UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
PATRIOT-BSP CITY : CENTER II et al. , : : Plaintiffs, : Civil Action No.: 10-0890 (RMU) : v. : Re Document No.: 1 : U.S. BANK NATIONAL : ASSOCIATION et al. , : : Defendants. : MEMORANDUM OPINION
G RANTING THE P LAINTIFFS ’ M OTION FOR A T EMPORARY R ESTRAINING O RDER I. INTRODUCTION This matter comes before the court on the plaintiffs’ motion for a temporary restraining order. The plaintiffs, a group of commercial re al estate developers, entered into a loan transaction (“the Loan Agreement”) with the de fendants to purchase, renovate and lease out a property in Northeast D.C. The renovation di d not proceed as planne d, and the plaintiffs defaulted on their loan in early 2009. The defendants have now sc heduled a foreclosure sale to occur on June 8, 2010. The plaintiffs have filed suit against the defendant s, along with a motion for a temporary restraining order (“TRO”) to enjo in the foreclosure sale. Upon consideration of the parties’ expedited submissions on the TRO motion, the court conclude s that the plaintiffs have demonstrated their entitlement to temporary injunctive relief. Accordingly, the court grants the plaintiffs’ motion.2 II. FACTUAL & PROCEDURAL BACKGROUND On January 9, 2008, the plaintiffs entered into the Loan Agreement with defendant U.S. Bank National Association (“U.S. Bank” or “the bank”), pursuant to which the bank agreed to lend the plaintiffs approximately $66 million to purchase and renovate the Hecht Company Warehouse, an art deco “Streamline Moderne” styl e building listed on the National Register of Historic Places. Am. Compl. ¶ 15-17. The plaintiffs planned to eventually lease or sell the property to third parties. Id. The Loan Agreement required the plaintiffs to pay interest on the outstanding balance of the loan on a monthly basis, and to repay th e principal amount of the loan on January 10, 2011. Id. ¶¶ 18-19. The Loan Agreement also included a “Leasing Hurdle” provision requiring the plaintiffs to lease out at least thirty pe rcent of the property by April 10, 2009. 1 Id. , Ex. A (“Loan Agreement”) ¶ 5.2. The plain tiffs failed to meet the Leasing Hurdle deadline; indeed, none of the space has been leased out to date. Pls.’ Mot. at 6. The plaintiffs have also failed to pay property taxes, utility ex penses, interest payments and construction fees. Id. ; Defs.’ Opp’n at 11. As a result, a mechanic’s lien and water and sewage authority liens have been placed on the property. Id

. On October 21, 2009, U.S. Bank delivered a lett er to the plaintiffs alleging that the plaintiffs had defaulted on their loan payments and demanding that the plaintiffs cure their default. Pls.’ Mot. at 6; Defs .’ Opp’n at 9-10. The plaintiffs failed to cure the default, and on April 23, 2010, the bank filed suit to compel the plaintiffs to satisfy th eir obligations under the Loan Agreement. Pls.’ Mot. at 10; Defs.’ Opp. at 11-12. On April 30, 2010, the bank commenced a second lawsuit for breach of the Loan Agreement. Id . On or about May 5, 2010,

1 The plaintiffs state that the Leasing Hurdle deadlin e was April 9, 2009 rather than April 10, 2009. Compl. ¶ 36. For the purposes of the instant moti on, this factual discrepancy is immaterial.3 the bank notified the plaintiffs that it intended to hold a foreclosure sale on the property on June 8, 2010 at 12:30 p.m. Defs.’ Opp’ n at 12; Pls.’ Mot. at 11. The plaintiffs commenced this lawsuit on May 24, 2010 in the Supe rior Court of the District of Columbia. See generally Compl. Along with the compla int, the plaintiffs filed a motion for a TRO to enjoin the defendants fr om proceeding with the foreclosure sale. See generally Pls.’ Mot. The defendants removed the action to this court on May 28, 2010, see Notice of Removal, and the plaintiffs filed an amended complaint on June 2, 2010, see generally Am. Compl. The defendants filed their opposit ion to the plaintiffs’ TRO motion on June 1, 2010, see generally Defs.’ Opp’n, and the plainti ffs filed a reply on June 2, 2010, see generally Pls.’ Reply. With the motion now ripe for adjudi cation, the court turns to the legal standard and the parties’ arguments.

