Apache Produce, a produce distributor, entered into a ten-year distribution agreement with a grower, which Apache Produce claimed was extended by a further five years. The grower disputed the extension in pending, foreign litigation. Another distributor, Malena, then entered into a distribution agreement with the grower. Apache Produce sued Malena for interference with contract and sought an injunction and temporary restraining order. Malena moved to stay the case, and the superior court granted the stay, justifying the grant on the conservation of judicial resources and avoidance of piecemeal litigation.
Apache Produce appealed, and the Court of Appeals accepted jurisdiction, treating the stay as an order refusing to grant an injunction under A.R.S. § 12-2101(A)5)(b), and reversed. The Court of Appeals concluded that it had appropriate appellate jurisdiction because the grant of the stay effectively refused the request for a preliminary injunction. The Court of Appeals noted that the standards for granting a stay and a preliminary injunction differ, and the superior court’s proper application of both standards is subject to appellate review when a stay order is “intertwined” with the request for a preliminary injunction. As a result, the Court of Appeals held that the superior court abused its discretion by granting the stay without reflecting the proper considerations for a preliminary injunction request, with particular emphasis placed on ensuring the party seeking an injunction has an opportunity to prove that its likelihood of success on the merits justifies an injunction.
Judge Eppich authored the opinion; Chief Judge Vásquez and Judge Eckerstrom concurred.
Posted by: William D. Furnish