Delaware

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

Ann D. Wick v. Venkataramana Naidu Et Ux ,
1987 DE 242 (DE 03/17/1987)

COURT OF CHANCERY OF DELAWARE, NEW CASTLE

Civil Action No. 8891

1987.DE.242

March 17, 1987

ANN D. WICK

v.

VENKATARAMANA NAIDU ET UX

Jeffrey S. Welch, Esquire, Morris, Nicholas, Arsht & Tunnell.

Michael Foster, Esquire, Department OF Justice.

Phebe Young, Esquire, Bayard, Handelman & Murdoch, P.a.

Before Maurice A. Hartnett, III, Vice-Chancellor

The opinion of the court was delivered by: Hartnett

ON PLAINTIFF"S APPLICATION FOR A TEMPORARY RESTRAINING ORDER: GRANTED IN PART.

Maurice A. Hartnett, III, Vice-Chancellor

The plaintiff here is also the successful plaintiff in a suit in the Superior Court which has resulted in a substantial judgment in her favor against defendant Venkataramana Naidu (C.A. 79C-JA-97). The defendants in the present suit are: Venkataramana Naidu and Saroja Naidu, his wife.

At a deposition taken last December, Venkataramana Naidu conceded that in 1985, shortly before trial was scheduled, he transferred substantial assets without consideration to persons outside the United States; on other occasions before trial he transferred assets to his wife, Saroja Naidu, who now resides outside the United States; and he has also withdrawn unexplained sums from his bank accounts in Delaware.

Plaintiff seeks a temporary restraining order:

"(1) Temporarily imposing a trust for the benefit of plaintiff on all property, both personal and real, in the title, possession, custody or control of defendants, (except * * * reasonable living expenses) * * * including * * * the monies held for Defendant Venkataramana Naidu with his pension plan with the State of Delaware and all of the property referred to and described in * * * the Complaint * * *; and

(2) Enjoining temporarily defendants and their respective agents and those acting in concert with them, from transferring, assigning, pledging, disposing or conveying to anyone any property, both personal and real, titled in or in the possession, custody or control of defendants except such monies as required to meet defendants' reasonable living expenses, such amount not to exceed $800 per month."

At the hearing, defendant Venkataramana Naidu was represented by an attorney, but defendant Saroja Naidu has not appeared and there is no indication that she has any notice of these proceedings.

Defendant Venkataramana Naidu did not contest any of the factual allegations of plaintiff but did object to the entry of a restraining order for various reasons.

I find that plaintiff is entitled to a Temporary Restraining Order, but not in the form requested.

I

Temporary restraining orders or preliminary injunctions are extraordinary remedies which are granted only in order to prevent truly irreparable injury. Wylain, Inc. v. TRE Corp., Del. Ch., 412 A.2d 338 (1979); Gimbel v. Signal Companies, Inc., Del. Ch., 316 A.2d 599 (1974), aff'd., Del. Supr., 316 A.2d 619 (1974); Turek v. Tull, Del. Ch., 139 A.2d 368 (1958); Sandler v. Schenley Indus., Inc., Del. Ch., 79 A.2d 606 (1951). They are granted only to maintain the true status quo. Smith v. Delaware Coach Co., Del. Ch., 70 A.2d 257 (1949); Thomas C. Marshall, Inc. v. Holiday Inn, Inc., Del. Ch., 174 A.2d 27 (1961). An applicant always has the burden of showing a reasonable probability of ultimate success on the merits although this burden is lesser in the case of an application for a temporary restraining order. Sandler v. Schenley Indus., Inc., supra; Gropper v. North Cent. Tex. Oil Co., Del. Ch., 114 A.2d 231 (1955); Bayard v. Martin, Del. Supr., 101 A.2d 329 (1953). Even if the probability of irreparable harm is shown, the Court must still balance the competing equities between the parties and preliminary injunctive relief must be denied when hardship outweighs benefit. Eastern Shore Natural Gas Co. v. Stauffer Chemical Co., Del. Supr., 298 A.2d 322 (1972). Thomas C. Marshall, Inc., v. Holiday Inn, Inc., supra; Hollingsworth v. Szczesiak, Del. Ch., 84 A.2d 816 (1951). A Court has broad discretion in granting or refusing to grant interim injunctive relief. Data General Corp. v. Digital Computer Controls, Inc., Del. Supr., 297 A.2d 437 (1972) and preliminary relief is to be avoided, if possible, because controversies should only be determined after all the parties have had a full opportunity to present the facts. Experience has shown that the true facts and the correct law are often difficult to ascertain without the advantage of a full hearing or discovery. This Court is also especially reluctant to grant preliminary relief if by doing so it will grant all the relief which the applicant may ultimately be entitled to after trial. Thomas C. Marshall, Inc. v. Holiday Inn, Inc., supra.

II

Plaintiff has not established the reasonable probability that she is entitled to impose a trust in this Court on any assets formerly belonging to defendant Venkataramana Naidu because, if there has been a fraudulent transfer of assets, plaintiff may attach the assets by execution process or otherwise on her judgment in the Superior Court.

Plaintiff has likewise not even cited any authority which would permit this Court to impose an $800 per month living expense limitation on defendants one of whom is not even before the Court.

Plaintiff also has not shown that this Court has any jurisdiction to attach any State pension funds which defendant Venkataramana Naidu may sometime be entitled to receive. In fact, 29 Del.C. § 5503 specifically prohibits any attachment or execution of any benefits payable pursuant to 29 Del.C., Ch. 55. Plaintiff has given no basis for her novel claim that these benefits are somehow attachable.

Because defendant Venkataramana Naidu has apparently conceded the transfer of his assets on the eve of trial without consideration, I will enter a Temporary Restraining Order preventing him from directly or indirectly transferring any assets except assets used to pay normal living expenses, until further order of the Court.

The entry of the Order will, however, be contingent upon plaintiff posting cash bond, or bond with surety in the usual form, in the sum of Three Hundred Thousand ($300,000) Dollars.

Plaintiff may submit a proposed Order.

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