Wells Fargo Commercial Distribution Finance, LLC v. McNider Marine, LLC et al
Filing
9
ORDER denying without prejudice 6 Motion for TRO; denying as moot 7 Motion for Expedited Hearing. Signed by Chief Judge William H. Steele on 1/6/2017. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
WELLS FARGO COMMERCIAL
DISTRIBUTION FINANCING, LLC,
Plaintiff,
v.
MCNIDER MARINE, LLC, et al.,
Defendants.
)
)
)
)
)
) CIVIL ACTION 17-0002-WS-N
)
)
)
)
ORDER
The plaintiff has filed a motion for temporary restraining order (“TRO”)
and preliminary injunction. (Doc. 6). The plaintiff has also filed a motion for an
expedited hearing on the former motion. (Doc. 7).
The motions (and the verified complaint) assert that the plaintiff and the
entity defendant entered into a financing agreement, pursuant to which the plaintiff
has a perfected security interest in certain property, including at least some of the
entity defendant’s inventory; that the contract requires the entity defendant to
remit to the plaintiff a portion of the proceeds of each such item of inventory sold;
that the entity defendant has sold over $300,000 of inventory without remitting
proceeds to the plaintiff; that the entity defendant currently holds over $800,000 of
inventory subject to the contract; that the entity defendant is in default due to
nonpayment; and that the entity defendant has failed and refused to surrender the
remaining inventory to the plaintiff as provided in the contract. The plaintiff
asserts that the continued sales of inventory out of trust reflect a “substantial risk
of concealment, transfer, or other disposition of or damage to the Collateral to the
injury of the Plaintiff.” (Doc. 6 at 4). In addition, one of the individual defendants
has recently formed a new LLC with a name similar to that of the entity defendant,
“strongly suggesting the risk of diversion of assets and/or the depletion of value
from Borrower, which would directly affect Plaintiff’s ability to collet any money
judgment against Borrower.” (Id.).
Without a TRO and preliminary injunction, the plaintiff asserts, it “will
suffer immediate and irreparable harm in the form of the loss of its collateral
through the continued [sic] of Inventory and the loss of its contractual right to
recover possession of such collateral.” (Doc. 6 at 5). The plaintiff states it has no
adequate remedy at law because “a simple action for damages against a
deteriorating business is an inadequate remedy to stop the disposition of collateral
which Plaintiff has a clear right to possess.” (Id.).
The plaintiff first seeks a TRO. A TRO cannot be issued without notice
unless “specific facts” in an affidavit or verified complaint show that “immediate
and irreparable” harm “will [not may] result to the movant before the adverse
party can be heard in opposition” and the plaintiff’s attorney certifies in writing
“why [notice] should not be required.” Fed. R. Civ. P. 65(b)(1). The plaintiff
does not attempt to meet this demanding standard. Instead, the plaintiff states it
has satisfied the notice requirement because it has sent the complaint and the two
instant motions to the defendants by e-mail and regular mail and “is serving” these
documents by special process server. (Doc. 7 at 2). The plaintiff does not confirm
that the defendants have received any of these communications, nor does it cite
any authority for the proposition that the mere act of sending notice, without actual
receipt, takes the case outside of Rule 65(b)(1). The motion for TRO must be
denied on that ground alone.
As the plaintiff acknowledges, (Doc. 6 at 6), neither a TRO nor a
preliminary injunction can be granted without a showing that such relief is
necessary to prevent irreparable harm to the plaintiff. “An injury is ‘irreparable’
only if it cannot be undone through monetary remedies.” Cunningham v. Adams,
808 F.2d 815, 821 (11th Cir. 1987); accord Scott v. Roberts, 612 F.3d 1279, 1295
(11th Cir. 2010). The sale of collateral out of trust, and the failure to surrender
remaining collateral, may hamper the plaintiff’s ability to be made whole through
2
vindication of its security interest but, without a showing that the collateral
represents the only means by which the entity defendant can repay its debt, it is
unclear how the plaintiff can demonstrate that it cannot be made whole by an
award of monetary damages. While the plaintiff posits that the entity defendant is
“deteriorating,” the only evidence it cites in support is the entity defendant’s
failure to remit proceeds of inventory sales. (Doc. 6 at 6). The sole case on which
the plaintiff relies (an unpublished trial court decision from Oklahoma) did not rest
on such a generous extrapolation but on evidence of the borrower’s “financial
position,” which “gives no assurance that Borrowers are now able or might soon
become able to fully repay the amounts owed on their Loan” independently of the
collateral. American Bank and Trust Co. v. Bond International Ltd., 2006 WL
2385309 at *9 (N.D. Okla. 2006). Here, in contrast, the plaintiff has offered no
evidence of the entity defendant’s underlying financial position.1 The formation
of another LLC with a similar name may suggest the creation of a similar business
but it does not, without more, suggest the entity defendant will transfer either the
collateral or other assets to the new LLC; certainly the plaintiff provides no reason
to assume otherwise.2
For the reasons set forth above, the plaintiff’s motion for TRO and
preliminary injunction is denied, without prejudice to the plaintiff’s ability to seek
such relief upon a proper showing. The plaintiff’s motion for expedited hearing is
denied as moot.
1
Nor has the plaintiff addressed the financial condition of the individual
defendants, who furnished guaranties of the entity defendant’s debts.
2
The plaintiff concedes that Judge DuBose correctly decided Agco Corp. v.
Massey Tractor Co., 2009 WL 1010047 (S.D. Ala. 2009), but insists that case is
distinguishable because the debtor’s ability to repay the debt from assets or funds other
than the collateral was “unknown.” (Doc. 6 at 7 n.2). The ability of the entity defendant
to repay its debt from other sources is equally unknown, despite the plaintiff’s
unsupported assumption of “deteriorating finances,” (id.), and of bad motives behind the
creation of another LLC.
3
DONE and ORDERED this 6th day of January, 2017.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
4
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?