                                                                         FILED
                                                                     Aug 31 2018, 6:56 am

                                                                         CLERK
                                                                     Indiana Supreme Court
                                                                        Court of Appeals
                                                                          and Tax Court




ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
Andrew W. Hull                                             A. Richard M. Blaiklock
Michael R. Limrick                                         Charles R. Whybrew
Evan D. Carr                                               LEWIS WAGNER, LLP
HOOVER HULL TURNER LLP                                     Indianapolis, Indiana
Indianapolis, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

Whitesell Precision                                        August 31, 2018
Components, Inc.,                                          Court of Appeals Case No.
Appellant-Plaintiff,                                       18A-PL-848
                                                           Appeal from the Marion Superior
        v.                                                 Court
                                                           The Honorable Heather A. Welch,
Autoform Tool &                                            Judge
Manufacturing, LLC,                                        Trial Court Cause No.
Appellee-Defendant.                                        49D01-1610-PL-36015




Bailey, Judge.




Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018                           Page 1 of 14
                                             Case Summary
[1]   Whitesell Precision Components, Inc. (“Whitesell”) brings this interlocutory

      appeal, pursuant to Indiana Appellate Rule 14(A)(5),1 challenging the trial

      court’s refusal to dissolve a preliminary injunction compelling Whitesell to

      provide automotive component parts to Autoform Tool & Manufacturing, LLC

      (“Autoform”), pending resolution of the merits of litigation between the parties.

      Whitesell presents the sole issue of whether the trial court abused its discretion

      in refusing to dissolve the preliminary injunction issued pursuant to the parties’

      agreement. We affirm.



                              Facts and Procedural History
[2]   Whitesell is in the business of manufacturing and distributing engineered,

      specialty, and standard components and parts used in various industries,

      including in the assembly and manufacture of automobiles. 2 Autoform is in the

      business of manufacturing components used in the assembly and manufacture

      of automobiles. Autoform uses injector cups supplied by Whitesell to produce

      fuel rail assemblies that Autoform sells to Hitachi America, Ltd. (“Hitachi”).




      1
       Indiana Appellate Rule 14(A)(5) provides: “Appeals from the following interlocutory orders are taken as a
      matter of right … Granting or refusing to grant, dissolving, or refusing to dissolve a preliminary injunction[.]”
      2
        The facts are derived from the trial court’s order of January 5, 2017 granting Autoform a temporary
      restraining order.

      Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018                                  Page 2 of 14
      Hitachi places fuel injectors into Autoform’s fuel rail assemblies, and the

      finished products are installed into automobiles.


[3]   Pursuant to direction from Hitachi, Autoform agreed in 2013 to use Whitesell

      as its sole source of injector cups. Autoform utilizes a “just-in-time” inventory

      system whereby parts are not stockpiled. The quantity of parts ordered at one

      time may vary. In October of 2013, Whitesell provided Autoform a per-unit

      quoted price of $2.470 for each injector cup, based upon a five-year quantity

      estimate. In January of 2014, Autoform requested a price quote for lower-

      volume shipments and Whitesell provided a quote of $2.958 for each injector

      cup.


[4]   On November 17, 2014, Autoform issued its first purchase order to Whitesell.

      The purchase order listed the per unit price of $2.470. Whitesell filled the

      purchase order. Autoform then issued subsequent purchase orders, each listing

      the $2.470 price.


[5]   On July 29, 2016, Whitesell issued an invoice to Autoform reflecting the $2.958

      price. Whitesell also sought an alleged “payment shortfall” of $343,154.15.

      Autoform did not pay the amount demanded and, on September 21, 2016,

      Whitesell informed Autoform that shipments of the injector cups would cease

      on October 1, 2016. That date was extended as the parties attempted to reach

      an agreement. However, on December 22, 2016, Whitesell ceased its

      shipments of injector cups to Autoform.




      Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018       Page 3 of 14
[6]   On December 27, 2016, Autoform filed a motion seeking a temporary

      restraining order against Whitesell, and the trial court conducted a hearing on

      January 4, 2017. At that hearing, Autoform advised the trial court that

      Autoform’s supply of injector cups would likely be exhausted by the next day.

      The next day, the trial court issued a temporary restraining order decreeing that

      Whitesell was to be restrained from:


              Refusing to supply the injector cups to Autoform pursuant to the
              terms of Autoform Purchase Orders:


              Taking any other action inconsistent with its obligations under
              the terms of the Autoform Purchase Orders;


              Refusing to allow Autoform to order injector cups pursuant to
              the same protocol and terms that it had, including the $2.470 per-
              unit price for injector cups;


              Charging per-unit price of injector cups sold to Autoform in
              fulfillment of Autoform’s Purchase Orders above $2.470; and


              Applying and [sic] Terms and Conditions in addition to those
              ordered by this Court.


      (App. Vol. II, pg. 7).3




      3
       Autoform was ordered to post a bond of $50,000.00 plus additional amounts reflecting the price difference
      of $0.298 per injector cup ordered.

      Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018                             Page 4 of 14
[7]   After some continuances and discovery disputes, the trial court set the matter

      for a preliminary injunction hearing. However, the parties reached an

      agreement and submitted their stipulations to the trial court.4 On September 27,

      2017, the trial court entered an Agreed Order vacating the court date and

      converting the temporary restraining order to a preliminary injunction.5 In

      relevant part, the Agreed Order provided:


               The Court’s January 5, 2017, Temporary Restraining Order shall
               remain in effect until the Court enters judgment after the bench
               trial, except that Autoform is not required to post bond payments
               for its actual requirements of injector cups ordered from
               Whitesell through the time the Court enters judgment. By
               agreeing to continue the preliminary injunction hearing, no party
               waives any rights that it may have including the right to argue
               that the contract between the parties has already expired or will
               expire between the date of this order and the trial of this matter.


      (App. Vol. II, pg. 166.)


[8]   Thereafter, a dispute arose concerning the quality of the injector cups supplied

      by Whitesell to Autoform. On October 5, 2017, the trial court issued a pre-trial

      order providing that Autoform could debit Whitesell’s account for each




      4
        Black’s Law Dictionary defines “stipulation” as including “a voluntary agreement between opposing parties
      concerning some relevant point,” for example, “the plaintiff and defendant entered into a stipulation on the
      issue of liability.” (10th ed. 2014 Pg. 1641).
      5
       A temporary restraining order preserves “the status quo until a litigant’s application for a preliminary or
      permanent injunction can be heard.” Blacks’s Law Dictionary (10th Ed. 2014 Pg. 1693).

      Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018                                 Page 5 of 14
       defective injector cup delivered. Whitesell unsuccessfully sought to have the

       language of the order modified or to have the order vacated.


[9]    On February 12, 2018, Whitesell filed a motion to dissolve the preliminary

       injunction. On March 5, 2018, the trial court conducted a hearing on several

       pending matters, including the motion to dissolve the preliminary injunction.

       No evidence was presented but argument of counsel was heard. On April 16,

       2018, the trial court denied Whitesell’s motion. Whitesell appeals.



                                   Discussion and Decision
                                          Standard of Review
[10]   We review a trial court’s decision to dissolve or refuse to dissolve a preliminary

       injunction for an abuse of discretion. Hannum Wagle & Cline Eng’g, Inc. v.

       American Consulting, Inc., 64 N.E.3d 863, 882 (Ind. Ct. App. 2016). A trial court

       abuses its discretion when its decision is clearly against the logic and effect of

       the facts and circumstances or if the trial court misinterprets the law. Aberdeen

       Apts. v. Cary Campbell Realty Alliance, Inc., 820 N.E.2d 158, 163 (Ind. Ct. App.

       2005), trans. denied. To the extent that the trial court engaged in fact-finding

       with respect to the proper length of the injunction, we accord deference to facts

       found. Hannum Wagle, 4 N.E.3d at 882. To the extent that the decision was

       based upon contract interpretation, we apply a de novo standard of review. Id.


