United States District Court, D. Utah, Central Division
DARRELL L. DEEM, et. al., Plaintiffs,
TRACEY BARON, et. al., Defendants.
MEMORANDUM DECISION AND ORDER
SAM UNITED STATES DISTRICT JUDGE
the court is Plaintiffs' Renewed Motion for Preliminary
Injunction. Plaintiffs seek an order reflecting the following
• The court's approval is required for the sale or
transfer of assets.
• Defendants are enjoined from committing waste or
otherwise substantially altering said real estate in any way
which would negatively impact its value without either the
agreement of counsel or leave of the court.
• Defendants may not interfere with enforcement of the
assignment of rents in the possession of Plaintiffs with
reference to the real estate.
• Plaintiffs may have access to files, documents,
surveys and work performed by 3J Consulting relative to the
18901 Venture (Hill Top Project), and may use existing
documentation to preserve the value of said asset.
Supreme Court has held that “[a] plaintiff seeking a
preliminary injunction must establish that he is likely to
succeed on the merits, that he is likely to suffer
irreparable harm in the absence of preliminary relief, that
the balance of equities tips in his favor, and that an
injunction is in the public interest.” Winter v.
Natural Resources Defense Council, Inc., 555 U.S. 7, 20
(2008). As described below, these four requirements are met
in this case.
are likely to succeed on the merits. They have provided
extensive documentation and analysis demonstrating that they
have not been paid as agreed. Because the evidence indicates
that payments have not been made, Plaintiff's have a good
likelihood of success.
is a strong likelihood that Plaintiffs will suffer
irreparable harm if Defendants sell or lose their assets
pending trial. Plaintiffs loaned money to the Defendants so
that Defendants could acquire distressed properties and make
those properties rentable and profitable. Since these are
distressed properties to begin with, Plaintiffs are concerned
that they may be lost to the banks unless Plaintiffs are kept
in the loop on their status with the banks. Plaintiffs state
the following: “We are not asking that Tracey make any
payments. We are asking that we be given the opportunity to
negotiate with the bank and make payments ourselves if we
determine it is prudent to do so. Tracey is still fee [sic]
to make payment on his own.” ECF No. 94 at 12.
Plaintiffs note that since Defendants have admitted that they
don't care whether the assets are preserved, they cannot
be harmed by an order allowing Plaintiffs to attempt to
Baron has made threats in the past to waste or destroy the
assets. Defendant argues that those threats were made years
ago in response to justifiable frustration and anger over
being cheated by Plaintiffs, but that his actions since then
prove that he presents no danger to Plaintiffs. If Mr. Baron
has no plans to waste or destroy assets, then he should not
object to an order preventing him from doing so.
contracts in question provide that a portion of all rents
shall be paid to Plaintiffs. Plaintiffs have not received
most of these rents. They have provided the affidavit of one
tenant who states that he is aware of over $45, 000.00 in
rents being paid under the table on the property he is
renting. He states that Mr. Baron insisted that all payments
be made in cash without any receipts and that there be no
written agreement. See Exhibit 11C, Affidavit of
Ronald Stendahl, attached to the Affidavit of David Law (ECF
No. 94, Exhibit 1AAA). Plaintiffs sent a letter to each
property for which they have an assignment of rents,
informing the occupant of the assignment, but they soon
learned that Mr. Baron was threatening the tenants with
eviction if they honored Plaintiffs' assignments.
See Exhibit 2E to the Affidavit of David Law
(Exhibit 1AAA). Plaintiffs note that this is not just a
question of monetary damages. “It is a question of
preserving the contractual basis for those damages. If the
rents are not brought in, there are no damages for not paying
Plaintiffs their portion of such rents. The claim for damages
can only exist if the tenants remain in the
properties.” ECF No. 94 at 13.
most valuable project that the parties undertook was the
development of what they refer to as the 18901 Venture”
which refers to 18901 Hill Top Road. This was a joint venture
by the parties and not simply a loan. See Exhibit
3A, Joint Venture Agreement with Notes and Exhibit 8B
Violations of 18901 Venture, both Exhibits to the Affidavit
of David Law (Exhibit 1AAA). The Joint Venture Agreement
contemplated that the Hill Top Road property would be
subdivided and sold, and Mr. Baron employed the engineering
firm of 3J Consulting to draw plans, obtain permits and
perform other engineering projects. The contract with 3J
Consulting is in the sole name of Tracey Baron personally. He
refuses to allow Plaintiffs access to the work performed by
3J Consulting, and 3J Consulting refuses to proceed without
his authorization. While Plaintiffs acknowledge that the loss
here is monetary, and that they could hire a different
engineer and do all of the work themselves, they also assert
that trying to go back and repeat the engineering work is
likely to destroy the financial viability of the whole
generally one pursuing a money action is not entitled to a
preliminary injunction, an exception is when movant's
cause of action is directed to a specific fund which is
“the subject of the action.” See Ma v.
Lien, 198 A.D.2d 186, 604 N.Y.S.2d 84 (1993). Many cases
hold that a monetary damages claim directed at a specific
fund is viable as an irreparable injury worthy of an
injunction because the property, not the value of the
property, is the true subject of the action. See ECF
No. 94 at 15-16 for specific examples. This is the case here.
There would clearly be irreparable damage if the preliminary
junction is not granted.
opposition to the Motion for Preliminary Injunction fails to
address the merits of the motion. Defendants base their
opposition on two arguments: (1) that this motion conflicts
with pending bankruptcies, ...