Injunctive Relief to Prevent Monetary Damages in Estate Litigation
In general, a party is only entitled to injunctive relief if they can demonstrate that the damages for which they seek redress are not compensable by an award of monetary damages. However, in a recent US District Court case, the US District Court decided that injunctive relief was called for to preserve monetary assets pending the resolution of a matter. Typically, it is rare to see estate litigation before a US District Court; however, the District Court correctly applied New Jersey law in finding that injunctive relief was appropriate.
In that matter, the US District Court found that the decedent had improperly taken a large sum of money from the party who had brought the litigation. The plaintiff subsequently discovered that the decedent’s estate was going to sell a parcel of property. Plaintiff sought an injunction requiring that the proceeds from the sale be held in escrow; otherwise, it may suffer irreparable harm. The District Court concluded that injunctive relief was necessary to preserve the status quo and prevent the dissipation of these assets prior to a ruling on the merits. In granting the injunctive relief, the District Court concluded that the plaintiff had established a likelihood of prevailing on the merits. Further, it would suffer irreparable harm should the assets be distributed before the conclusion of the lawsuit.
This decision demonstrates that, at times, the courts will impose injunctive relief to protect monetary assets, irrespective of the standard that injunctive relief only applies to claims that are not compensable by monetary damages. Fortunately, the courts have realized that should all assets be distributed prior to the conclusion of a lawsuit, it could be highly unfavorable to the plaintiff and, therefore, often seek to preserve the status quo should a legitimate claim exist.