Appeal from the Order of the Court of Common Pleas of Allegheny County, Civil Division at No. GD96-6901. Before FARINO, J.
Before Del Sole, Popovich and Hester, JJ. Opinion BY Popovich, J. Del Sole, J. did not participate in the consideration or decision of this case.
The opinion of the court was delivered by: Popovich
This is an appeal from the May 6, 1996, order of the Court of Common Pleas of Allegheny County granting Sheridan Broadcasting, Incorporated's (Sheridan) motion for a preliminary injunction, *fn1 enjoining NBN Broadcasting, Inc. (NBN) from obstructing and injuring the business and operations of the American Urban Radio Networks (AURN), a partnership formed by Sheridan and NBN. *fn2 On appeal, NBN argues that the lower court erred in granting the preliminary injunction for the following reasons: (1) The record failed to establish that Sheridan had a clear right to the relief requested; (2) The preliminary injunction improperly altered the status quo; (3) The record failed to establish irreparable harm; (4) Sheridan failed to come before the lower court with "clean hands." *fn3 We affirm those paragraphs of the preliminary injunction preventing NBN from interfering with employee relations and seizing confidential documents from Davenport, Jr.'s office. However, we reverse those paragraphs of the preliminary injunction preventing NBN from interfering with the relocation of AURN's New York City office and the billing department.
The facts viewed in the light most favorable to Sheridan, the winner at the lower court level, are as follows: AURN was formed for the primary purpose of marketing and selling commercial advertising time on Sheridan and NBN's radio networks. The partnership agreement, dated December 13, 1991, provided that "operations of the partnership shall be the responsibility of a five-member management committee." The five-member committee was comprised of two members representing Sheridan, two members representing NBN, and a fifth seat which remained vacant until there was a voting deadlock, at which time Ronald R. Davenport, Sr., was authorized to appoint a fifth member. On October 16, 1995, by a vote of three to two, the management committee voted to hire Skip Finley and Richard Boland. On November 28, 1995, by a vote of three to two, the management committee voted to move AURN's New York City office to Washington, D.C., to move the billing department in New York City to AURN's Pittsburgh office, and to authorize the chief operating officer to review the operations of the marketing department and make necessary personnel changes. *fn4
NBN was dissatisfied with the management committee's adoption of the resolutions. NBN then engaged in a pattern of conduct designed to disrupt and impede the implementation of the resolutions. Specifically, NBN interfered with employee relationships. NBN contacted AURN's payroll company and threatened legal action if the company issued paychecks to Finley and Boland. As a result, the payroll company refused to process payroll checks for any of AURN's employees. On April 15, 1996, NBN purported to fire unilaterally Finley, Boland and Davenport, Jr., and hired security guards to prevent them from entering AURN's New York City office building. On April 16, 1996, NBN broke into a locked cabinet in Davenport Jr.'s office in order to remove confidential attorney-client documents. NBN also prevented AURN employees in the Pittsburgh office from communicating with AURN employees in the New York City and Chicago offices.
Moreover, NBN prevented the transmission of sales orders and interfered with the operation of the billing department in AURN's Pittsburgh office. After the billing department was relocated to Pittsburgh, NBN contacted the Radio Computing Service (RCS), the service which supplied AURN with the computer program used by the billing department, and requested that the computer program be installed in NBN's New York City office. In response, RCS contacted Sheridan and threatened legal action. NBN then refused to send its billing or advertising information to the Pittsburgh office.
NBN also interfered with the relocation of AURN's New York City office to Washington, D.C. While Sheridan was negotiating with a realtor in Washington, D.C., NBN contacted the realtor and threatened legal action if the realtor entered into a lease agreement with AURN. NBN also published an article in a trade publication claiming that AURN was not empowered to enter into a lease agreement without NBN's express consent.
On May 3, 1996, Sheridan filed a complaint and a motion for a preliminary injunction in the lower court, which was granted. Following the denial of NBN's motion to vacate the preliminary injunction, this appeal followed.
An appellate court's review of the grant or denial of a preliminary injunction is limited to a determination of whether any apparently reasonable grounds existed for the action taken by the trial court; appellate courts will not review the merits of the controversy itself. The Superior Court may interfere with [the lower court's] decision regarding a preliminary injunction only if the certified record reveals that no grounds exist to support the decree, or that the rule of law relied upon was either palpably erroneous or misapplied. In order to sustain a preliminary injunction, the plaintiff's right to relief must be clear, the need for relief must be immediate, and the injury must be irreparable if the injunction is not granted.
Sovereign Bank v. Harper, 449 Pa. Super. 578, 674 A.2d 1085, 1091 (1996) (citations omitted) (emphasis in original).
NBN's first argument is that the record failed to establish that Sheridan had a clear right to the relief requested. NBN is correct in arguing that Sheridan must prove that it has a clear right to enjoin NBN's actions before it is entitled to injunctive relief. However, this does not mean that Sheridan must establish its claim absolutely. Id. "Pennsylvania law places the burden upon the party seeking the injunction to establish his or her own rights as well as the inequitable nature of the defendant's conduct. Nevertheless, the defendant must show that his or her conduct was reasonable or that a defense exists to the plaintiff's claim." 674 A.2d at 1092 (citations omitted).
At issue in this case is the interpretation of the partnership agreement. If, on the merits, Sheridan is able to prove that the partnership agreement permitted Davenport, Sr., to appoint Davenport, Jr., to vote on the resolutions at issue, and that NBN acted improperly in light of these resolutions, an equitable remedy would be available for any ...