Understanding Injunctions in Commercial Litigation and Real Estate Disputes

Understanding Injunctions in Commercial and Real Estate Litigation

What is your legal recourse when your neighbor constructs a new fence on your property? When your business partner withdraws money from a joint business account and loots the company to the point of nearing bankruptcy? Or when a co-owner of property tries to sell their interest in the property despite it being in violation of an agreement between you and the other owner? These are all scenarios where obtaining an Injunction would be helpful to preserve and safeguard your property.

An injunction is an equitable remedy available when the “damages” you are facing are for something other than monetary damages. An Injunction is a Court Order that restrains a person or entity from doing something, or alternatively, an order which compels a person to act in a certain manner or to continue to act in order to avoid causing harm, such as continuing a business operation or stopping the transfer of an asset. Injunctions can be  temporary or permanent depending on the alleged harm and the stage of the case.

The New Jersey Superior Court is divided into divisions, and requests for injunctions are normally heard by a Judge in the Chancery Division of the Superior Court The Chancery Division handles cases where the relief is primarily “equitable” rather than monetary, but the cases also include demands for compensation as well.

What is an example of an Injunction?

Example: your neighbor hires a fence company to install a fence between your property lines. They drive the fence posts into the ground, but do not finish the entire fence. You look out your window and see that two of the posts are certainly on your property, and they in fact block access to your driveway. You now cannot enter or exit your driveway, and you have no other location to park your car. You can file an Order to Show Cause requesting an Injunction that requires your neighbor to remove the fence posts and restore your access to your garage. This would return the properties to the “status quo” prior to the neighbor’s objectionable conduct. The Court would likely grant an injunction in this matter since the harm is small but irreparable and it seems that the fence posts were clearly placed on your property. The result would be an Order demanding your neighbor remove the fence posts until the ownership of the property or the appropriate boundaries could be determined by the Court.

Example: You and your business partner have a joint business checking account. You recently reviewed the account statements, and there are substantial withdraws made by your business partner without any explanation. You ask why they were made, and the partner cannot or does not respond. You may be able to request an injunction prohibiting your business partner from withdrawing additional funds if it would bankrupt the business or irreparably harm the business, or you could have the court temporarily place the finances under the control of a receiver or custodian.

How to obtain an Injunction?

In order to have a chance at receiving an injunction you must apply to the Court and satisfy a number of factors. The factors the Court will consider when deciding whether to grant a preliminary injunction are whether:

(1) It is necessary to protect from irreparable harm;

(2) Whether the legal right underlying the claim is unsettled;

(3) Whether the applicant has made a preliminary showing of a reasonable probability of ultimate success on the merits; and

(4) The relative hardship to the parties in granting or denying injunctive relief.

The factors necessary to prevail on a request for preliminary injunction are stem from the oft-cited case of Crowe v. De Gioia, 90 N.J. 126 (1982). The moving party must present evidence supporting these factors, and if a party is able to meet these requirements, or can present a compelling argument to satisfy the elements, then the Court may grant the preliminary injunction against the other party.  Even if a person is unable to satisfy all of the Crowe factors, the Court may apply a more flexible approach where the preliminary injunction merely seeks to maintain the “status quo.” This notion is routinely attributed to the case of Waste Mgmt. of N.J., Inc., v. Union Cty., Utils. Auth.

How to Satisfy the Factors for a Preliminary Injunction?

Irreparable harm can be satisfied by showing that in the absence of injunctive relief the person or property would suffer harm that is substantial, imminent, and cannot be rectified should the harm continue. The Court focuses on the immediate harm to a person and property and the applicant must show proof of the likelihood of the harm. Where an award of monetary damages can make the aggrieved party “whole” then it may be difficult to show irreparable harm, and therefore difficult to obtain an injunction.

The second and third Crowe factors require the Court to determine whether the material facts are in dispute and whether the applicable law is settled. These factors are highly fact sensitive and require the Court to review evidence and hear testimony regarding the request for injunction.

Lastly, the Court is required to balance the relative hardships that result if the Court were to grant or deny the preliminary injunction. The Court will inquire into the effects of the injunction on each party and the relative hardship the injunction would cause compared to the benefit of granting or denying the request. The Court may also consider the harm or benefit the injunction may provide to other individuals and the public in the Court’s consideration of this factor.

Overall, the Court’s consideration of a request for a preliminary injunction is usually highly fact specific. Preliminary Injunctions are routinely brought before the Court in an Order to Show Cause, which is a legal filing that requests the Court provide relief in a more “immediate” fashion as compared to handling the matter in the normal process.

When to do after you obtain an Injunction?

If you are able to satisfy the standard for the granting of a preliminary injunction then the Court has agreed with your position that an injunction was required to protect from irreparable harm. The Court will Order the other party to cease acting or compel the party to act in a certain manner. At that point, you may proceed with the other matters involved in your legal dispute, and perhaps obtain a permanent injunction if necessary. If the other person or party fails to abide by the Court’s order and injunction, then you may have grounds to bring a motion for attorneys fees and costs, along with sanctions depending on the other person’s inability to comply.

If you believe that you require an injunction, we can help you proceed before the Court and obtain an injunction to protect your person and property. If you have any questions about injunction in New jersey, feel free to contact our law firm at 609-522-7530 or fill out an online form.