Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_16-cv-01134/USCOURTS-cand-4_16-cv-01134-3/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

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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 GRANTING IN PART AND 

DENYING IN PART CROSS-MOTIONS 

FOR TEMPORARY RESTRAINING 

ORDER; AND SETTING SCHEDULE 

Re: Dkt. Nos. 6, 23 

Pending are cross motions for temporary restraining order (“TRO”). The parties also each 

request an order to show cause why a preliminary injunction should not issue. The Court has 

considered the parties’ papers, oral argument, relevant legal authority, and the record in this case, 

and for the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART both 

motions for TRO, and issues further scheduling orders as set forth herein. 

I. THE PARTIES’ CROSS-MOTIONS FOR TRO ARE GRANTED IN PART AND 

DENIED IN PART. 

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 

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 

Case 4:16-cv-01134-JSW Document 40 Filed 03/23/16 Page 1 of 6
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United States District Court 

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

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

questions” sliding scale approach survives 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). 

Additionally, a party that seeks a mandatory injunction must demonstrate that the law and 

the facts clearly favor the moving party. Garcia v. Google, Inc., 786 F.3d 733, 740 (9th Cir. 

2015). A mandatory injunction goes beyond an order to maintain the status quo, and is an order 

for a responsible party to take action. Id. The Court will not issue a mandatory injunction in a 

doubtful case. Id. 

For the reasons set forth on the record during the hearing on March 23, 2016, the Court 

GRANTS IN PART AND DENIES IN PART each party’s motion for a TRO. 

The Court DENIES both parties’ requests to obtain any relief on an ex parte basis. In any 

case, all requests for ex parte relief are moot, because all papers have now been served on all 

parties. No further applications for ex parte relief should be filed without a showing of very good 

cause and strict compliance with this Court’s Civil Local Rule 7-10. 

Defendants’ motion for TRO is GRANTED IN PART. Plaintiff and its agents, officers, 

members, sub-members, co-members, partners, associates, employees, representatives, affiliates, 

subsidiaries, attorneys, and all persons acting in concert or participating with them, are HEREBY 

ENJOINED from foreclosing or assisting in any manner with judicial or non-judicial foreclosure 

proceedings relating to the Amended Promissory Note in favor of TEBO/NAPA LLC dated March 

31, 2015 (the “Amended Tebo Note”), pending further order of this Court. The Court finds that 

Defendants have shown a substantial question on the merits relating to the contractual provisions 

governing such an action; that Defendants will be irreparably injured if their interest in the unique 

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United States District Court 

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subject property is permanently lost through foreclosure; that the balance of hardships tips sharply 

in Defendants’ favor with respect to the harm they would suffer upon foreclosure; and that public 

policy interests favor this injunction. 

Except as expressly set forth in this order, the remaining relief requested in Defendants’ 

motion for TRO is DENIED, for the reasons set forth in this Court’s March 17, 2016 order. 

Plaintiff’s motion for TRO is GRANTED IN PART, as follows. 

No later than Friday, March 25, 2016 at 4:00 p.m., Defendants shall provide a letter of 

authority to Paychex, or any other pertinent accountants or payroll services, to give Plaintiff and 

Counter-Defendants full access as administrators to all payroll functions in connection with 

Fairwinds Estate Winery, LLC, including access to and passwords for all online payroll services, 

including but not limited to the online portal, reporting engine, payroll tax reports, and W-2s. 

No later than Friday, March 25, 2016 at 4:00 p.m., Plaintiffs and Defendants shall 

exchange copies of all accounting and financial information, bank statements, invoices, checks, 

company books, and other company records, both hard copy and electronic, relating to the 

management and accounting of Fairwinds Estate Winery, LLC. This exchange of accelerated 

discovery shall provide the transparency both parties seek; further both parties’ interest in 

complying with payroll, taxation, and reporting requirements; and provide information necessary 

for a successful mediation. The parties shall engage in meaningful meet and confer discussions 

regarding the information that shall be exchanged and shall broadly provide copies of all relevant 

information. If the parties dispute the scope of information that must be provided, the parties may 

seek an expedited hearing from the Court by joint letter brief, as set forth in this Court’s Civil 

Standing Orders. As explained at the hearing, however, the scope of this disclosure is intended to 

be broad. Further, this disclosure shall be supplemented upon request of either party on an 

ongoing basis. 

