Arkansas Oklahoma Gas Corporation v. Waelder Oil & Gas, Inc. and Southwestern Glass Co., Inc.

Annotate this Case
ARKANSAS OKLAHOMA GAS CORPORATION v. WAELDER
OIL & GAS, INC. and Southwestern Glass Co.,
Inc.

97-830                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered April 16, 1998


1.   Injunction -- attorney's fees not recoverable in injunction
     cases -- when attorney's fees generally awarded -- statute
     allowing award of attorney's fees inapplicable. -- Attorney's
     fees are not recoverable in injunction cases; the general rule
     in Arkansas is that attorney's fees are not awarded unless
     expressly provided for by statute or rule; Ark. Code Ann. 
     16-22-308 (Repl. 1994) allows for the award of attorney's fees
     in certain civil actions, including actions for breach of
     contract; however, this statute was inapplicable since no
     contract breach was argued, and appellant's surety bond in no
     way specified or provided for attorney's fees in these
     circumstances.

2.   Injunction -- trial court awarded attorney's fees -- case upon
     which award based misinterpreted -- no other supporting
     citations provided. -- In awarding attorney's fees conditioned
     upon appellant's bond, the trial court relied on the Citizens'
     Pipe Line Co. v. Twin City Pipe line Co., 183 Ark. 1006, 39 S.W.2d 1017 (1931) case; however, contrary to the trial
     court's ruling, that decision held that such fees are not
     allowed as damages when an injunction has been dissolved; no
     other Arkansas statute, rule, or case law was cited by the
     trial court or the appellees which provided for attorney's
     fees when an injunction has been granted erroneously and a
     bond had been issued to effectuate the injunction.

3.   Injunction -- surety bond's language failed to support trial
     court's award of attorney's fees -- neither appellee provided
     evidence of damages. -- The language of the surety bond
     provided by appellant failed to support the trial court's
     award of attorney's fees; as provided by the appellant's bond,
     the appellees were entitled to damages, costs, and attorney's
     fees incurred in the event that the temporary injunction
     granted appellant was set aside; however, neither appellee
     presented evidence of damages, and they did not contend
     otherwise on appeal; neither appellee showed that it incurred
     attorney's fees as authorized by statute, rule, or case law.

4.   Appeal & error -- appellee's argument unsupported by authority 
     -- supreme court declined to overrule case. -- Appellee's
     request that the supreme court overrule the Citizens Pipe Line
     Co. case and hold attorney's fees are recoverable in any
     injunction case was supported by cites only to secondary legal
     authority; appellee offered no convincing argument why the
     present law regarding attorney's fee awards should be
     overruled; the request was declined.
     
     Appeal from Crawford Chancery Court; David Switzer,
Chancellor; reversed and remanded.
     Daily & Woods, P.L.L.C., by:  Jerry L.Canfield, for appellant.
     Warner, Smith & Harris, PLC, by:  Joel D. Johnson, for
appellees.

