Mid-America Tire, Inc. v. PTZ Trading Ltd. - 2002-Ohio-2427, 95 Ohio St. 3d 367, 768 N.E.2d 619

Rule:

In determining the propriety of injunctive relief, adequate remedy at law means that the legal remedy must be as efficient as the indicated equitable remedy would be; that such legal remedy must be presently available in a single action; and that such remedy must be certain and complete.

Facts:

The buyers contended that the overseas seller's agents made certain false promises and representations concerning the sale of more lucrative summer tires in order to induce the American buyers to purchase and open a letter of credit securing the purchase of less lucrative mud and snow tires, many of which could not legally be imported or sold in the United States. The buyers then instituted an action pursuant to Ohio Rev. Code Ann. § 1305.08(B), alleging that honoring the letter of credit would facilitate and consummate the seller's fraud. The trial court found that fraud in the inducement of the issuance of a letter of credit was grounds for a court to grant injunctive relief against the payment of such letter of credit to the beneficiary who perpetrated such fraud. The court of appeals reversed, holding that the buyers had an adequate remedy at law. The buyers challenged the appellate court’s decision.

Issue:

Under the circumstances, were the buyers entitled to injunctive relief?

Answer:

Yes.

Conclusion:

The Court noted that in order to be considered adequate, the legal remedy must "be of such a nature that full indemnity may be recovered without a multiplicity of suits." Moreover, the adequacy of the putative legal remedy was also dependent upon whether "damages might be reasonably estimated." In the present case, an action to recover damages for fraud would not be an adequate legal remedy because it would not be as prompt, efficient, and practical as the injunction issued by the trial court, and would not provide buyers with certain and complete relief in a single action. The pursuit of such a remedy would likely entail a multiplicity of suits against a number of defendants in several jurisdictions. The damages that the buyers might seek to recover in an action for fraud would be difficult to estimate because of the near impossibility of determining the quantity of winter and summer tires that could or would have been seasonably marketed together and separately, the quantity of the "DA/2C" and other tires not marketable in the United States that could have been sold overseas, and the appropriate market conditions, cost/price differential, and quantity of offered or promised units. Accordingly, the Court found that injunctive relief should not be refused on the basis that the buyer has an adequate remedy at law. The Court, thus, reversed the judgment of the appellate court.