No later than Tuesday, March 29, 2016, the parties shall meet and confer and submit a 

stipulation and proposed order detailing a plan for transferring all Fairwinds Estate Winery, LLC 

contracts, government approvals, bonds, permits, and other property that is presently in the name 

of any Plaintiff or Defendant into the name of Fairwinds Estate Winery, LLC. The proposed order 

Case 4:16-cv-01134-JSW Document 40 Filed 03/23/16 Page 3 of 6
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may be accompanied by a short joint pleading specifically identifying any remaining areas of 

disagreement regarding this topic. 

Defendants shall cease to instruct employees or other individuals not to cooperate with 

Plaintiff and Counter-Defendants as managers of Fairwinds Estate Winery, LLC. 

Except as set forth above, Plaintiff’s request for TRO is DENIED. 

Further, the Court DENIES the parties’ respective requests that the other party post a bond 

pursuant to Federal Rule of Civil Procedure 65(c). No party has demonstrated that there is a bond 

amount that the other side is able to pay that could properly provide compensation for costs and 

damages sustained by any party found to have been wrongfully enjoined or restrained. Moreover, 

the Court finds that under the circumstances, the subject property itself provides adequate security. 

II. SCHEDULE FOR BRIEFING OF MOTIONS FOR PRELIMINARY INJUNCTION. 

For the reasons set forth on the record, the Court ORDERS the parties to comply with the 

following schedule for briefing of any motion for preliminary injunction. 

Thursday, March 24, 2016, 4:00 p.m. The parties shall inform the Court whether they 

stipulate to this order becoming the preliminary injunction in this case, or whether they will brief 

either or both of their motions for preliminary injunction. 

Tuesday, March 29, 2016. Plaintiff’s motion for preliminary injunction is due. The 

motion shall focus on relief that Plaintiff seeks that differs from the relief set forth in this order. 

The motion must support each specific request set forth in the proposed order. 

Friday, April 1, 2016. Defendant’s response to Plaintiff’s motion for preliminary 

injunction and any cross-motion is due. The opposition and any cross-motion shall be contained 

in a single brief. The opposition shall address the specific requests made in Plaintiff’s motion. 

Any cross-motion must focus on relief that Defendant seeks that differs from the relief set forth in 

this order, and must support each specific request set forth in the proposed order. 

Tuesday, April 5, 2016. Plaintiff’s reply in support of Plaintiff’s motion for preliminary 

injunction and response to any cross-motion is due. 

Friday, April 8, 2016. Defendant’s reply in support of any cross-motion is due. 

Case 4:16-cv-01134-JSW Document 40 Filed 03/23/16 Page 4 of 6
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III. OTHER SCHEDULING ORDERS. 

The parties are ordered to participate in mediation, to be completed by April 15, 2016. 

Each party shall attend the mediation session in person, with each lead client representative, lead 

counsel, and each side’s person who is the most knowledgeable regarding the disputed accounting 

issues. 

The parties shall meet and confer regarding whether they can agree to a private mediator, 

who can complete the mediation by April 15, 2016. The parties shall submit the name of the 

private mediator to the Court or shall submit a brief joint pleading stating that they have not 

agreed to a private mediator by Friday, March 25, 2016, at 2:00 p.m. If the parties cannot agree 

to a private mediator by Friday, March 25, 2016 at 2:00 p.m., the Court will order mediation by a 

court-appointed panel mediator. 

By Friday, March 25, 2016 at 4:00 p.m., Plaintiff shall submit a motion to strike or a 

motion to seal all documents currently locked on the Court’s docket. See N.D. Cal. Civil L.R. 

79-5. The motion shall take the form of a stipulation and proposed order, or shall be accompanied 

by a declaration stating why a stipulation could not be obtained. 

By Wednesday, March 30, 2016, Plaintiff shall file a brief regarding whether the Court 

should appoint a receiver or a special master in the event that mediation is not successful. 

Defendant may file a response by Monday, April 4, 2016. No reply shall be filed. 

For the reasons stated on the record, if mediation is not successful, the parties must meet 

and confer regarding the appointment of a receiver or a special master, depending on the Court’s 

order following the briefing in the previous paragraph. In this event, by April 15, 2016, the 

parties must submit either the stipulated name of an individual to act as receiver or special master 

(depending on the Court’s order), or a stipulated short list of not more than 5 names from which 

the Court can select the individual. Also by April 15, 2016, the parties shall submit a joint 

proposal detailing the stipulated responsibilities, duties, and powers of the receiver or special 

master, and specifically identifying any areas of disagreement. The compensation and expenses of 

the receiver or special master shall be paid as set forth on the record of the March 23, 2016 

hearing. 

Case 4:16-cv-01134-JSW Document 40 Filed 03/23/16 Page 5 of 6
United States District Court 

Northern District of Californi

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Da

All othe

IT IS S

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23, 2016 

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