Alexander v. Allen et al

Filing 32

OPINION AND ORDER denying 2 Motion for Preliminary Injunction. Signed by Judge John E. Steele on 5/19/2014. (RKR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
STUART
ALEXANDER,
individual,

an

Plaintiff,
v.

Case No: 2:13-cv-885-FtM-29CM

JAMES
F.
ALLEN,
an
individual and HERTEL PARK
ASSOCIATES I, LLC, a New
York
limited
liability
company,
Defendants.
OPINION AND ORDER
This

matter

comes

before

the

Court

on

Plaintiff

Stuart

Alexander's Motion for Preliminary Injunction (Doc. #2) filed on
December 23, 2013.

Defendants filed a Responsive Brief (Doc. #27)

on March 17, 2014, and the Court heard oral argument on April 14,
2014.
This case involves a partnership dispute between two general
partners of the Hertel Park Associates Limited Partnership (the
Limited Partnership), whose purpose was to construct, own, and
operate a 138-unit apartment complex and its first floor commercial
space located in Buffalo, New York (the Hertel Park Property).
Just prior to the filing of this lawsuit, the Hertel Park Property
was sold, with proceeds amounting to $1,926,683.39.

At oral

argument all parties stated they are content with the sale; there
are no claims relating to the sale itself; and the distribution
formula for the proceeds of the sale is not disputed.

Plaintiff,

however, seeks a preliminary injunction precluding defendants from
distributing the proceeds in accordance with a limited partnership
agreement so that the proceeds can constitute a res from which any
judgment plaintiff receives in this litigation can be collected.
The

Court

finds

that

such

a

preliminary

injunction

is

not

appropriate.
I.
A district court may grant a preliminary injunction only if
the moving party shows that: “(1) it has a substantial likelihood
of success on the merits; (2) irreparable injury will be suffered
unless the injunction issues; (3) the threatened injury to the
movant outweighs whatever damage the proposed injunction may cause
the opposing party; and (4) if issued, the injunction would not be
adverse to the public interest.” Siegel v. LePore, 234 F.3d 1163,
1176 (11th Cir. 2000)(en banc).

“A preliminary injunction is an

extraordinary and drastic remedy not to be granted unless the
movant clearly established the ‘burden of persuasion’” for each
prong of the analysis. Id. (alteration in original) (quoting
McDonald's Corp. v. Robertson, 147 F.3d 1301, 1306 (11th Cir.
1998)).

Issuance of a preliminary injunction is committed to the

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sound discretion of the court.

Valle v. Singer, 655 F.3d 1223,

1225 (11th Cir. 2011).
II.
The crux of plaintiff’s claims is that defendants violated
§13.01 of the Amended and Restated Agreement of Limited Partnership
(the Limited Partnership Agreement), which precluded the Limited
Partner from assigning or transferring its interest without the
written consent of all general partners.

Plaintiff alleges that

on March 31, 2010, defendant Allen facilitated the transfer of the
Limited Partnership interest to Hertel Park Associates I, LLC
(HPAI); that Allen was the sole owner and member of HPAI; and that
plaintiff did not know or approve of this transfer, and it was
concealed from him until 2013.
duty

by

Allen

Partnership

for

interest

Count I alleges breach of fiduciary

facilitating
to

the

HPAI.

transfer

Count

II

of

alleges

the

Limited

aiding

and

abetting breach of fiduciary duty against HPAI for knowingly
participating in Allen’s breach.
Limited

Partnership

Agreement

Count III alleges breach of the
by

Allen

for

facilitating

transfer of the Limited Partnership interest to HPAI.

the

Count IV

seeks to impose a constructive trust on the proceeds in the
possession of Allen and an equitable accounting of the proceeds of
the sale of the Hertel Park Property.

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A. Substantial Likelihood of Success
The Court concludes that plaintiff has not shown he has a
substantial likelihood of success on the merits.

The record

reflects that in preparation for the sale of the Hertel Park
Property in 2013, plaintiff was clearly made aware of and approved
the transfer of the Limited Partnership interest to Allen’s LLC.
A July 10, 2013, letter from CPA Richard Wayne to plaintiff
regarding the distributions from the anticipated sale clearly
identifies HPAI as the Limited Partner and recipient of a portion
of the distribution proceeds.

(Doc. #27-1.)

A July 12, 2013,

email from plaintiff to Allen stated that he had reviewed Mr.
Wayne’s
correct.

document
(Id.)

and

confirmed

the

distribution

figures

were

The record also contains a July 17, 2013,

Approval and Acknowledgment signed by plaintiff stating that he
had reviewed the distribution and allocation estimates; and he had
reviewed and was satisfied with the Wayne calculations “which show
the anticipated allocations and distributions to myself and to
James F. Allen . . . and to Hertel Park Associates I, LLC (owned
by James F. Allen) as the Limited Partner . . . .”

(Id.)

The

Approval and Acknowledgment continued that plaintiff had reviewed
the allocations “to James F. Allen as the sole owner of Hertel
Park

Associates

I,

LLC,

the

single

Limited

partner”

and

“approve[ed] such estimates of allocations and distributions.”

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(Id.)

The

Approval

and

Acknowledgment

further

stated

that

plaintiff “make[s] no claim to any right to share in the Limited
Partner interests in Hertel Park Associates LP and I acknowledge
that Hertel Park Associates I, LLC is the Limited Partner and that
James F. Allen is the sole owner of Hertel Park Associates I, LLC,
the

Limited

Partner.”

(Id.)

Finally,

the

Approval

and

Acknowledgement was signed by plaintiff “with the knowledge that
Hertel Park Associates I, LLC, the Limited Partner, and James F.
Allen will rely on the representations” made in the document.
(Id.)

The Sales Contract is dated July 19, 2013, and the closing

occurred on December 19, 2013.
B. Irreparable Injury
Plaintiff

has

also

failed

to

establish

that

injury will be suffered unless the injunction issues.

irreparable
Plaintiff

has an adequate remedy at law in the form of a money judgment, and
has brought three counts seeking such a judgment.
C.

Balance Of Harm Against Benefit

Plaintiff has failed to establish that any threatened injury
to

him

outweighs

damage

the

proposed

defendants by delaying the distributions.

injunction

may

cause

The parties to the sale

are entitled to their distribution, including plaintiff.

No

reason has been shown to hold the proceeds of the sale hostage
while this litigation continues.

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D.

Public Interest

There is no showing that issuance of an injunction would or
would not be adverse to the public interest.
Accordingly, it is hereby
ORDERED:
Plaintiff

Stuart

Alexander's

Motion

for

Preliminary

Injunction (Doc. #2) is DENIED.
DONE and ORDERED at Fort Myers, Florida, this
of May, 2014.

Copies:
Counsel of Record

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19th

day