Ross Dress for Less, Inc. v. Walton Foothills Holdings VI, L.L.C. et al

Filing 38

ORDER: The portion of plaintiff's Verified Emergency Motion for Ex ParteTemporary Restraining Order and Preliminary Injunction 20 seeking a temporary restraining order is GRANTED in part and DENIED in part as set forth in the attached Order. By Judge Philip A. Brimmer on 9/23/14. (pabsec)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 14-cv-02517-PAB-KMT
ROSS DRESS FOR LESS, INC.,
Plaintiff,
v.
WALTON FOOTHILLS HOLDINGS VI, L.L.C. and
FOOTHILLS METROPOLITAN DISTRICT,
Defendants.

ORDER

This matter comes before the Court on the Verified Emergency Motion for Ex
Parte Temporary Restraining Order [Docket No. 20] filed by plaintiff Ross Dress for
Less, Inc. (“Ross”). Ross requests an order temporarily enjoining defendant Walton
Foothills Holdings VI, L.L.C. (“Walton”) from taking any action that (1) demolishes any
portion of the building located at 112 E. Foothills Parkway, Fort Collins, Colorado,
80525 in which Ross operates a retail store (the “Store”), (2) disrupts physical or visual
access to the Store, (3) creates safety hazards for Ross’s employees and customers; or
(4) destroys, diverts, or blocks access to the parking lot that services the Store through
use of fencing or other materials. Docket No. 20 at 12-13. The Court held a hearing on
the motion for a temporary restraining order on September 22, 2014. Counsel for
plaintiff and both defendants appeared at the hearing. Neither side asked to present
anything other than oral argument. Thus, the Court will decide this motion based on the
briefs, attachments to the briefs, and oral argument. The Court has jurisdiction

pursuant to 28 U.S.C. § 1331.
I. BACKGROUND
In 1997, Ross signed a lease (“lease”) for the Store with a term of fifteen years
and three additional options to renew for five-year periods. Docket No. 20-1 at 4. The
Store is located in a commercial complex that includes a number of other buildings as
well as parking spaces (the “shopping center”). See generally id. at 36. In relevant
part, the lease provides that, “[e]xcept as set forth in Exhibit D [to the lease], [Walton]
may not make any material change to the Site Plan without [Ross’s] prior written
approval, which approval shall not be unreasonably withheld or delayed.” Id. at 5.
Exhibit D, in turn, enumerates four specific buildings that Walton is permitted to tear
down and remodel. Id. at 39, ¶¶ 1-3, 5.
During the week of September 1, 2014, Walton began construction in the
parking area and common areas of the shopping center. Docket No. 20 at 5. W alton
allegedly assured Ross that its construction activities would not interfere with Ross’s
business. Despite the construction activities, the Store still has access to as many as
101 parking spaces, Walton has put up several large signs indicating the Store is open
for business during construction, and Walton has, since the filing of the TRO motion,
added additional lighting to address plaintiff’s safety concerns. Docket No. 27 at 3, 1011. On September 18, 2014, Walton began demolishing the vacant unit abutting the
Store that previously contained an ARC thrift store (the “ARC store”). Docket No. 20 at
5, see also Docket No. 27 at 4. By September 21, 2014, demolition of the ARC store
was substantially complete. Docket No. 27 at 8. W alton intends to start remodeling

2

activities on the ARC store site.
Walton indicates that it has no intention to dem olish the Store unless and until it
has a right to do so through a pending condemnation action, and stipulates to an order
prohibiting it from doing so. Docket No. 27 at 6.
II. ANALYSIS
To justify the issuance of a temporary restraining order, the moving party must
show (1) a likelihood of success on the merits; (2) a likelihood that the movant will suffer
irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips
in the movant's favor; and (4) that the injunction is in the public interest. RoDa Drilling
Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009) (citing Winter v. Natural Resources
Defense Council, Inc., 555 U.S. 7, 20 (2008)).
A. Likelihood of Success on the Merits
For the reasons outlined at the September 22, 2014 hearing, the Court finds that
plaintiff is not likely to succeed on the merits with respect to disruption of access to the
Store, the creation of safety hazards, and the restriction of parking spaces. The parties
agree that Walton has the right to conduct a substantial amount of the construction
currently underway at the shopping center. Any construction inherently causes some
degree of disruption. Plaintiff has not shown that Walton’s construction activity
generally is in breach of the lease, and in fact the lease specifically contemplates that
Walton is able to perform certain construction without obtaining plaintiff’s approval.
Plaintiff has, however, shown a likelihood of success on the merits with respect
to demolition and remodeling of the ARC store. The lease provides that, except as

