Jostens, Inc. v. Hammons, Jr.
Filing
154
MEMORANDUM OPINION AND ORDER granting in part 118 MOTION to Modify Preliminary Injunction filed by Jostens, Inc.. Signed by District Judge Amos L. Mazzant, III on 7/1/2022. (mmc)
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United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
JOSTENS, INC.,
Plaintiff,
v.
JERRY DEAN HAMMONS, JR. and
SANDRA LOUISE ARNOLD HAMMONS,
Defendants.
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Civil Action No. 4:20-CV-00225
Judge Mazzant
MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiff’s Motion to Modify Preliminary Injunction
(Dkt. #118). Having considered the motion and the relevant pleadings, the Court finds the motion
should be GRANTED in part.
BACKGROUND
The facts of this case have been more fully set forth in the Court’s Memorandum Opinion
and Order formalizing the Court’s grant of the preliminary injunction against Defendant Jerry
Hammons (“Jerry”) (Dkt. #13). Briefly, Plaintiff Jostens, Inc. (“Jostens”) brought this action
against Jerry, alleging he stole gold rings from Jostens’ Denton, Texas location while employed
there as a security guard. This Court granted Jostens’ Motion for Temporary Restraining Order on
March 19, 2020, and on April 16, 2020, the Court granted a preliminary injunction against Jerry
(Dkt. #13).
The preliminary injunction restricts Jerry “and his agents, servants, employees, and
attorneys, and all other persons in active concert or participation with him who receive actual
notice of this order by personal service or otherwise” from, among other things, “assigning,
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conveying, transferring, encumbering, dissipating, concealing, or otherwise disposing of any
assets, moneys, or other property in [Jerry’s] name or under his control” (Dkt. #13 at p. 10).
On August 7, 2020, Jostens amended its complaint to add Jerry’s wife, Sandra Louise
Arnold Hammons (“Sandra”), as a party in this action (Dkt. #26). Jostens alleges that Sandra and
Jerry used the proceeds from the stolen items to purchase a number of assets that they could not
have afforded otherwise. More specifically, Jostens asserts that Sandra and Jerry:
claim that they paid for all of their assets using gambling winnings, but even when
one considers the amounts [they] claimed in their tax returns for gambling winnings
and losses, their income still was not sufficient to pay for all of their assets. The
only plausible means by which [Jerry and Sandra] could have acquired their assets
was by using the proceeds of the items they stole from Jostens.
(Dkt. #118 at p. 4).
On May 17, 2022, Jostens filed an emergency motion against Jerry and Sandra, asserting
they have placed a “For Sale” sign on their 1966 Ford Mustang (the “Mustang”) and positioned
the vehicle at a prominent spot in front of their home in Valley View, Texas. Jostens claimed this
attempt to sell the vehicle was a direct violation of the Court’s preliminary injunction. The Court
held a hearing on May 24, 2022 (the “Hearing”) to determine whether to hold Jerry or Sandra or
both in contempt. On May 26, 2022, the Court denied the motion on the grounds that Jerry was
not in control of the asset in question and Sandra was not subject to the Court’s preliminary
injunction (Dkt. #116). However, at the Hearing, the Court indicated it would grant a motion to
add Sandra as a party to the original preliminary injunction. Jostens now moves to add Sandra as
a party to the preliminary injunction. Sandra responded on June 20, 2022 (Dkt. #136). Jostens
replied the same day, supplementing its motion with a transcript from Sandra’s deposition
(Dkt. #137).
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Beginning on June 27, 2022, this case was tried in front of a jury. On June 29, 2022, the
jury returned a verdict finding for Plaintiff Jostens, Inc. on all claims against both Defendants.
Specifically, the jury found Jerry and Sandra liable for civil theft under the Texas Liability Act
and awarded $5 million in damages; the jury found Jerry and Sandra liable for conversion and
awarded $2 million in damages; the jury found Jerry liable for breach of fiduciary duty and Sandra
liable for knowing participation in breach of fiduciary duty and awarded $1 million in damages.
Further, the jury assessed $1 million in punitive damages against Jerry and $500,000 in punitive
damages against Sandra. Because it could only recover actual damages on one of the claims,
Jostens elected remedies in the amount of $5 million for its successful claim of civil theft.
Following the verdict, the parties discussed issues with the Court that would potentially
require post-trial briefing, such as a permanent injunction and the creation of a constructive trust.
For this, Plaintiff wished to proceed with its motion to add Sandra to the preliminary injunction
against Jerry, hoping to protect any assets in Sandra’s control during the period prior to final
judgment. Sandra requested that the injunction be limited to prohibiting the sale or transfer of her
assets. The parties could not agree on the scope.
