Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_16-cv-01134/USCOURTS-cand-4_16-cv-01134-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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United States District Court 

Northern District of Californi

a

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

IMC INVESTMENT GROUP FE WINERY, 

LLC, 

Plaintiff, 

v. 

FAIRWINDS ESTATE, LLC, et al., 

Defendants. 

Case No. 16-cv-01134-JSW 

ORDER DENYING IN PART 

DEFENDANTS’ AND 

COUNTERCLAIMANTS’ 

APPLICATION FOR TEMPORARY 

RESTRAINING ORDER; ORDER 

SETTING SCHEDULE FOR SERVICE, 

BRIEFING, AND HEARING OF 

APPLICATION; AND QUESTION TO 

PARTIES 

Re: Dkt. No. 23 

Defendants’ and Counterclaimants’ (collectively, “Defendants”) application for temporary 

restraining order (“TRO”) asserts that Plaintiff will acquire the Tebo/Napa LLC Amended 

Promissory Note dated March 31, 2015 (“the Tebo Note”) on or about March 16-18, 2016. 

Defendants seek two forms of relief in their application for TRO: (1) an injunction against 

Plaintiff’s acquisition of the Tebo Note; and (2) an injunction against Plaintiff’s assisting in any 

foreclosure proceedings involving the Tebo Note. Defendants do not state when foreclosure 

proceedings might occur. 

A. The Court Denies Defendants’ Request for TRO Against Plaintiff’s 

Acquisition of the Tebo Note. 

In order to obtain a TRO, the moving party “must establish that [it is] likely to succeed on 

the merits, that [it is] likely to suffer irreparable harm in the absence of preliminary relief, that the 

balance of equities tips in [its] favor, and that an injunction is in the public interest.” Winter v. 

Natural Resources Defense Council, 555 U.S. 7, 20 (2008) (citations omitted). The Winter court 

also noted that, because injunctive relief is “an extraordinary remedy,” it “may only be awarded 

Case 4:16-cv-01134-JSW Document 24 Filed 03/17/16 Page 1 of 5
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United States District Court 

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upon a clear showing that the [moving party] is entitled to such relief.” Id. at 22 (citing Mazurek 

v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). Thus, “[i]n each case, courts ‘must balance 

the competing claims of injury and must consider the effect on each party of the granting or 

withholding of the requested relief.’” Id. at 24 (citing Amoco Production Co. v. Gambell, 480 

U.S. 531, 542 (1987)). 

In Alliance for the Wild Rockies v. Cottrell, the Ninth Circuit held that the “serious 

questions” sliding scale approach survived Winter. 632 F.3d 1127, 1134-35 (9th Cir. 2011). 

Thus, this Court may grant preliminary injunctive relief if the moving party demonstrates that 

there are serious questions going to the merits and a hardship balance that tips sharply toward the 

moving party, if the other two elements of the Winter test are also met. Id.at 1132. This allows 

the Court “to preserve the status quo where difficult legal questions require more deliberate 

investigation.” See Sencion v. Saxon Mortg. Services, LLC, No. 10-cv-3108 JF, 2011 WL 

1364007, *2 (N.D. Cal. April 11, 2011). 

The Court DENIES Defendants’ request for an TRO against Plaintiff’s March 16-18, 2016 

acquisition of the Tebo Note. The first Winter factor is Defendants’ likelihood of success on the 

merits of their claims. On the present record, Defendants have not adequately demonstrated a 

substantial question on the merits that Plaintiff’s acquisition of the Tebo Note, in and of itself, 

would be in violation of any contractual obligation or duty owed to Defendants. 

The second and third Winter factors are the possibility of irreparable injury to Defendants 

and the balance of the equities. Although Defendants discuss the non-monetary injury that would 

ensue if foreclosure occurs and they lose their interest in a unique business, they do not set forth 

any irreparable injury that would flow only from the transfer of the Tebo Note, absent foreclosure. 

Nor do they dispute Plaintiff’s assertions, made in its own TRO application, that there is a risk of 

foreclosure, in addition to increased interest charges, if Plaintiff does not purchase the Tebo Note, 

tipping the equities against Defendants. 

Finally, with regard to the fourth Winter factor, the public interest does not weigh in favor 

of permitting a party to delay in making an application for TRO and then to seek relief when it is 

too late for the other party to timely oppose the application. Defendants admit that they knew of 

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United States District Court 

Northern District of Californi

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the possibility of Plaintiff acquiring the Tebo Note at least as early as February 19, 2016. (Dkt. 

