Ritchie Bros. Auctioneers (America), Inc. v. Best Rental Corporation SE et al

Filing 53

OPINION AND ORDER directing that it is the ORDER, JUDGMENT, and DECREE of the court that the motions for preliminary injunction (Doc. Nos. #3 and #37 ) filed by plaintiff Ritchie Bros. Auctioneers (America), Inc., are denied. Signed by Honorable Judge Myron H. Thompson on 3/6/14. (Attachments: #1 Civil Appeals Checklist)(scn, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, EASTERN DIVISION

RITCHIE BROS. AUCTIONEERS
(AMERICA), INC.,

)
)
)
Plaintiff,
)
)
v.
)
)
BEST RENTAL CORPORATION SE, )
et al.,
)
)
Defendants.
)

CIVIL ACTION NO.
3:14cv36-MHT
(WO)

OPINION AND ORDER
Plaintiff Ritchie Bros. Auctioneers (America), Inc.,
brought

this

lawsuit

against

defendants

Best

Rental

Corporation SE and Gavin Nawrocki (the vice-president of
Best

Rental),

asserting

breach

of

contract

and

the

related torts of fraudulent misrepresentation and breach
of duty of good faith and fair dealing.

Ritchie Bros.

has also sued defendant Alex Lyon & Sons, Inc., asserting
intentional interference with a contractual relationship.
Jurisdiction is proper pursuant to 28 U.S.C. § 1332
(diversity).

This matter is now before the court on

Ritchie Bros.’ motions for a preliminary injunction.
Based on the evidence presented at an evidentiary hearing
on March 5, 2014, the motions will be denied.
Ritchie Bros. and Alex Lyon & Sons are competing
auction houses.

Best Rental is a construction equipment

rental company, and is in the process of wrapping up
operations as it goes out of business.

Ritchie Bros.

claims that Best Rental entered into a contract that
provided for Ritchie Bros. to auction off substantially
all of Best Rental’s equipment, but that due to Alex
Lyon’s interference Best Rental repudiated that contract
and instead agreed to permit Alex Lyon to sell most of
the equipment at an auction scheduled for March 14, 2014.
Best

Rental

had

entered

into

numerous

auction contracts with Ritchie Bros.

previous

Many of those

contracts involved the main contract document, containing
the terms, and an attachment containing the list of items
to

be

auctioned

(referred

labeled as “Schedule A”).

to

and

often

prominently

The parties also agree that

2

Best Rental and Ritchie Bros. signed the main portion of
the purported contract at issue here on January 3, 2014.
On January 7, 2014, Nawrocki supplied Ritchie Bros.
with a list of equipment.

Ritchie Bros. claims that the

parties agreed the list would constitute Schedule A.

The

defendants counter that Best Rental never agreed that the
list was Schedule A.

All parties offered evidence in

support of their versions of events, mostly in the form
of testimony from the individuals involved.
It is within the sound discretion of the trial court
whether to issue a preliminary injunction. International
Cosmetics Exchange, Inc. v. Gapardis Health & Beauty,
Inc., 303 F.3d 1242, 1246 (11th Cir. 2002).

A party

seeking a preliminary injunction must satisfy a four-part
test showing: (1) that it has a substantial likelihood of
success on the merits; (2) that it would be irreparably
harmed if an injunction were not granted; (3) that such
harm outweighs the harm that would accrue to the opposing
party if the injunction were granted; and (4) that the

3

injunction would not be adverse to the public interest.
Odebrecht

Const.,

Inc.

v.

Sec’y,

Florida

Dep’t

Transp., 715 F.3d 1268, 1273 (11th Cir. 2013).

of
The

movant bears the burden of persuasion as to all four
requirements.

Forsyth

Cnty.

v.

U.S.

Army

Corps

of

Engineers, 633 F.3d 1032, 1039 (11th Cir. 2011).
The court finds that Ritchie Bros. has failed to
carry its burden of establishing a substantial likelihood
of success on the merits.

While the parties have raised

a number of issues in this case, it is clear the core
dispute is whether Ritchie Bros. and Best Rental ever
agreed on a Schedule A.

