Sizeler Prop. Inv'rs, Inc. v. Gordon Jewelry Corp. - 544 So. 2d 53 (La. Ct. App. 1989)

Rule:

Exception to specific performance is to be made where performance is impossible, greatly disproportionate in cost to actual damage caused, no longer in the creditor's interest, or would have substantial negative effect upon the interests of third parties.

Facts:

On September 19, 1979 Sizeler Property Investor's predecessor in interest leased commercial space in Southland Mall in Houma, Louisiana to Leonard Krower & Son, Inc., a Louisiana corporation. Krower at this time was a subsidiary of the defendant, Gordon Jewelry Corporation. Gordon guaranteed Krower's obligations by guaranty. Krower assigned its rights, title, and interests under the aforementioned lease to BCS, Inc. on February 18, 1987. Krower and Gordon remained bound and fully liable for performance of all obligations. BCS later became United Jewelers. The instant dispute arose when, on January 23, 1988, United, doing business as Leonard Krower, discontinued operations of the aforementioned store. Although United continued to pay timely rent, plaintiff, Sizeler, has filed suit, basing its cause on a "continuing operations" clause contained in the lease. Gordon made exception of no cause of action and prematurity. Subsequently, Sizeler moved for summary judgment and/or a mandatory writ of preliminary injunction. The trial court denied the defendant's exceptions of no cause of action and prematurity. Sizeler's request for a mandatory writ of preliminary injunction was granted, providing for the specific performance of reopening and operating the store in question as contemplated under the lease between Gordon, United and Sizeler. 

Issue:

Did the trial court err in granting the writ of preliminary injunction in favor of Sizeler?

Answer:

Yes.

Conclusion:

In order to obtain a preliminary injunction, the moving party must show irreparable injury, loss or damage that would result if the injunction was not granted. Irreparable injury is a loss which cannot be measured by a pecuniary standard. Additionally, the moving party must make a prima facie showing that it will prevail on the merits of the suit. Sizeler has failed to show irreparable harm. It has asserted a claim for liquidated damages or, "delay" damages, under the lease and any losses suffered would clearly be of a monetary nature. Further, Sizeler has also failed to meet its burden of proof regarding the likelihood of success at a trial on the merits, thus failing to meet the requirements for injunctive relief under article 3601. More importantly, specific performance in this instance to be impracticable. Louisiana Civil Code article 1986 comments state as follows: "Specific performance is also impracticable when it requires the continuous supervision of the court." In the case at hand, implementing specific performance clearly requires not only the reorganization of a no longer existing business, but supervision by the court of the reopening and running of the business as well. Analogy may be drawn to the case of Caddo Oil and Mining Co. v. Producers' Oil Co., 134 La. 701, 64 So. 684 (1914) where the Supreme Court refused to order the specific performance of drilling an oil well because to do so would require the constant supervision of the court. Although an old case, the law presented remains sound. Due to the circumstances of this case, we find specific performance to be virtually impossible, warranting the application of the exception.