Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-04160/USCOURTS-azd-2_05-cv-04160-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Injunctive &amp; Declaratory Relief

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Ahwatukee Foothills Prep, Inc., an

Arizona non-profit corporation

Plaintiff, 

vs.

Block Income Fund I, L.P., a Delaware

limited liability corporation; Prom Motor

Hotel, Inc., a Missouri Corporation; and

Chrysler Investors, a Kansas general

partnership 

Defendants. 

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No. CIV-05-4160-PHX-MHM

ORDER

Currently before the Court is Plaintiff's Application for a temporary restraining order,

requesting the Court to order Defendants to make payment of $613,180 to Plaintiff pursuant

to the terms of a lease agreement binding the parties. (Dkt. #2).

I. Legal Standard

To prevail on a motion for a temporary restraining order a party must demonstrate

either (1) a combination of probable success on the merits and the possibility of irreparable

injury or (2) the existence of serious questions going to the merits and that the balance of

hardships tips in its favor. First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1381 (9th

Cir. 1987). These formulations are not two different tests, but a "sliding scale in which the

Case 2:05-cv-04160-MHM Document 10 Filed 12/22/05 Page 1 of 4
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degree of irreparable harm increases as the probability of success on the merits decreases.

MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 516 (9th Cir. 1993).

II. Discussion

Plaintiff asserts the following allegations in support of its Application. Plaintiff

Ahwatukee Foothills is a non-profit Arizona corporation. On June 30, 2004, Plaintiff entered

into a lease agreement (“Lease Agreement”) with Transwestern Phoenix Tech Center, LLC,

the Defendant Landlords’ predecessor-in-interest. (Exhibit A to Lease, Plaintiff’s Compl.

for Preliminary Injunction). The Lease agreement contained a “Purchase Option” by which

Plaintiff was granted the right to purchase the premises, which Plaintiff leased. (Exhibit E,

p. E-7, to Lease). Plaintiff and the Defendants executed this option with a letter on

September 12, 2005. (Exhibit B to Plaintiff’s Complaint for P.I.). The Lease also contained

a “Work Letter,” which granted Plaintiff permission to perform alterations and improvements

to the premises. This was referred to as “Initial Alterations.” (Exhibit D to Lease, Plaintiff’s

Compl for P.I.). Also, under the terms of the “Work Letter” the Landlord agreed to

contribute a “Construction Allowance” toward the cost of performing the “Initial

Alterations.” (Id. at ¶3). The amount of the Construction Allowance was not to exceed

$1,318,000 (Id.). Plaintiff used $704,820 of the Construction Allowance when it was leasing

the premises from the original landlord Transwestern. When Transwestern sold the premises

to the current landlord Defendants, Transwestern allegedly transferred the remaining balance

of $613,180 to the current landlord, the current Defendants. 

Plaintiff now contends that the Defendants are wrongfully withholding the remaining

balance of $613,180 in violation of the Lease Agreement. Specifically, Plaintiffs allege that

the Defendants provided notice though their counsel on December 9, 2005, that because

Plaintiff was in default by not completing the "Initial Alterations" within the specified time

period that Defendants would not pay the remaining balance of the "Construction

Allowance." Plaintiff contends that such conduct is clearly in breach of ¶ 18 of the Lease

Agreement as Plaintiff is entitled to a period to cure before going into default. Moreover,

Plaintiff contends that it was not provided adequate "notice" as defined by the Lease

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Agreement. Lastly, Plaintiff contends that if the Court does not issue the temporary

restraining order it will not be able to finalize and close the Purchase Contract which enables

it to purchase the land.

The Court finds that Plaintiff has presented a basic showing of a serious question

going to the merits of its claims arising out of the terms of the Lease Agreement. However,

Plaintiff cannot make a persuasive showing of the requisite irreparable harm. This is based

upon Plaintiff's request that the Court issue an order requiring Defendants to make payment

of money allegedly due to Plaintiff arising out of the terms of the Lease Agreement. Such

a request is not appropriate for an application for a temporary restraining order. Plaintiff

cites several cases emphasizing that land is unique and is commonly the source of injunctive

relief. See Sportsmen's Wildlife Defense Fund v. U.S. Department of the Interior. 949 F.

Supp. 1510, 1523 (D.Colo. 1996) (preliminary injunction filed by plaintiff to stop

construction of prison on land); Bean v. Independent American Sav. Ass'n, 838 F.2d 729 (5th

Cir. 1988) (plaintiff real estate group granted preliminary injunction to prevent foreclosure

of sale of land); Sundance Land Corp. v. Community First Federal Savings, 840 F.2d 653 (9th

Cir. 1988) (plaintiff seeking to enjoin defendant from foreclosing on the property). 

However, Plaintiff has not cited any authority in which a court has issued a temporary

restraining order requiring a defendant to turn over a large sum of money allegedly owed to

plaintiff arising out of the terms of a lease agreement governing land. Moreover, "courts

generally have been in agreement that it is improper to grant injunctive relief which requires

the payment of monies in advance of the resolution of the underlying controversy on the

merits, which involves the very right to the monies claimed" Chick Smith Ford, Inc., v. Ford

Motor Credit Co., 46 B.R. 515, 517 (Bankr. Fla. 1985); see also Sportsmen's Wildlife

Defense Fund v. U.S. Department of the Interior. 949 F. Supp. 1510, 1523 (D.Colo. 1996)

(holding that preliminary injunctions that are mandatory as opposed to prohibitory are

disfavored and such requests are subject to an even heavier burden requiring the movant to

show the four factors weigh heavily and compellingly in movant's favor before such

injunctive relief is granted). This is exactly the type of relief Plaintiff seeks in the instant

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case. As such, Plaintiff's application for the payment of money allegedly owed to it arising

out of the Lease is premature. 

IT IS THEREFORE ORDERED that Plaintiff's application for a temporary

restraining order is DENIED. (Dkt. #2).

DATED this 22nd day of December, 2005.

Case 2:05-cv-04160-MHM Document 10 Filed 12/22/05 Page 4 of 4