[11]   Here, the preliminary injunction was entered due to the parties’ stipulation.

       Generally, a stipulation may not be withdrawn without the consent of both

       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018         Page 6 of 14
       parties or for cause. In the Matter of Ce.B., 74 N.E.3d 247, 250 (Ind. Ct. App.

       2017). Typical grounds would include fraud, mistake, or undue influence and

       do not include disadvantage to a party from the stipulation. Id.


                                                     Analysis
[12]   At the hearing on Whitesell’s motion to dissolve the injunction, Whitesell

       asserted “no evidentiary hearing is required at all,” Tr. at 116, but argued (1)

       any emergency had passed because Autoform had adequate time to find an

       alternate supplier6 and (2) continuation of the injunction was inequitable

       because an imbalance of power had been created by the trial court’s subsequent

       order that Autoform could debit the balance owed Whitesell for parts Autoform

       considered defective. In denying Whitesell’s motion, the trial court stated in

       relevant part:


               First, Autoform’s [prior] testimony that it would take at least
               twelve months to find an alternative supplier supports the
               argument that Autoform would suffer irreparable harm if
               Whitesell was allowed to stop shipping parts. The same risk of
               harm exists today as it existed in January 2017. If Whitesell
               could refuse to ship injector cups, Autoform cannot build its fuel
               rail assemblies because there is no readily accessible alternative
               source of the specific injector cups needed. Autoform would
               have to close its fuel rail assembly line and lay off workers. . . .
               To the extent the January 5 TRO restricts remedies which would




       6
        Whitesell referenced factual finding 26 of the trial court’s January 5, 2017 order, which stated: “Autoform
       presented testimony that it would anticipate needing roughly twelve months to find a new source for injector
       cups. While searching for a new supplier, Autoform could not carry on producing its product for Hitachi.”
       (App. Vol. II, pg. 98.)

       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018                              Page 7 of 14
               normally be available to Whitesell by statute, such temporary
               equitable measures are necessary to allow the parties to conduct
               business as the Court addresses the merits of this case, which is a
               position Whitesell approved when it entered into a joint
               agreement with Autoform to allow the January 5 Order to be
               entered as a preliminary injunction on September 27, 2017. . . .


               It is because Whitesell has [an] avenue to recover its damages
               that the Court finds keeping the January 5 TRO in place to be
               proper.


       Appealed Order at 7-9.


[13]   Whitesell argues that the injunction is now “more extensive in scope than is

       reasonably necessary to protect the interests of aggrieved parties,” Appellant’s

       Brief at 17 (quoting Felsher v. Univ. of Evansville, 755 N.E.2d 589, 600 (Ind.

       2001)). According to Whitesell, it was incumbent upon the trial court to require

       Autoform to provide evidence of its current ability to re-source but the trial

       court declined to do so and simply relied upon facts that existed in the past.

       Whitesell largely ignores the fact that it agreed to the continuation of the

       injunction until the resolution of the underlying litigation.


[14]   Autoform contends that Whitesell stipulated to the entry of the preliminary

       injunction, thus forfeiting its right to appeal the injunction, and that its motion

       for dissolution is an attempt to collaterally attack the agreed order. Autoform

       directs our attention to Kindred v. Townsend, 4 N.E.3d 793 (Ind. Ct. App. 2014),

       in which a panel of this Court dismissed an interlocutory appeal upon

       determining that the appellant had forfeited a right to appeal a preliminary


       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018         Page 8 of 14
       injunction and then attempted to revive the forfeited right by filing a motion to

       dissolve the injunction based on matters known when the preliminary

       injunction was issued.


