UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

L.A. INSURANCE AGENCY 

FRANCHISING, LLC, 

 

Plaintiff, Civil Action No. 14-14432 

 Magistrate Judge David R. Grand 

v. 

 

CLAUDIA MONTES, et al., 

 

 Defendants. 

________________________________________/ 

OPINION AND ORDER DENYING PLAINTIFF’S EMERGENCY 

MOTION FOR PARTIAL RECONSIDERATION [63] 

 Before the Court is plaintiff L.A. Insurance Agency Franchising, LLC’s (“L.A. 

Insurance” or the “company”) emergency motion for partial reconsideration of this Court’s 

September 30, 2015 opinion and order on the parties’ cross motions for injunctive relief [61] (the 

“Opinion”). [63]. Under E.D. Mich. LR 7.1(h)(3), a motion for reconsideration should not be 

granted unless the movant demonstrates a “palpable defect by which the Court and the parties ... 

have been misled,” and that “correcting the defect will result in a different disposition of the 

case.” For the following reasons, the Court will deny L.A. Insurance’s motion. 

 In its Opinion, the Court discussed the general nature of this franchise dispute between 

the franchisor, plaintiff L.A. Insurance, and its franchisees, defendants L.A. Insurance Agency 

NV 12, LLC, L.A. Insurance Agency NV 15, LLC, L.A. Insurance Agency NV 17, L.A. 

Insurance Agency NV 26, LLC (and their principal, defendant Claudia Montes) (collectively, 

“defendants”), which the Court incorporates by reference herein. [61 at 2-3]. What the Court 

perhaps should have been more explicit about is the parties’ difference of opinion over the origin

of the overall franchise dispute. 

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 In its initial complaint, L.A. Insurance seems to contend that the parties’ dispute began 

when, on “August 30, 2014, Defendant Montes, without [L.A. Insurance’s] authorization, closed 

her L.A. Insurance franchise at 1291 S. Decatur Blvd. in Las Vegas and, without notice to or 

authorization from Plaintiff, opened a new insurance agency located at 4601 W. Sahara Ave. in 

Las Vegas using Plaintiff’s L.A. Insurance trademark to promote the business and Plaintiff’s 

franchise operating system to operate the business.” [1 at ¶19]. According to defendants, 

however, the parties’ dispute originated even earlier. In an affidavit supplied to the Court, 

Montes averred that: (1) she “received no support from [L.A. Insurance]” while a franchisee; (2) 

L.A. Insurance surreptitiously opened a competing insurance office less than one mile from one 

of Montes’s L.A. Insurance franchise locations, and then “opened [competing] ‘Toro Insurance 

Offices’ all over town; (3) L.A. Insurance cut off her access to top-tier insurance providers and 

vendors; (4) L.A. Insurance gave her access “only to those insurance companies willing to give 

[L.A. Insurance] kickbacks; (5) L.A. Insurance “show[ed] favoritism to [certain franchisees], 

allowing [them] to open a company under a different DBA so they can sell products that 

[defendants] couldn’t access”; (6) L.A. Insurance forged Montes’s signature on certain franchiserelated documents; and (7) L.A. Insurance “instructed insurance providers and vendors to lower 

[defendants’] commissions and stop dealing with [defendants]...” [17-3]. Thus, in their 

countercomplaint, defendants bring claims against L.A. Insurance for: (1) Breach of the 

Covenant of Good Faith and Fair Dealing; and (2) Deceptive Trade Practices under Nevada 

Revised Statute 598.0915. [22]. Indeed, L.A. Insurance attached as an exhibit to its instant 

motion an e-mail from defendants’ counsel in which he indicates defendants’ position that it was 

L.A. Insurance who first acted wrongfully with respect to the parties’ franchisor-franchisee 

relationship: 

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In fact, this whole dispute began when Toro Insurance (owned and 

operated by your client) opened up on Charleston Blvd, directly across the 

street from NV26’s original location (which was at the corner of Charleston 

and Decatur). The precipitous decline in business that resulted, caused 

Montes to close the franchised location at Charleston and Decatur. 

[63-1]. 

 Notably, while L.A. Insurance’s injunctive relief motion papers discussed its version of 

the material facts underlying this dispute, LA. Insurance completely failed to address defendants’ 

allegations that its conduct was the cause of the parties’ dispute, and provides defendants with a 

valid defense to its claims.1 

Because defendants’ allegations at least plausibly state defenses to L.A. Insurance’s 

claims, in order for L.A. Insurance to obtain an injunction requiring defendants to cease 

operating their businesses in their current locations, L.A. Insurance must establish a strong 

likelihood of prevailing not only on its own causes of action, but also on defendants’ 

counterclaims. See Mersino Mgmt. Co. v. Sebelius, No. 13-11296, 2013 U.S. Dist. LEXIS 

96588, at *16 n.6. (E.D. Mich. Jul. 11, 2013) (noting that “[t]he Sixth Circuit . . . requires [] a 

clear showing of a likelihood of success on the merits and considers that factor to be nearly 

dispositive.”) Since L.A. Insurance’s motion for preliminary injunction and motion for 

 

1

 While defendants should have addressed these matters in their responses to L.A. Insurance’s 

injunctive relief motions, this does not absolve L.A. Insurance from ignoring, in its motion 

papers, these serious potential impediments to the extraordinary injunctive relief it sought. In 

fact, when this action was assigned to District Judge Matthew Leitman, he denied L.A. 

Insurance’s motion for default judgment, explaining that, “the facts in Montes’ affidavit could be 

sufficient to support a determination that the relevant franchise agreement between the parties is 

unenforceable, that L.A. Insurance committed the first material breach of the parties’ contract, 

that L.A. Insurance prevented Defendants from performing under parties’ contract, and that L.A. 

Insurance acted with unclean hands rendering unavailable the equitable relief L.A. Insurance 

seeks. At this stage, the facts in Montes’ affidavit are sufficient to state plausible meritorious 

defenses.” [21 at 3-4] (internal citations omitted). 

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temporary restraining order do not even acknowledge, much less address the merits of 

defendants’ allegations and counterclaims, it has not made the required showing. 

 For the reasons stated above, even if the Court were to find that L.A. Insurance identified 

“palpable defects” in the Court’s Opinion, it has failed to show that correcting them “will result 

in a different disposition of the case” because the Court will not entertain granting the type of 

extraordinary relief requested by L.A. Insurance without it first making a clear showing that it is 

likely to succeed on the merits in this litigation. Having failed to make that showing, IT IS 

ORDERED that plaintiff’s emergency motion for partial consideration [63] is DENIED. 

Dated: October 7, 2015 s/David R. Grand 

Ann Arbor, Michigan DAVID R. GRAND 

 United States Magistrate Judge 

CERTIFICATE OF SERVICE

 The undersigned certifies that the foregoing document was served upon counsel of record 

and any unrepresented parties via the Court’s ECF System to their respective email or First Class 

U.S. mail addresses disclosed on the Notice of Electronic Filing on October 7, 2015. 

 s/Eddrey O. Butts 

 EDDREY O. BUTTS 

 Case Manager

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