American Music Co. v. Higbee
In American Music Co. v. Higbee (1998), 289 Mont. 278, 961 P.2d 109, the parties entered into a written agreement whereby the plaintiff (Kelman & AMC) agreed to sell the defendant (Higbee) a building site for a casino and to guarantee a bank loan.
In return, the defendant (Higbee) agreed to give plaintiff's family (the Kelmans) gaming company (AMC) an exclusive five-year right to place and maintain amusement and gambling machines in the new casino, with Higbee taking 60% and AMC taking 40% of the profits.
After Higbee determined that AMC did not have the machines he wanted, he purchased his own machines and stopped paying 40% of the profits to AMC. AMC filed an action in district court, and the court issued a temporary restraining order prohibiting Higbee from removing or interfering with the operation of any of AMC's machines.
After a show cause hearing, the court dissolved the TRO and denied the application for a preliminary injunction. AMC v. Higbee at 281.
AMC appealed this ruling.
In Higbee, the issue upon appeal was whether the district court abused its discretion in failing to grant a preliminary injunction restraining Higbee from purchasing his own gaming machines and from requiring Higbee to place 40% of the profits in trust pending final litigation. The parties contract strictly prohibited Higbee from purchasing his own machines.
Higbee argued that the contract required that AMC provide the "latest type" of gaming machines, and that AMC's failure to do this was a breach of the agreement. Higbee argued that the breach entitled him to suspend performance and precluded AMC from seeking equitable relief from the court by means of a preliminary injunction. Higbee cited 43A C.J.S. Injunctions, 89, pp. 111-12 for this argument, which provided:
A party is not entitled to enjoin the breach of a contract by another, unless he himself has performed what the contract required of him so far as possible, and if he himself is in default or has given cause for nonperformance by defendant he has no standing in equity...AMC v. Higbee at 284.