No. 23-1 ¶ 10.) This action was filed on March 7, 2016. Yet, Defendants filed their counterclaim 

on March 16, 2016 at 4:49 p.m. and their application for TRO on March 16, 2016 at 6:36 p.m. At 

this point, there was a possibility that the March 16-18, 2016 transfer of the Tebo Note could have 

already have taken place. The application is totally devoid of a showing of why Defendants could 

not have filed an action and motion seeking this relief earlier. Indeed, Defendants do not even 

contend that this factor weighs in favor of granting relief; they contend only that it is neutral. 

Accordingly, on the present record, none of the Winter factors weighs in favor of granting 

Defendants’ request for an TRO against Plaintiff’s March 16-18 acquisition of the Tebo Note, and 

that application is denied. 

B. The Court Sets a Schedule for Briefing and Hearing of Defendants’ 

Application for TRO Against Plaintiff’s Foreclosing or Assisting in any 

Foreclosure Proceedings Involving the Tebo Note. 

The analysis of each Winter factor is different, however, with respect to Defendants’ 

request for an injunction against Plaintiff’s foreclosing or assisting in any foreclosure proceedings 

involving the Tebo Note. The Court requires additional briefing to resolve this issue. No party 

has contended that foreclosure will take place before briefing is possible. 

Accordingly, the Court establishes the following schedule for an opposition and reply to be 

filed on shortened time. 

The Court hereby ORDERS that, no later than 5:00 p.m. today, March 17, 2016, 

Defendants must serve a copy of each of the following upon Counter-Defendants Brandon Chaney 

and Anthony Zabit and provide a proof of service to this Court: (1) Defendants’ Counterclaim in 

this action; (2) all moving papers and supporting documents regarding Defendants’ motion for 

TRO and order to show cause regarding a preliminary injunction; (3) this Court’s March 16, 2016 

Order Requiring Proof of Service and Setting Briefing Schedule and Hearing (Dkt. No. 17); and 

(4) this order. If Defendants have previously served any of these documents on Mr. Chaney or 

Mr. Zabit, Defendants need not re-serve those documents, but must file the proof of service with 

this Court. 

Plaintiffs and Counter-Defendants shall file and serve any opposition to Defendant’s 

Case 4:16-cv-01134-JSW Document 24 Filed 03/17/16 Page 3 of 5
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United States District Court 

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motion for TRO against foreclosure proceedings by 2:00 p.m. on March 21, 2016. Defendants 

shall file and serve any reply by no later than 2:00 p.m. on March 22, 2016. The Court shall hold 

a hearing on the motion at 2:00 p.m. on March 23, 2016, in Courtroom 5, 2nd Floor, Federal 

Courthouse, 1301 Clay Street, Oakland, California. If the Court finds the motion suitable for 

disposition without oral argument, it shall notify the parties by order before 10:00 a.m. on March 

23, 2016. 

Service shall be made by use of a valid email address or by other means whereby the paper 

is delivered on the date of service stated in the proof of service. 

C. The Court Sets an Issue for Briefing. 

Under the briefing schedule set forth in this Court’s orders yesterday and today, all parties 

now have an opposition to a motion for TRO due on March 21, 2016 at 2:00 p.m. In addition to 

any other issues the parties may address in those oppositions, the parties shall address whether the 

Court should appoint a temporary receiver to manage the affairs of the subject business during this 

litigation. See Fed. R. Civ. P. 66; Canada Life Assurance Co. v. LaPeter, 563 F.3d 837, 844 (9th 

Cir. 2009). This case appears to present numerous factual disputes; opposing claims of fraudulent 

conduct; and opposing claims that property is in imminent danger of being lost, concealed, 

injured, diminished in value, or squandered. Id. Accordingly, the Court tentatively finds that the 

appointment of a temporary receiver may be appropriate. 

Before filing their opposition papers on March 21, 2016, the parties must meet and confer 

through direct dialogue and discussion to determine whether they can agree in principle to the 

appointment of a temporary receiver. See N.D. Civil L.R. 1-5(n). The parties shall submit 

declarations regarding the progress of these discussions no later than March 21, 2016 at 2:00 p.m. 

If the parties require additional time to engage in such discussions, the parties may submit a 

stipulation and proposed order requesting modification of the schedule set by the Court. 

If the Court appoints a temporary receiver, the Court suggests that the parties either agree 

on an appropriate neutral third party, or agree on a procedure whereby the parties may submit a list 

of names to the Court, from which the Court will choose a receiver. The Court will also seek the 

parties’ input regarding the powers and instructions to be given to the receiver. 

Case 4:16-cv-01134-JSW Document 24 Filed 03/17/16 Page 4 of 5
United States District Court 

Northern District of Californi

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Case 4:16-cv-01134-JSW Document 24 Filed 03/17/16 Page 5 of 5