LEGAL STANDARD
A party seeking a preliminary injunction must establish the following elements: (1) a
substantial likelihood of success on the merits; (2) a substantial threat that plaintiffs will suffer
irreparable harm if the injunction is not granted; (3) that the threatened injury outweighs any
damage that the injunction might cause the defendant; and (4) that the injunction will not disserve
the public interest. Nichols v. Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008). “A preliminary
injunction is an extraordinary remedy and should only be granted if the plaintiffs have clearly
carried the burden of persuasion on all four requirements.” Id. Nevertheless, a movant “is not
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required to prove its case in full at a preliminary injunction hearing.” Fed. Sav. & Loan Ins. Corp.
v. Dixon, 835 F.2d 554, 558 (5th Cir. 1985) (quoting Univ. of Tex. v. Comenisch, 451 U.S. 390,
395 (1981)). The decision whether to grant a preliminary injunction lies within the sound discretion
of the district court. Weinberger v. Romero-Barcelo, 456 U.S. 305, 320 (1982).
ANALYSIS
I.
Likelihood of Success on the Merits
A plaintiff seeking a preliminary injunction must present a prima facie case of his
substantial likelihood to succeed on the merits. See Daniels Health Scis., LLC v. Vascular Health
Scis., 710 F.3d 579, 582 (5th Cir. 2013) (citing Janvey v. Alguire, 647 F.3d 585, 595-96 (5th Cir.
2011)). Discussion on this point is now moot. Plaintiff has succeeded on the merits for all of its
claims against both Jerry and Sandra. Further, there is support for a post-trial preliminary
injunction in cases where one is necessary “to protect the jury’s verdict while briefing and
argument continue[s] on post-trial damage issues.” Clearone Commc’ns, Inc. v. Chiang, No. 2:07CV-37-TC, 2010 WL 3222405, at *3 (D. Utah Aug. 13, 2010), aff’d in part sub nom. ClearOne
Commc’ns, Inc. v. Bowers, 643 F.3d 735 (10th Cir. 2011), and aff’d sub nom. ClearOne
Commc’ns, Inc. v. Bowers, 651 F.3d 1200 (10th Cir. 2011); see also Webb v. GAF Corp., 78 F.3d
53, 55 (2d Cir. 1996) (“The issues presented by this appeal involve the appropriateness of the
posttrial preliminary injunction that was issued by the district court.”). 1
II.
Likelihood of Irreparable Harm
A preliminary injunction is warranted only where the plaintiff shows he is “likely to suffer
irreparable harm in the absence of preliminary relief.” Winter v. Nat. Res. Def. Council, 555 U.S.
7, 20 (2008). “[H]arm is irreparable where there is no adequate remedy at law, such as monetary
The Court is unaware of any case law that suggests the standard for a post-trial preliminary injunction differs in
any way from a typical, pre-trial preliminary injunction.
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damages.” Janvey, 647 F.3d at 600. However, “the mere fact that economic damages may be
available does not always mean that a remedy at law is ‘adequate.’” Id. For example, a “district
court may maintain the status quo and issue a preliminary injunction to protect a remedy, including
a damages remedy, when the freezing of the assets is limited to the property in dispute or its direct,
traceable proceeds.” Id. As such, a plaintiff seeking economic damages is deemed to be irreparably
harmed when “a meaningful decision on the merits would be impossible without an injunction.”
See id. (citing Productos Carnics, S.A. v. Cent. Amer. Beef & Seafood Trading Co., 621 F.2d 683,
686–87 (5th Cir. 1980)). For instance, a plaintiff seeking economic damages will suffer irreparable
harm when the defendant’s dissipation of assets would require the plaintiff to initiate “a
multiplicity of suits . . . to gain relief.” See Fed. Sav., 835 F.2d at 561 (quoting Lynch Corp. v.
Omaha Nat. Bank, 666 F.2d 1208, 1212 (1981) (internal quotation marks omitted)).
Jostens has demonstrated that it is likely to suffer irreparable injury if a preliminary
injunction is not issued against Sandra. A preliminary injunction that prevents Sandra from selling
the assets that are in her control—rather than Jerry’s—would help ensure that those assets could
go toward satisfying the $6.5 million judgment that Jostens is owed. See Janvey, 647 F.3d at 600
(finding the plaintiff would suffer irreparable harm because “dissipation of the assets that are the
subject of this suit . . . would impair the [district court’s] ability to grant an effective relief”). If a
preliminary injunction does not issue, on the other hand, and any remaining assets are dissipated,
Jostens may be forced to initiate more litigation in the future to be made whole. Although Jostens
will likely never recover much from the assets it has already lost, if the Court does not issue an
injunction against Sandra, it could lose what little is left of the proceeds from the millions of
dollars’ worth of stolen gold rings. Thus, Jostens has shown a strong likelihood of irreparable
harm.
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III.
Balance of Hardships
When deciding whether a preliminary injunction should issue, “courts must balance the
competing claims of injury and must consider the effect on each party of granting or withholding
of the requested relief.” Winter, 555 U.S. at 24 (citation omitted). As a result, the Court must
balance the hardship Sandra would face against the irreparable harm Jostens would face if a
preliminary injunction does not issue—namely, the inability to obtain meaningful relief from this
Court and the subsequent need to pursue additional lawsuits.
As previously mentioned, Jostens will likely never recover much of the assets it has already
lost. If the Court does not issue an injunction against Sandra, it could lose even more. Sandra
responds that the hardship she will face outweighs the hardship that Jostens potentially faces. She
contends that she is already tens of thousands of dollars in arrears for attorneys’ fees for this matter.