3

specifically enumerated in Exhibit D, Walton is not permitted to make any “material
change” to the Site Plan without Ross’s prior written approval. Docket No. 20-1 at 5.
Exhibit D contains no mention of the ARC store, id. at 39, and W alton has shown no
evidence that plaintiff either provided written approval or unreasonably withheld or
delayed its written approval before Walton began demolishing the ARC store.
The Court finds that demolition and remodeling of the ARC store is a material
change to the Site Plan. Thus, plaintiff is likely to succeed on its claim that Walton
breached the lease when it demolished the ARC store and will breach the lease through
any remodeling or building activities on the ARC store site.
B. Irreparable Harm
With respect to the ARC store site, plaintiff has demonstrated that it will be
irreparably harmed in the absence of a temporary restraining order. Walton argues that
any harm to plaintiff would be compensable through money damages. Docket No. 27
at 5-7. However, at the hearing, Walton was unable to explain how any economic
damages model could differentiate between the harm caused by the demolition and
remodeling of the ARC store and the harm caused by other construction activities
allowed under the lease. The Court finds that where, as here, two different activities
are occurring simultaneously, either of which could result in lost profits to plaintiff, it will
be difficult if not impossible for plaintiff to prove a precise measure of damages
attributable solely to the demolition and remodeling of the ARC store.
C. Balance of Equities and Public Interest
Considering the broad relief that plaintiff sought at the hearing, the Court finds

4

the third and fourth TRO factors do not weigh in favor of either party. A temporary
restraining order will disrupt a large ongoing development project, but the absence of an
injunction will result in a disruption of Ross’s business. Neither side has demonstrated
a substantial public interest that weighs heavily in favor or against injunctive relief.
However, when considering the narrow issue of an injunction concerning the ARC site,
the Court finds that Ross has shown that the equities tip in its favor given Walton’s
failure to show that it has a right under the lease to demolish or remodel the ARC store
site and that it is in the public interest for Ross to be able to operate its business without
the disruption that will likely result from any remodeling activities at that site.
III. CONCLUSION
For the foregoing reasons, and pursuant to Fed. R. Civ. P. 65(b), it is
ORDERED that the portion of plaintiff’s Verified Emergency Motion for Ex Parte
Temporary Restraining Order and Preliminary Injunction [Docket No. 20] seeking a
temporary restraining order is GRANTED in part and DENIED in part. It is further
ORDERED that defendant Walton Foothills Holdings VI, L.L.C. and its officers,
agents, servants, and employees are enjoined from conducting any demolition of the
building located at 112 E. Foothills Parkway, Fort Collins, Colorado, 80525 in which
Ross operates its retail store. It is further
ORDERED that defendant Walton Foothills Holdings VI, L.L.C. and its officers,
agents, servants, and employees are enjoined from conducting any remodeling of the
former ARC store site. It is further
ORDERED that defendant Walton Foothills Holdings VI, L.L.C. and its officers,

5

agents, servants, and employees will be permitted to perform any cleanup work on the
already-demolished portion of the former ARC store site that is necessary to remove
any potential safety hazards and to secure the site from damage during the pendency
of the injunction. It is further
ORDERED that, pursuant to Fed. R. Civ. P. 65(b)(2), unless otherwise ordered,
this order shall expire on October 8, 2014 at 12:00 p.m. It is further
ORDERED that, pursuant to Fed. R. Civ. P. 65(c), plaintiff shall post a bond in
the amount of $100,000 into the court registry as security no later than September 25,
2014. This temporary restraining order shall not be effective unless and until this
security is deposited with the Clerk of the Court. It is further
ORDERED that the portion of plaintiff’s Verified Emergency Motion for Ex Parte
Temporary Restraining Order and Preliminary Injunction [Docket No. 20] seeking a
temporary restraining order is otherwise DENIED. It is further
ORDERED that the portion of plaintiff’s Verified Emergency Motion for Ex Parte
Temporary Restraining Order and Preliminary Injunction [Docket No. 20] seeking a
preliminary injunction is set for hearing on October 8, 2014 at 8:30 a.m. Counsel shall
exchange witness lists and exhibits no later than October 1, 2014. Any additional briefs
shall be filed no later than 12:00 p.m. on October 6, 2014, and are not to exceed 10
pages.

6

DATED September 23, 2014.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

7