     Tom Glaze, Justice.
     This appeal is the second one between the parties.  See
Southwestern Glass Co. v. Arkansas Oklahoma Gas Corp., 325 Ark.
378, 925 S.W.2d 164 (1996).  In Southwestern Glass I, we held that
Arkansas Oklahoma Gas (AOG) failed to show how Southwestern Glass's
proposed pipeline to be constructed in Ft. Smith would be
inconsistent with the city's use of its right-of-way.  Because the
trial court had found differently and had issued a temporary
restraining order enjoining Southwestern Glass and its contractor,
Waelder Oil & Gas, Inc., from completing construction of
Southwestern Glass's pipeline, we reversed and remanded with
directions that the trial court's injunction be dissolved.
     On remand, the trial court held a hearing to permit
Southwestern Glass and Waelder the opportunity to show any damages
they may have incurred which resulted from the erroneous entry of
the trial court's temporary injunction.  See Citizens' Pipe Line
Co. v. Twin City Pipe Line Co., 183 Ark. 1006, 39 S.W.2d 1017
(1931); see also Ark. Code Ann.  16-113-405 (1987) (assessment of
damages upon dissolution of injunction or restraining order), and
 16-113-203 (1987) (bond for damages and costs required for
injunction to become effective); and Ark. R. Civ. P. 65.  After the
hearing, the trial court ruled that Southwestern Glass and Waelder
presented no evidence of damages that they had sustained between
the time the temporary restraining order was issued on June 28,
1995, and when it was dissolved on July 18, 1996.  The trial court
further declared Southwestern Glass and Waelder were not entitled
to attorney's fees under case law or statute, but it still made an
award based on exhibits pertaining to attorney's fees incurred by
Southwestern Glass in the amount of $3,978.35, and Waelder in the
sum of $8,239.95, as a condition of the surety bond that AOG had
obtained when the restraining order was granted.  While
Southwestern Glass and Waelder do not appeal the trial court's
decision denying them damages, AOG appeals, arguing the trial court
erred in making its award.  AOG's argument has merit.
     We initially point out that the trial court fully recognized
the long-established rule in Arkansas that attorney's fees are not
recoverable in injunction cases.  Citizens' Pipe Line Co., 183 Ark.
1006, 39 S.W.2d 1017 (1931); Tolbert v. Samuels, 229 Ark. 676, 317 S.W.2d 715 (1958); Oliphant v. Mansfield & Co., et al., 36 Ark. 191
(1880); McDaniel v. Crabtree, 21 Ark. 431 (1860).  Moreover, the
general rule in Arkansas is well settled that attorney's fees are
not awarded unless expressly provided for by statute or rule. 
Security Pac. Housing Servs., Inc. v. Friddle, 315 Ark. 178, 866 S.W.2d 375 (1993); Chrisco v. Sun Ind., Inc., 304 Ark. 227, 800 S.W.2d 717 (1990).  And while not argued, we mention Ark. Code Ann.
 16-22-308 (Repl. 1994), which allows for the award of attorney's
fees in certain civil actions, including actions for breach of
contract.  However, this statute fails to help Southwestern Glass
and Waelder, since no contract breach is argued here, and as
discussed in this court's opinion, infra, AOG's surety bond in no
way specifies or provides for attorney's fees in these
circumstances.
     In awarding attorney's fees conditioned upon AOG's bond, the
trial court relied on the following wording from the Citizens' Pipe
Line case:
          The rule is thus stated in chapter on Injunctions,
     32 C.J.,  744:  "Complainant's liability for wrongful
     issuance of an injunction at his instance may, of course,
     be fixed by the bond that he was required to give as a
     condition to the granting of the injunction.  But,
     although there is contrary authority, the general rule,
     unless changed by statute, is that, without a bond for
     the payment of damages or other obligations of like
     effect, a party against whom an injunction has been
     wrongfully issued can recover no damages unless he can
     make out a case of malicious prosecution by showing
     malice and want of probable cause on the part of the
     party who obtained the injunction."  183 Ark. at 1010, 39 S.W.2d  at 1018 (1931).
     First, we note that, contrary to the trial court's ruling that
the foregoing language somehow authorizes attorney's fees, that
decision, as already discussed hereinabove, actually holds that
such fees are not allowed as damages when an injunction has been
dissolved.  In this respect, we find it telling that the trial
court, Southwestern Glass or Waelder cite no Arkansas statute,
rule, or case law which provides for attorney's fees when an
injunction has been granted erroneously and a bond had been issued
to effectuate the injunction.
     Second, AOG's surety bond's language, itself, fails to support
the trial court's award of attorney's fees.  In this respect, the
bond reads as follows:
          Surety, on behalf of itself and its principal [AOG],
     acknowledges their indebtedness to defendants in the
     amount of $25,000.00 conditioned on the payment by [AOG]
     of all damages, costs, and attorney's fees incurred by
     defendants in the event that it is finally decided that
     [AOG] is not entitled to the temporary restraining order
     entered in the captioned litigation.
As provided by AOG's bond, Southwestern Glass and Waelder were
entitled to damages, costs, and attorney's fees they incurred in
the event the temporary injunction granted AOG was set aside. 
However, neither Southwestern Glass nor Waelder presented evidence
of damages and they do not contend otherwise on appeal.  Neither
Southwestern Glass nor Waelder has shown it has incurred attorney's
fees as authorized by statute, rule, or case law.
     Finally, Waelder urges us to reconsider this court's decision
in Citizens Pipe Line Co. and hold attorney's fees are recoverable
in any injunction case.  To support this requested change in law,
Waelder cites only to secondary legal authority, 42 Am. Jur. 2d,
Injunctions  373 (1969), and offers no convincing argument why our
present law regarding attorney's fee awards should be overruled. 
See Sanders v. County of Sebastian, 324 Ark. 433, 922 S.W.2d 334
(1996).  We decline Waelder's request.
     Reversed and remanded.
     Thornton , J., not participating.
     Brown and Imber, JJ., concur for the added reason that the bond
language regarding "damages, costs, and attorney's fees" is in the
conjunctive.  An award of attorney's fees is inapproriate absent an
award of damages.