United States District Court, D. Utah
ZIBALSTAR, L.C., a Utah Limited Liability Company, et al., Plaintiffs,
ROBERT CONTE, an individual, et al., Defendants.
MEMORANDUM DECISION AND ORDER DENYING PLAINTIFFS'
EX PARTE MOTION FOR INJUNCTIVE RELIEF
N. Parrish United States District Court Judge
the court is Plaintiffs' Ex Parte Motion for
Temporary Restraining Order and Preliminary Injunction
pursuant to Fed.R.Civ.P. 65. (Docket No. 3). Plaintiffs also
request an emergency hearing regarding the Motion. As
explained below, the court DENIES the Motion without hearing.
to the instant Motion, Plaintiffs are owners and lessees of
numerous commercial properties who hired Defendants and their
agents (collectively, “Defendants” or
“Conte-Hansen”) to manage these properties on
their behalf. Plaintiffs allege that Defendants and their
agents have “seriously mismanaged” the
properties. (Docket No. 3, at 10). This mismanagement,
coupled with suspected fraud by certain Defendants and
related contractual and property disputes, ostensibly led
Plaintiffs to terminate Defendants as managers of their
properties. Plaintiffs thereafter issued several
cease-and-desist letters to some of the Defendants or their
agents, “instructing them not to trespass on the
premises of the Properties.” (Id.). Defendants
and their agents apparently ignored the termination of their
contract and the cease- and-desist letters by continuing to
conduct their management responsibilities on the properties
at issue and allegedly entering and damaging certain of the
properties. A named Plaintiff, Gary Brinton, visited several
properties to demand that Defendants' employees leave the
property, but, by and large, the employees refused to leave
absent a court order.
instant Motion, Plaintiffs allege that, since the
termination, Defendants or their agents have continued to
sell inventory purchased using funds belonging to Plaintiffs
and have pocketed the proceeds at one property. They also
allege that Defendants' agents have attempted to remove
certain equipment from a storage shed on Plaintiffs'
property. Plaintiff also suggests, though does not outright
allege, that Defendants' agents eventually broke into the
shed and stole the equipment. Additionally, Plaintiffs allege
that “someone” attempted to break into a storage
area at the same property, actually broke into the storage
area the next day, “spread paint around on the walls
and floors, and damaged or destroyed many of the pipes on the
back of the laundry machines.” (Id. at 13).
Plaintiffs further allege that Defendants' agents
recently stole “computer monitors, equipment, papers,
and files” from one of Plaintiffs' properties.
12, 2017, Plaintiffs filed an extensive and complex
complaint, alleging multiple causes of action under federal
and state law against Defendants. (Docket No. 2).
Specifically, the complaint alleges that Defendants or their
agents have violated the Racketeer Influence and Corrupt
Organizations Act of 1978 (“RICO”), 18 U.S.C.
§§ 1961, et seq., committed fraud related
to real estate transactions between the parties, negligently
misrepresented the status of a future real estate transaction
between the parties, committed fraud related to their
property management responsibilities, breached their property
management contract, breached certain implied covenants, and
failed to fulfill a promise regarding a future real estate
transaction upon which Plaintiffs relied. (Docket No. 2, at
35-49). On the same day, Plaintiffs filed the instant Motion,
requesting an ex parte temporary restraining order
(“TRO”) and preliminary injunction, prohibiting
Plaintiffs from trespassing on the properties at issue.
(Docket No. 3). In their Motion, Plaintiffs also request an
emergency ex parte hearing. The court now considers
the Motion under authority derived from 28 U.S.C.
§§ 1331, 1367.
explained above, Plaintiffs ask this court to issue an ex
parte TRO and preliminary injunction against Defendants
and their agents, prohibiting them from trespassing on
certain properties owned or leased by Plaintiffs. The court
notes at the outset that any form of preliminary injunctive
relief is “an extraordinary and drastic remedy, one
that should not be granted unless the movant, by a clear
showing, carries the burden of persuasion.” Mazurek
v. Armstrong, 520 U.S. 968, 972 (1997) (quotations and
emphasis omitted) (quoting 11A C. Wright et al., Federal
Practice & Procedure § 2948 (2d ed. 1995));
Schrier v. Univ. of Colo., 427 F.3d 1253, 1258 (10th
Cir. 2005) (“As a preliminary injunction is an
extraordinary remedy, the right to relief must be clear and
unequivocal.” (quotations omitted) (quoting SCFC
ILC, Inc. v. Visa USA, Inc., 936 F.2d 1096, 1098 (10th
Cir. 1991)). The court will first address the exacting
standard by which Plaintiffs' requests must be judged,
then Plaintiffs' request for a preliminary injunction,
then their request for a TRO, and finally their request for
an emergency ex parte hearing.
STANDARD FOR DISFAVORED INJUNCTIVE RELIEF
initial matter, the court concludes that the relief requested
in the instant Motion would disrupt the status quo and is
therefore subject to closer scrutiny than other requests for
injunctive relief. See O Centro Espirita Beneficiente
Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 975-76 (10th
Cir. 2004) (per curiam); Schrier, 427 F.3d at 1259.
The Tenth Circuit has consistently held that injunctive
relief that disrupts the status quo is disfavored and must be
“more closely scrutinized” to ensure that relief
is warranted. Beltronics USA, Inc. v. Midwest Inventory
Distribution, LLC, 562 F.3d 1067, 1070 (10th Cir. 2009)
(quoting Schrier, 427 F.3d at 1259). “An
injunction disrupts the status quo when it changes the
‘last peaceable uncontested status existing between the
parties before the dispute developed.'”
Id. at 1070-71 (quoting Schrier, 427 F.3d
at 1260). Here, the “last peaceable uncontested status
existing between the parties” was apparently prior to
the termination when Plaintiffs and Defendants had an ongoing
contractual relationship regarding property management, as is
plainly evidenced by Defendants' refusal to vacate the
properties or cease operations upon request. An injunction or
order forbidding Defendants or their agents to reenter or
otherwise conduct business in accordance with this prior
arrangement clearly disrupts the status quo existing prior to
the instant dispute. Accordingly, the relief requested by
Plaintiffs is disfavored and “must be more closely
scrutinized to assure that the exigencies of the case support
the granting of a remedy that is extraordinary even in the
normal course.” See O Centro Espirita, 389
F.3d at 975.
this more exacting standard in mind, the court now turns to
evaluation of the requested preliminary injunction and the
REQUEST FOR EX PARTE PRELIMINARY INJUNCTION
Plaintiffs appear to request an ex parte preliminary
injunction. As Rule 65 flatly prohibits the issuance of an
injunction without notice to the adverse party, see
Fed. R. Civ. P. 65(a)(1), the court denies this request
REQUEST FOR EX PARTE ...