[15]   In Kindred, the trial court had granted a preliminary injunction to prevent

       damage to disputed property and neither party appealed. Id. at 794. Six

       months later, the Kindreds moved to dissolve the preliminary injunction,

       claiming that the other party lacked standing. Id. at 795. The trial court denied

       the motion to dissolve and the Kindreds appealed. Id. This court

       acknowledged that, at first glance, it appeared that the Kindreds were properly

       appealing the denial by bringing an appeal as of right pursuant to Appellate

       Rule 14(A)(5). Id. However, the Court also considered the appellee’s

       contention that the motion to dissolve was “not based on any new facts or

       circumstances that had arisen since the trial court’s entry of the preliminary

       order.” Id.


[16]   We found that the Kindreds had pursued a belated, collateral attack on the trial

       court’s initial decision to enter an injunction, explaining:


               Appellate Rule 14(A)(5) provides for an interlocutory appeal as
               of right from orders denying a motion to dissolve a preliminary
               injunction. However, if read broadly, this would permit a party
               subject to a preliminary injunction to repeatedly bring motions to
               dissolve a preliminary injunction and repeatedly appeal such
               denials. Indeed, if we were to read Appellate Rule 14(A)(5) this
               broadly, a party who forfeited the right to appeal from the entry
               of the preliminary injunction could repeatedly resurrect their
               right to appeal by simply filing a motion to dissolve the
               injunction. Likewise, a party who forfeited the right to appeal a
       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018       Page 9 of 14
               denial of a motion to dissolve a preliminary injunction could
               resurrect their appeal by filing a repetitive motion to dissolve the
               injunction. This would render the time limitations of Appellate
               Rule 14(A) meaningless.


               We therefore read Appellate Rule 14(A)(5) to mean that a party
               who wishes to challenge the entry of a preliminary injunction
               order (or the denial of a request for a preliminary injunction)
               must initiate their appeal within thirty days of the trial court’s
               order granting or denying the request for a preliminary
               injunction. If a party fails to do so, it may not thereafter seek to
               dissolve the preliminary injunction based upon grounds that were
               known or knowable at the time of the entry of the preliminary
               injunction, as this would simply be a belated, collateral attack on
               the trial court’s initial decision to enter or deny the injunction.
               To hold otherwise would allow limitless appeals based on the
               same facts tried and decided to enter or deny a preliminary
               injunction. On the other hand, if a party moves to dissolve a
               preliminary injunction based upon a change in circumstances
               since the entry of the injunction, and the trial court grants or
               denies this motion, then the party has the right to appeal the trial
               court’s order dissolving or refusing to dissolve the injunction.


       Id. at 796.


[17]   Whitesell’s claim that it is entitled to dissolution of the preliminary injunction

       based upon the passage of sufficient time for re-sourcing is such a collateral

       attack. When Whitesell stipulated with Autoform that the temporary

       restraining order should be converted to a preliminary injunction, the parties

       agreed to its duration, that is, until the litigation was resolved by trial. The

       agreed order did not impose a time limit for Autoform to find a new supplier;



       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018         Page 10 of 14
       indeed, Autoform was not obligated to re-source its needs.7 Whitesell cannot

       now be heard to complain that the trial court abused its discretion with respect

       to the proper length of the injunction.


[18]   However, when the preliminary injunction was issued, Whitesell did not know

       that Autoform would obtain an order specifically permitting debits to

       Whitesell’s account for parts Autoform considered defective while Whitesell

       was restrained from ceasing shipments. We cannot say that Whitesell forfeited

       any right to argue before the trial court that this so changed the respective

       obligations that the continuation of the injunction was inequitable. In

       advancing its position, Whitesell did not present testimony or evidentiary

       exhibits. On appeal, Whitesell alternately claims that new evidence was

       unnecessary or that Autoform should have produced evidence. 8 Nonetheless, it

       is apparent from the record of pre-trial orders that there had been a change in

       circumstances relative to the parties’ business transactions. Whitesell asked the

       trial court to consider the necessity for continuing the injunction given that, in




