TOTEM FOREST PRODUCTS INC et al v. T & D TIMBER PRODUCTS LLC
ORDER ON PLAINTIFFS MOTION FOR A TEMPORARY RESTRAINING ORDER granting 4 Motion for TRO; granting 4 Motion for Preliminary Injunction By JUDGE JON D. LEVY. (akr)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
TOTEM FOREST PRODUCTS,
INC., & TOTEM STEEL
T & D TIMBER PRODUCTS, LLC, )
ORDER ON PLAINTIFF’S MOTION FOR A TEMPORARY RESTRAINING
This matter comes before the Court on the motion of Totem Forest Products,
Inc. and Totem Steel International, Inc. (collectively “Plaintiffs”) for a Temporary
Restraining Order (ECF No. 4) (“Motion”).
I. FACTUAL BACKGROUND
Plaintiffs’ Motion and supporting documents establish that the Plaintiffs
purchased 6,124 8” x 4’ x 16’ timber crane mats (“Mats”) from the Defendant pursuant
to a course of dealing that commenced in early December 2015. The purchases were
documented by a written purchase agreement, purchase orders and written terms
and conditions of sale. The Defendant confirmed the Plaintiffs’ purchase of the Mats
through invoices which were sent to the Plaintiffs for payment after delivery of the
Mats. Under the purchase agreement, and the terms and conditions of sale, the
Defendant agreed to a bailment whereby it would store the Mats for the Plaintiffs
and keep the Mats segregated from other materials on the Defendants’ property. The
Defendant agreed to load out the Mats for shipment to the Plaintiffs’ customers when
directed by the Plaintiffs.
On November 30, 2016, the Plaintiffs’ director of operations visited the
Defendants’ business location in Biddeford. At that visit, the Defendants’ president
pointed out over 4,200 Mats as the Plaintiffs’ inventory which were segregated from
the Defendant’s other materials at the Biddeford location. On December 9, 2016, the
Defendants’ president confirmed that the inventory of Mats belonging to the
Plaintiffs was at locations in Biddeford, Jefferson, Lyman and Lincoln as of December
5, 2016. The Plaintiffs made additional purchases of Mats in December 2016 to bring
the total to 6,214.
On February 1, 2017, the Defendant’s president informed the Plaintiffs’
director of operations that the Defendants’ business operations had been frozen by
the IRS. The Defendant has not allowed the Plaintiffs to inspect the Plaintiffs’
inventory of Mats, and has not made the Mats available for shipment to the Plaintiffs’
customers since that time. On February 13, 2017, the Defendant notified the
Plaintiffs that the Defendant was in the process of filing for bankruptcy protection.
On February 14, 2017, the Plaintiffs’ director of operations flew in from Portland,
Oregon to inspect the Plaintiffs’ Mats, but was refused access to the Defendants’
facility in Lyman. He then drove to Biddeford, and observed from the street that the
Mats which were identified to him on November 30, 2016 had been relocated.
The Plaintiffs filed their complaint on February 23, 2017 together with its
motion for a temporary restraining order, supported by the Declaration of Trevor
Sarazin. Notice of the Plaintiffs’ Motion was provided to the Defendant’s registered
II. LEGAL ANALYSIS
In considering a request for a temporary restraining order, the court must
determine: “(1) the movant’s likelihood of success on the merits; (2) whether and to
what extent the movant would suffer irreparable harm if the request were rejected;
(3) the balance of hardships between the parties; and (4) any effect that the injunction
or its denial would have on the public interest.” Wicked Good Charcoal, Inc. v. RanchT, LLC, 2015 U.S. Dist. LEXIS 173255, at *2-3 (D. Me. Dec. 30, 2015) (quoting DiazCarrasquillo v. Garcia-Padilla, 750 F.3d 7, 10 (1st Cir. 2014)).
