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General Electric Capital Corporation v. Deer Valley Trucking, Inc.

United States District Court, D. North Dakota, Northwestern Division

December 15, 2014

General Electric Capital Corporation, Plaintiff,
v.
Deer Valley Trucking, Inc., Defendant.

ORDER GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

DANIEL L. HOVLAND, District Judge.

Before the Court is the Plaintiff's motion for a preliminary injunction filed on November 24, 2014. See Docket No. 5. On November 24, 2014, the Court granted the Plaintiff's motion for an ex parte temporary restraining order. See Docket No. 10. The temporary restraining order prohibited the Defendant from moving, sequestering, or using the collateral securing the loans, which consists of highly mobile tanker-trailers, until further order of the Court. As required by Rule 65(b) of the Federal Rules of Civil Procedure, a hearing was held on December 9, 2014, to address whether to dissolve the temporary restraining order or grant a preliminary injunction. Fed.R.Civ.P. 65(b)(2)-(3). The Defendant, despite having been served with notice of the hearing, did not appear at the hearing and has never responded to the Plaintiff's motion for a preliminary injunction. For the reasons set forth below, the Court grants the Plaintiff's motion for a preliminary injunction.

I. BACKGROUND

The Plaintiff, General Electric Capital Corporation ("GE Capital"), is a corporation organized and existing under the laws of the State of Delaware, with its principal office located in Connecticut.

The Defendant, Deer Valley Trucking, Inc. ("Deer Valley"), is a corporation organized under the laws of Idaho, and has its principal place of business in Idaho Falls, Idaho.

GE Capital alleges that on or about April 27, 2012, Deer Valley executed a Promissory Note in favor of GE Capital in the original principal amount of $2, 300, 340. In order to secure the indebtedness due under the Promissory Note, GE Capital and Deer Valley entered into a Master Security Agreement pursuant to which Deer Valley granted GE Capital a security interest in certain collateral identified in a Collateral Schedule. See Docket Nos. 1-1 and 1-3. On or about December 20, 2012, GE Capital gave Deer Valley notice of default. See Docket No. 1-4. Thereafter, on or about February 28, 2013, GE Capital, Deer Valley, and others entered into a forbearance and debt restructure agreement ("First Forbearance Agreement"). See Docket No. 1-5. On June 15, 2013, the loan was further modified in accordance with the terms of a second forbearance and debt restructure agreement ("Second Forbearance Agreement"). See Docket No. 1-6. GE Capital contends Deer Valley is in default under the Promissory Note, the Master Security Agreement, the Collateral Schedule, the First Forbearance Agreement, and the Second Forbearance Agreement (collectively, the "Loan Documents") as a result of, inter alia, its failure to make payments when due thereunder. As a result, GE Capital has accelerated Deer Valley's obligations under the Loan Documents and they are immediately due and payable.

On November 20, 2014, GE Capital filed its complaint in this Court. See Docket No. 1. The complaint makes claims for injunctive relief, specific performance, claim and delivery, and breach of contract. On November 24, 2014, GE Capital filed a "Motion for Injunctive Relief, " including a request for an ex parte temporary restraining order under Rule 65 of the Federal Rules of Civil Procedure. See Docket No. 5.

On November 24, 2014, the Court issued an order granting a temporary restraining order ex parte ("TRO"). See Docket No. 10. The TRO temporarily restrained and enjoined Deer Valley from moving, sequestering, or using the collateral identified in the order ("Remaining Collateral"). See Docket No. 10, pp. 9-11. The TRO also set a hearing for 4:00 p.m. on December 9, 2014, to determine whether the TRO should become a preliminary injunction or whether the TRO should be dissolved.

On December 9, 2014, a hearing was held before the Court. Deer Valley did not attend the hearing or request to appear telephonically. GE Capital was represented by counsel. In support of its request for a preliminary injunction, GE Capital relied upon the pleadings and affidavits previously submitted to the Court. In addition it presented an additional affidavit from Quinn P. Fylling, in support of its motion for preliminary injunction. See Docket No. 15.

The record demonstrates GE Capital has served Deer Valley with the TRO, the motion for injunctive relief, and the documents in support of injunctive relief. See Docket Nos. 8, 9, 12, and 15. GE Capital contends that is has requested Deer Valley to identify the location of the collateral, so it may inspect the collateral. See Docket No. 15. GE Capital claims that Deer Valley has refused or failed to disclose the location of the collateral or allow for inspection. Id. Also, GE Capital claims it has received inconsistent information concerning the collateral from Deer Valley. Id.

II. LEGAL DISCUSSION

GE Capital seeks a preliminary injunction pursuant to Rule 65(a) of the Federal Rules of Civil Procedure. The primary purpose of a preliminary injunction is to preserve the status quo until a court can grant full, effective relief upon a final hearing. Ferry-Morse Seed Co. v. Food Corn, Inc., 729 F.2d 589, 593 (8th Cir. 1984). A preliminary injunction is an extraordinary remedy, with the burden of establishing the necessity of a preliminary injunction placed on the movant. Watkins Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003); Baker Elec. Coop., Inc. v. Chaske, 28 F.3d 1466, 1472 (8th Cir. 1994); Modern Computer Sys., Inc. v. Modern Banking Sys., Inc., 871 F.2d 734, 737 (8th Cir. 1989). The court determines whether the movant has met its burden of proof by weighing the factors set forth in Dataphase Systems, Inc., v. C L Systems, Inc., 640 F.2d 109, 114 (8th Cir. 1981). The Dataphase factors include "(1) the threat of irreparable harm to the movant; (2) the state of balance between this harm and the injury that granting the injunction will inflict on other parties litigant; (3) the probability that movant will succeed on the merits; and (4) the public interest." Id. "No single factor in itself is dispositive; in each case all of the factors must be considered to determine whether on balance they weigh towards granting the injunction." Baker Elec. Coop., Inc., 28 F.3d at 1472 (quoting Calvin Klein Cosmetics Corp. v. Lenox Labs., Inc., 815 F.2d 500, 503 (8th Cir. 1987)); see CDI Energy Servs., Inc. v. W. River Pumps, Inc., 567 F.3d 398, 401-03 (8th Cir. 2009).

A. PROBABILITY OF SUCCESS ON THE MERITS

When evaluating a movant's "likelihood of success on the merits, " the court should "flexibly weigh the case's particular circumstances to determine whether the balance of equities so favors the movant that justice requires the court to intervene to preserve the status quo until the merits are determined.'" Calvin Klein Cosmetics Corp., 815 F.2d at 503 (quoting Dataphase, 640 F.2d at 113). At this preliminary stage, the Court need not decide whether the party seeking the temporary restraining order will ultimately prevail. PCTV Gold, Inc. v. SpeedNet, LLC, 508 F.3d 1137, 1143 (8th Cir. 2007). Although a temporary restraining order cannot be issued if the movant has no chance on the merits, "the Eighth Circuit has rejected a requirement as to a party seeking preliminary relief prove a greater than fifty per cent likelihood that he will prevail on the merits.'" Id. (quoting Dataphase, 640 F.2d at 113). The Eighth Circuit has also held ...


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