       7
         The efforts made by Autoform to re-source, if any, are not of record. However, Autoform has requested, in
       a related motion, to be permitted to stop using Whitesell as its supplier of injector cups.
       8
         Whitesell asserts that it had an initial burden to show a change in circumstances but then Autoform needed
       to produce evidence to justify continuation of the injunction. In making this argument as to burden of proof,
       Whitesell does not acknowledge that it also stipulated that the temporary restraining order should be
       converted to a preliminary injunction. The burden of producing evidence was upon Whitesell, which sought
       to dissolve an agreed order. In re Ce.B., 74 N.E.3d at 247.
       Whitesell also claims, in the Reply Brief, that the “only question” remaining before this Court is whether the
       “key findings” of the appealed order lacked evidentiary support. Reply Brief at 20. But Whitesell fails to
       explain how, if findings were set aside as clearly erroneous because they lacked evidentiary support, this
       entitles Whitesell to dissolution of the injunction.

       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018                               Page 11 of 14
       Whitesell’s view, there was “an imbalance of power” 9 and the “emergency was

       long over.” (Tr. at 105, 108.)


[19]   The trial court’s order reflects its consideration of the threatened harm to each

       party under the changed circumstances, including allowing Autoform to debit

       Whitesell’s account. The trial court stated in relevant part:


                Whitesell alleges that Autoform is deducting for parts that it
                considers defective but have not been shown to be defective
                pursuant to the standards of the agreement between them. This
                leaves Whitesell being forced to accept an even lower amount of
                money for shipments of parts due to Autoform’s unilateral
                rejection of potentially good parts.


                Whitesell and Autoform disagree over the extent to whose Terms
                & Conditions should serve as the standard to determine whether
                a part is defective. The issues over part quality are currently
                pending on summary judgment. Until the Court can make
                determinations regarding whose standards apply to part quality,
                the Court must balance the harms of allowing Autoform to debit
                for parts it subjectively believes are defective verses repealing the
                January 5 TRO.


                If the Court allows the current arrangement to continue, there is
                a risk that Whitesell will be erroneously denied revenue if
                Autoform is applying an overly-stringent standard. Whitesell has
                stated that it has suffered hundreds of thousands of dollars in
                damages just to this point. On the other hand, if Autoform is not



       9
        Autoform retained a right, under the UCC, to reject defective parts, although it might ultimately have to
       pay damages. See Ind. Code § 26-1-2-601. Whitesell argued that it was barred by the injunction from
       exercising its right to suspend performance or cancel the contract due to Autoform’s wrongful rejection of
       parts and failure to make payment. See I.C. § 26-1-2-703.

       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018                              Page 12 of 14
               comfortable using Whitesell parts that Autoform believes do not
               conform with required specifications, Autoform could have a fuel
               rail shortage and be unable to fill its orders for Hitachi. Failure
               to satisfy orders would have an impact on its subsequent dealings
               with Hitachi, and Autoform could lose that business.


               Again, the designations presented show that the balance of harms
               weighs in favor of Autoform because of the irreparable harm that
               could befall Autoform if it does not receive enough conforming
               parts. The Court understands that Whitesell may feel aggrieved
               by this stance as Autoform’s determination of part quality
               governs for the purposes of determining the quantity of parts
               required under the TRO; however, Whitesell has the opportunity
               to seek any damages it may be incurring during this period
               should the Court determine that Autoform’s assessment is
               incorrect on summary judgment.


       Appealed Order at 8-9.


[20]   In short, the trial court found that Whitesell could be adequately compensated

       by money damages if Autoform had acted wrongfully but, in the event

       Whitesell had acted wrongfully, Autoform was at risk of suffering irreparable

       harm – that which could not be adequately addressed by money damages. The

       trial court’s decision is not clearly contrary to the facts and circumstances before

       it.



                                                 Conclusion
[21]   Whitesell has demonstrated no abuse of discretion in the trial court’s denial of

       the motion to dissolve the preliminary injunction.


       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018       Page 13 of 14
[22]   Affirmed.


       Mathias, J., and Bradford, J., concur.




       Court of Appeals of Indiana | Opinion 18A-PL-848 | August 31, 2018   Page 14 of 14
