ORDERS:
ORDER
I. Introduction
In this matter Nancy P. Norris (Norris) seeks to have funds paid to her from a $1,000 cash bond posted by Mrs. Henry C. Robertson (Robertson). Robertson posted the bond after obtaining a temporary restraining order (TRO). The TRO prevented Norris from proceeding with the building of a dock. Under the facts of this case, eight hundred ($800) of the thousand ($1,000) dollars shall be paid to Norris with the remaining two hundred ($200) dollars returned to Robertson.
A. Background
The South Carolina Department of Health and Environmental Control, Office of Ocean and Coastal Resource Management (OCRM) determined it would issue a dock permit to Norris. Robertson opposed the permit and requested a contested case hearing before the Administrative Law Judge Division (ALJD). In furtherance of Robertson's opposition to the permit, on November 29, 1995, Robertson obtained from the ALJD a TRO halting Norris's construction of the dock. As a part of the order granting the TRO, Robertson was required to post a cash bond as security for any resulting costs incurred by Norris if it was later determined that Norris was wrongfully enjoined.
Since the TRO was due to expire on December 8, 1995, Robertson filed a Motion for Temporary Injunction seeking to continue the prohibition on building the dock during the time the matter was pending before the ALJD. After a hearing, a December 6, 1995, order of the ALJD denied the temporary injunction. Thus, since the TRO expired two days later on December 8, 1995, Norris was no longer impeded in the subsequent completion of her dock. However, the final fate of the dock was still very much in doubt.
That unresolved doubt brought the matter to a hearing before the ALJ on April 30, 1996. At the hearing, both the merits of the dock permit and the additional costs incurred by Norris due to the TRO were presented. During the hearing, Norris established that the resulting delay cost her $800.
Following the hearing, an order was issued denying Norris’s dock permit on May 31, 1996. Further, a separate Order also dated May 31, 1996, informed Norris that she was not entitled to any of the $1,000 posted by Robertson since the dock was an unpermitted structure.
After a series of appeals and remands involving the Coastal Zone Management Appellate Panel and the circuit court, Norris ultimately obtained her permit. The final resolution of the permit dispute resulted from a December 4, 1998 unappealed decision of the Coastal Zone Management Appellate Panel granting Norris the permit she sought.
B. Positions of Parties
The remaining issue is the claim by Norris against the $1,000 cash bond posted by Robertson. Robertson opposes Norris’s request for the bond funds, and Robertson reasons that the issuance of the TRO was within the judge’s discretion and was necessary to maintain the status quo pending a full and final adjudication on the merits. Accordingly, Robertson’s position is that the TRO was issued as a matter of discretion and did not wrongfully enjoin Norris. Thus, Robertson argues Norris is not entitled to the proceeds.
Norris, on the other hand, argues that she has prevailed on the permit dispute and that such a conclusion demonstrates she was wrongfully enjoined. Accordingly, she asserts she should be compensated for the costs of the delay in constructing her dock.
II. Analysis
The ALJD Rules provide the procedures for remedial writs such as the injunctions involved in this dispute. ALJD Rule 16. Specifically, Rule 16 provides that the administrative law judge may issue remedial writs as are necessary to give effect to its jurisdiction, and, with respect to injunctions, requires that the procedure in Rule 65, SCRCP must be followed. Under the circumstances of this case, SCRCP Rule 65 results in eight hundred ($800) dollars of the thousand ($1,000) dollars being paid to Norris with the remaining two hundred ($200) dollars returned to Robertson.
A. Requirements of SCRCP Rule 65(c)
Pursuant to Rule 65(c), SCRCP, the issuance of a TRO requires the giving of security for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained. Such a posting of security is proper since the party that is the object of the injunction has not had an opportunity to fully adjudicate his or her rights. Chambron v. Lost Colony Homeowners Ass’n, 317 S.C. 43, 451 S.E.2d 410 (Ct. App. 1994).