If they did, then Ritchie Bros.

has a strong likelihood of success on the merits, at
least against Best Rental and Nawrocki.

If they did not,

then it is quite likely that there was no breach at all,
if indeed there was even a completed contract.
produced

substantial

but

not

conclusive

Each side

evidence

in

support of its version of events.
“In many cases the existence of a factual conflict

4

... may create sufficient doubt about the probability of
plaintiff’s success to justify denying a preliminary
injunction.”

11A Charles A. Wright, Arthur R. Miller &

Mary K. Kane, Federal Practice and Procedure § 2948.3 (2d
ed.).

That is the case here.

A reasonable jury could

credit the defendants’ version of events at least as
easily as it could believe Ritchie Bros.’ version.

Thus

Ritchie Bros. has failed to establish that it has a
substantial likelihood of success on the merits.
The court further concludes that Ritchie Bros. has
not carried its burden as to irreparable harm.

First,

Ritchie Bros. points to the possibility of Best Rental
transferring its assets and becoming judgment proof, but
Alex Lyon has agreed to indemnify all defendants in this
case, ensuring that if Ritchie Bros. ultimately prevails
it will be able to obtain damages.
Second, Ritchie Bros. alleges loss of customers and
reputation,

but

generalizations

at
and

the

hearing

it

speculation

in

5

could

offer

support

of

only
that

conclusion.

Cf. BellSouth Telecommunications, Inc. v.

MCIMetro Access Transmission Servs., LLC, 425 F.3d 964,
970 (11th Cir. 2005) (upholding and relying on district
court’s specific factual finding that plaintiff would
lose 3200 customers per week absent an injunction).
Third,

Ritchie

Bros.

argues

that

without

an

injunction it will lose the benefit of a provision of the
purported contract guaranteeing specific performance with
regard to items withdrawn within 40 days of a planned
auction.

However, the planned auction that arguably

triggered the specific-performance clause in this case
took place in February.

Because the auction within 40

days has already come and gone, Ritchie Bros. can no
longer obtain the specific performance contemplated in
the contract: namely the production of the disputed items
at the February auction.

As such, the denial of a

preliminary injunction now, in March, does not constitute
any

additional

authority

from

harm.
various

Furthermore,
jurisdictions

6

the

weight

indicates

of
that

“while contractual specific performance clauses may guide
a trial court’s equitable determinations, they are not
binding” on the court.

Reeder v. Carter, 740 S.E.2d 913,

919 (N.C. Ct. App. 2013) (collecting cases).

Given the

circumstance that Ritchie Bros. can no longer obtain the
specific performance contemplated in the contract, this
court would be unlikely to order specific performance in
the exercise of discretion in this case, even if Ritchie
Bros. ultimately prevails.

Finally, it is important to

note that the irreparable harm Ritchie Bros. contends it
will suffer is the loss of the benefit of a "remedy."
And

the

remedy

here

is

not

unconditional,

but

is

available, according to the purported contract, only on
a showing of a contractual "breach."

Therefore, the mere

allegation that Ritchie Bros. will suffer the loss of the
benefit of this remedy does not, in and of itself, mean
that irreparable harm will follow.

In this sense, the

type of irreparable harm Ritchie Bros. contends it will
suffer is deeply dependant on its contention it will

7

prevail on the merits.

In contrast, for example, Ritchie

Bros. does not seek merely to maintain the status quo.
Thus, the court’s conclusion that Ritchie Bros.’ ultimate
success on the merits is very much in doubt further
undercuts

its

argument

that

the

specific-performance

clause establishes irreparable harm.
For the reasons discussed above, the court also finds
that Ritchie Bros. has also failed to establish the
remaining two factors, namely the balance of hardships
and the public interest.

The court need not reach the

defendants’ argument regarding judicial estoppel.

***
Accordingly, it is the ORDER, JUDGMENT, and DECREE of
the court that the motions for preliminary injunction
(Doc. Nos. 3 and 37) filed by plaintiff Ritchie Bros.
Auctioneers (America), Inc., are denied.
DONE, this the 6th day of March, 2014.

/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE