Part 3: Specific Performance

The question of whether or not ORT was likely to succeed on the merits of its claims against HRS and McChesney, the fourth and final element necessary for the granting of a preliminary injunction, proved to be the most difficult question for the court.

Was ORT likely to prevail on is claim of specific performance of the land contract? HRS, unsurprisingly, argued that ORT was not likely to succeed on the merits, and therefore the preliminary injunction should not have been granted by the circuit, and should be vacated by the appellate court.

Its first argument was that the mortgage taken by Agri-Source was superior to the right of ORT to purchase the land, and therefore ORT would not be able to exercise its right of specific performance because doing so would destroy the rights of a superior note-holder in the property. The Appellate Court was decidedly cool to this line of reasoning. In terms of establishing this element for a preliminary injunction, it is not necessary to show that a party would actually prevail on a claim, just that it had raised a fair question regarding its claim that it might be able to succeed.

The court then explained that, as an equitable remedy, specific performance is designed to enable courts to reach just and equitable outcomes, and issues such as breaches of fiduciary duty, and the doctrines of merger and unclean hands could affect such a ruling. Based on the facts in evidence,  McChesney’s attempts to hinder the deal to serve his own interests raised enough questions such that it was proper for the circuit court to issue the injunction, and thereby preserve the status quo until the process of litigation had shed more light on the matter.

The final HRs arguments will be discussed in the next part.

Trackbacks (0) Links to blogs that reference this article Trackback URL
Comments (0) Read through and enter the discussion with the form at the end