Because she will require Jostens’ and this Court’s approval each time she makes a purchase on a
debit card or cashes a check—thereby requiring assistance of her attorney—she simply cannot
afford a preliminary injunction of this scope.
The Court is sympathetic to this argument. Sandra no doubt faces hardship due to her
current financial situation. But much of this hardship was self-induced. Jerry and Sandra had filed
for bankruptcy in 2016. A short time later, at the first sign of increased wealth—wealth the jury
determined was accumulated from ill-gotten gains—Sandra and Jerry began making extravagant
purchases. Evidence at trial showed that Jerry and Sandra bought with the proceeds of the stolen
rings multiple vehicles, a house with land, exotic pets like llamas and peacocks, international
travel, etc. The Court will not shield Sandra from the consequences of these choices at the expense
of Jostens. So, although the Court recognizes the hardship Sandra will face pursuant to the asset
freeze against her, the Court finds the balance of the hardship weighs in favor of Jostens.
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That said, the proposed preliminary injunction would create serious hardships on Sandra’s
ability to conduct her routine affairs. For this reason, the Court will modify the proposed
preliminary injunction to ease the burden on Sandra while protecting Jostens’ right to a meaningful
recovery.
IV.
The Public Interest
Lastly, for a preliminary injunction to issue, the injunction must not disserve the public.
The Court sees no reason why an injunction would do so in this circumstance. To the contrary, the
requested injunction furthers the public’s interest in protecting against civil theft, conversion, and
breach of fiduciary duty, which, evidenced by its award of $1.5 million in punitive damages, the
jury found noteworthy. See Joshua Ropa v. Fox, No. 4:16-cv-752, 2016 WL 6248743, at *4 (E.D.
Tex. Oct. 26, 2016); see also Tujague, 2018 WL 4816094, at *4.
CONCLUSION
For the foregoing reasons, Plaintiff’s Motion to Modify Preliminary Injunction (Dkt. #118)
is GRANTED in part.
It is hereby ORDERED that Sandra Hammons and her agents, servants, employees, and
attorneys, and all other persons in active concert or participation with her who receive actual notice
of this order by personal service or otherwise, are hereby enjoined from:
a. transferring, liquidating, converting, selling, loaning, pledging, assigning, granting a lien
or security interest or other interest in, concealing, dissipating, spending, gambling,
withdrawing, or otherwise disposing of, or assisting others in transferring, liquidating,
converting, selling, loaning, pledging, assigning, granting a lien or security interest or other
interest in, concealing, dissipating, spending, gambling, withdrawing, or otherwise
disposing of, any personal or business assets, now existing or hereinafter acquired,
including but not limited to real and/or personal property, “goods,” “equipment,”
“fixtures,” “general intangibles,” “inventory,” “checks,” “notes,” “instruments” (as these
terms are defined in the Uniform Commercial Code), lines of credit, chattels, leaseholds,
contracts, mail or other deliveries, shares of stock, accounts, credits, premises, receivables,
funds, and cash (collectively, “Assets”), wherever located, whether owned, controlled, held
by, in whole or in part, for the benefit of, or subject to access by, or belonging to Mrs.
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Hammons, in the actual or constructive possession of Mrs. Hammons, or in the actual or
constructive possession of, or owned, controlled, or held by, or subject to access by, or
belonging to, any business organization, trust, partnership, or other entity directly or
indirectly owned, managed, or controlled by or under common control with Mrs.
Hammons, including, but not limited to, any Assets held by or for Mrs. Hammons in any
account at any bank or savings and loan institution, or with any precious metal dealer,
mobile payment application, credit card processing agent, automated clearing house
processor, network transaction processor, bank debit processing agent, customer service
agent, commercial mail receiving agency, or mail holding or forwarding company, or any
credit union, retirement fund custodian, money market or mutual fund, storage company,
trustee, or with any broker-dealer, escrow agent, title company, commodity trading
company, or other financial institution or depository of any kind, without the prior written
consent of Jostens or court approval;
b. opening or causing to be opened any safety deposit boxes, safe, vault, commercial mail
boxes, or storage facilities titled in Mrs. Hammons’ name, or subject to access by Mrs.
Hammons or under Mrs. Hammons’ control, without providing Jostens’ attorneys prior
notice and an opportunity to inspect the contents in order to determine that they contain no
Assets covered by this Order;
c. incurring liens or encumbrances on real property, personal property, or other assets in
the name, singly or jointly, of Mrs. Hammons and/or any corporation, partnership, or other
entity directly or indirectly owned, managed, or controlled by Mrs. Hammons;
and/or
d. wasting, injuring, or otherwise impairing any property in Mrs. Hammons’ possession to
devalue the property or make it unsalable.
It is further ORDERED Jostens is not required to post any bond in connection with this
order modifying the preliminary injunction.
It is further ORDERED that this Order shall take effect immediately and shall remain in
.
effect until such time as the Court modifies or dissolves it.
Except as expressly modified herein, this Order has no effect on the existing preliminary
injunction (Dkt. #13), which remains in effect until further order of the Court.
IT IS SO ORDERED.
SIGNED this 1st day of July, 2022.
___________________________________
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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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