B. Application of SCRCP Rule 65(c)
Since the security provision in South Carolina’s Rule 65(c) mirrors the language relied upon by other states as well as the language used in the Federal Rules of Civil Procedure, case law from other jurisdictions is instructive. In general, the examination of two factors is determinative of this controversy. Did Norris prevail in obtaining the permit? If yes, was Norris at all times entitled to construct the dock?
1. Prevailing Party
No recovery for damages resulting from an injunction can be had unless a final judgment on the case is entered in favor of the party enjoined, i.e., Norris. Meeker v. Stuart, 188 F.Supp. 272 (D.D.C 1960). Here, Norris satisfies the threshold requirement for a recovery against the security bond since she has received a final judgment on the dock permit and in that judgment she has prevailed.
2. Right to Construct
a. Introduction
Second, Norris cannot recover against the security fund unless she was wrongfully enjoined. Marshall Durbin & Co. v. Jasper Utilities Bd., 437 So.2d 1014 (Ala.1983) (in order for a party to be liable under a Rule 65(c) damages matter, the party enjoined must have been wrongfully enjoined). A party has been wrongfully enjoined "if it is ultimately found that the enjoined party had at all times the right to do the enjoined act." Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 910 F.2d 1049, 1054 (2nd Cir.1990); see also Sierra Club v. Kiawah Resort Associates, 318 S.C. 119, 456 S.E2d 397 (1995) ("As we have found the permits were properly issued, an injunction would have been improper.").
In making this "wrongfulness inquiry" the court seeks to determine whether the enjoined party had a legal right to act as it intended to act before the injunction prohibited the carrying out of that act. Guzman v. Local 32B-32J, Service Employees Intern. Union, AFL-CIO, 72 F.3d 260 (2nd Cir.1995). Put another way, the question is whether Norris "ought not to have been enjoined" under the circumstances of this case. Russell v. Farley, 105 U.S. 433, 439 (1881).
b. Right to Construct a Dock
One ought not be enjoined if one has the right to perform the act that another party seeks to enjoin. Whether one has a right to perform an act must be decided by examining the specific time frame within which the party seeks to perform the act. For the instant case, the issue is whether Norris had the right to build her dock over public trust property even though a contested case was underway at the time she began to build. Under the circumstances of this case, Norris had the right to build the dock during the contested case period.
Norris’s right to construct during the contested case stage was given to her by OCRM’s preliminary granting of the permit. Under the terms of the permit, OCRM notified Norris of the following:
CAUTION: Section 48-39-150(D) allows any person adversely affected by the issuance of a OCRM permit to appeal the decision to the full OCRM by filing a written Notice of Intent to Appeal within 15 days after notification of the permit’s issuance. In the event of an appeal of the decision to issue this permit, the OCRM reserves the right to order a stay of any use or activity authorized herein pending a final decision by the full OCRM when, in its judgment, the interests of the public would be best served.
Under this language, Norris was in effect permitted to build the dock even before a final decision was reached by OCRM. That right to build came with a warning that Norris’s activity could be stayed. That possibility obviously occurred in this case since Norris was stopped in her dock building for ten days. Accordingly, Norris had at all times the right to construct the dock and, having been ultimately found to be entitled to the dock permit, was "wrongfully enjoined" for purposes of Rule 65(c), SCRCP.
Because Norris has established that she incurred $800 in additional dock construction costs as a result of the TRO, I find that she should be awarded $800 from the bond funds. I further find that it is appropriate to return the remaining $200 of the bond funds to Robertson.
III. Order
Based upon the foregoing, it is hereby ordered:
On the fifteenth day after the date of this Order, eight hundred ($800) dollars from the one thousand ($1,000) dollar bond posted by Mrs. Henry C. Robertson shall be paid by the Clerk of the Administrative Law Judge Division to Dr. Nancy P. Norris. On the same fifteenth day, the remaining Two Hundred ($200) dollars shall be paid by the Clerk of the Administrative Law Judge Division to Mrs. Henry C. Robertson.
AND IT IS SO ORDERED.
__________________________________
RAY N. STEVENS
Administrative Law Judge
Dated: April 5, 1999
Columbia, South Carolina |