Likelihood of Success on the Merits
I conclude at this preliminary stage that the Plaintiffs have established a
likelihood of success on the merits related to the Plaintiffs’ breach of contract,
conversion and trespass to personal property claims. The Plaintiffs purchased the
Mats from the Defendant pursuant to written agreements whereby the Defendant
also agreed to store the Mats for the Plaintiffs separately from other materials until
the Plaintiffs needed to ship them to the Plaintiffs’ customers. The Defendant
identified the Mats as having been sold to, and stored for the Plaintiffs. The
Defendant has relocated the bulk of the Mats that were in Biddeford, and refused to
allow the Plaintiffs director of operations to inspect the Mats.
The Plaintiffs will suffer irreparable harm absent a temporary restraining
order. The Defendant is likely insolvent, has represented that its business has been
frozen by the IRS, and has threatened to file bankruptcy. The Mats were “entrusted”
to the Defendant by the Plaintiffs, and the Defendant is a merchant who deals in the
same kind of goods. Hence, the Defendant arguably has the power to transfer title to
the Mats to a buyer in the ordinary course of business under the Uniform Commercial
Code. See 11 M.R.S. § 2-403(2).
Balance of Hardships
The balance of hardships weighs in the Plaintiffs’ favor. Absent a temporary
restraining order, the Plaintiffs could lose over $2.1 million worth of Mats that they
bought and paid for. Conversely, the order will do no more harm to the Defendant
than what it agreed to do in its written agreements.
The public interest favors granting the injunction. “[T]here is a strong public
interest in fair dealing and the solemnity of contracts; if commerce is to function in
our capitalistic system, entrepreneurs must play by the rules.” K-Mart Corp. v.
Oriental Plaza, Inc., 875 F.2d 907, 916 (1st Cir. 1989).
Rule 65(c) of the Federal Rules of Civil Procedure provides that a court may
only issue a preliminary injunction or temporary restraining order if the movant gives
security for the damages that might be sustained, if the order is entered wrongfully.
The Court has discretion to determine the amount of the security. Crowley v. Local
No. 82, Furniture & Piano Moving, Furniture Store Drivers, Helpers, Warehousemen,
& Packers, 679 F.2d 978, 987 (1st Cir. 1982) (reversed on other grounds).
In exercising this discretion, the Court considers the likely harm to the party
enjoined. The chance that the Defendant will be harmed by the requested injunction
is remote. The Plaintiffs request that the Court order the Defendant to do what it
agreed to do in the first place, i.e. segregate the Plaintiffs’ Mats, account for the Mats’
whereabouts, not move or sell the Mats, and let the Plaintiffs inspect the Mats. A
bond in the amount of $1,000 is sufficient. See, e.g., Waldron v. George Weston
Bakeries, Inc., 575 F. Supp. 2d 271, 279 (D. Me. 2008) (bond of $1,000 sufficient when
likelihood of harm to Defendant from injunction is remote).
For the reasons stated above, the Motion for Temporary Restraining Order and
Motion for Preliminary Injunction (ECF No. 4) is GRANTED and I hereby ORDER
that: Defendant T & D Timber Products, LLC and its officers, members, managers,
agents, servants, employees, attorneys, and any and all persons in active concert or
participation with them who receive notice of such order, directly or otherwise
(“Enjoined Parties”), are temporarily enjoined as follows.
The Enjoined Parties are enjoined from selling, leasing, disposing
of, relocating, or otherwise using for the Enjoined Parties’ benefit 6,124 8” x 4’ x 16’
timber crane mats (“Mats”) that were purchased by the Plaintiffs from the Defendant,
unless otherwise agreed in writing by the Plaintiffs.
The Enjoined Parties shall provide the Plaintiffs and/or the
Plaintiffs’ agents, attorneys and employees with reasonable access to any location
where the Mats are currently being stored, and shall provide prompt and
commercially reasonable information to the Plaintiffs regarding the present
whereabouts or disposition of the Mats, and
The Enjoined Parties shall keep the Mats segregated and
separate from other personal property at any location where they are being stored.
The Court determines that a bond of $1,000 is sufficient security
pursuant to Fed. R. Civ. P. 65(c).
The Clerk shall schedule a conference call to discuss scheduling and
briefing on the Plaintiffs’ motion for a preliminary injunction.
Dated this 24th day of February 2017
/s/ JON D. LEVY
U.S. DISTRICT JUDGE
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