariz. 444, 446 (App. 1983) (“Specific
performance is ordinarily available to enforce contracts for the sale of real
property because land is viewed as unique and an award of damages is
usually considered an inadequate remedy.”).

¶11 Nothing in the superior court’s analysis supports a conclusion
this case is an exception to that general rule. During the evidentiary hearing,
the superior court made no specific factual findings on the record to
establish appellees face a possibility of irreparable harm with no adequate
legal remedy. And the superior court’s signed order lacks factual support.
Findings of fact prompt judges to consider not just “the end results of their
inquiry, but the process by which they reached it.” Miller v. Bd. of Supervisors
of Pinal Cnty., 175 Ariz. 296, 299 (1993) (quoting United States v. Merz, 376
U.S. 192, 199 (1964)). “Without this explanation, an appellate court cannot
effectively review the decision-making process of the trial court.” Id.

¶12 Here, the superior court made no findings to support its
conclusion—appellees face irreparable harm—and it did not address the
other three factors it is charged with considering when weighing a
preliminary injunction. In the full context of the Shoen factor analysis,
appellees cannot meet their burden of showing irreparable harm for which
damages are insufficient. See 167 Ariz. at 63. The money damages they seek
are ascertainable and sufficient to remedy their harm should they prevail.

¶13 In short, there is no need to enjoin Jago from using these
specific funds. Should appellees prevail, Jago simply may pay the amount
proven at trial with the money it has at that time. Even assuming appellees
face present, irreparable harm by not having this money, the injunction
ordered Jago not to use or spend the money, to deposit it with the superior
court, and to account for it. The injunction does nothing to cure the
purported harm of appellees not having the funds now and amounts to an
abuse of discretion. Because this issue is dispositive, we decline to reach the
other issues Jago raises. See Sw. Barricades, L.L.C. v. Traffic Mgmt., Inc., 240
Ariz. 139, 142, ¶ 17 n.3 (App. 2016).

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ATTORNEY FEES

¶14 Jago requests its attorney fees incurred on appeal pursuant to
ARCAP 21, and A.R.S. §§ 12-341.01 and -349. We decline to award attorney
fees at this stage, but the superior court may reconsider any requests for
fees on remand, including fees incurred in this appeal, pending the
outcome of this litigation. See Eans-Snoderly v. Snoderly, 249 Ariz. 552, 559,
¶ 27 (App. 2020).

CONCLUSION

¶15 For the above reasons, we vacate the preliminary injunction
and remand the case to the superior court.

AMY M. WOOD • Clerk of the Court
FILED: AA

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