III. ANALYSIS A. Legal Standard for Injunctive Relief This court may issue interim injunctive reli ef only when the movant demonstrates “[1] that he is likely to succeed on the merits, [2] th at he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Winter v. Natural Res. Def. Council, Inc. , 129 S. Ct. 365, 374 (2008) (citing Munaf v. Geren , 128 S. Ct. 2207, 2218-19 (2008)). It is particularly important for the movant to demonstrate a likelihood of success on the merits. Cf

. Benten v. Kessler , 505 U.S. 1084, 1085 (1992) (per curiam). Indeed, abse nt a “substantial indica tion” of likely success on the merits, “there would be no justification for the court’s intrusion into the ordinary4 processes of administration and judicial review.” Am. Bankers Ass’n v. Nat’l Credit Union Admin. , 38 F. Supp. 2d 114, 140 (D.D.C. 1999) (internal quotation omitted). The other critical factor in the injunctive re lief analysis is irrepara ble injury. A movant must “demonstrate that irreparable injury is likely in the absence of an injunction.” Winter , 129 S. Ct. at 375 (citing Los Angeles v. Lyons , 461 U.S. 95, 103 (1983)). Indeed, if a party fails to make a sufficient showing of irreparable injury, the court ma y deny the motion for injunctive relief without consideri ng the other factors. CityFed Fin. Corp. v. Office of Thrift Supervision , 58 F.3d 738, 747 (D.C. Cir. 1986). Provided the plaintiff demons trates a likelihood of success on the merits and of irreparable injury, the cour t “must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief.” Amoco Prod. Co. v. Gambell , 480 U.S. 531, 542 (1987). Finally, “courts of equity should pay particular regard for the public consequen ces in employing the ex traordinary remedy of injunction.” Weinberger v. Romero-Barcelo , 456 U.S. 305, 312 (1982). As an extraordinary remedy, courts should grant such relief sparingly. Mazurek v. Armstrong , 520 U.S. 968, 972 (1997). The Supreme C ourt has observed “that a preliminary injunction is an extraordinary and drastic reme dy, one that should not be granted unless the
movant, by a clear showing , carries the burden of persuasion.” Id. Therefore, although the trial court has the discretion to issue or deny a preliminary injunction, it is not a form of relief granted lightly. In addition, any injunction that the court issues must be carefully circumscribed and “tailored to remedy the harm shown.” Nat’l Treasury Employees Union v. Yeutter , 918 F.2d 968, 977 (D.C. Cir. 1990).5 B. The Court Grants the Plaintiffs’ Motion for a TRO 1. Without Temporary Injunctive Relief the Plaintiffs Face Irreparable Harm The plaintiffs assert that because parcel s of land are inherently unique, monetary damages will be inadequate to redress their injury if they lose possession of the property. Pls.’ Mot. at 15

. Additionally, the plaintiffs claim that loss of the propert y will prevent the court from rendering a meaningful decision on the merits of the case. Id. The defendants respond that any harm to the plaintiffs can be redressed with monetary damages. Defs.’ Opp’n at 13-15. Indeed, the defendants assert, the foreclosure sale will be nefit the plaintiffs because it will mitigate the plaintiffs’ damages, if any, by preventing the prop erty from falling further into disrepair. Id . at 15. In their reply, the plaintiffs a dd that the property at issue in this case is particularly “unique and historically significant,” as indicated by its recognition on the National Register of Historic Places. Pls.’ Reply at 6-7. In determining whether a party has demonstrat ed that it will suffer irreparable harm, the court must consider two central elements. Monument Realty LLC v. Wash. Metro. Area Transit Auth. , 540 F. Supp. 2d 66, 74 (D.D.C. 2008). First, the harm must be “certain and great, actual and not theoretical.” Id. (citing Wis. Gas Co. v. Fed. Energy Reg. Comm’n, 758 F.2d 669, 674 (D.C. Cir. 1985)). In other words, the moving pa rty must establish that the harm is “of such imminence that there is a ‘clear and present’ n eed for equitable relief to prevent irreparable harm.” Ashland Oil, Inc. v. Fed. Trade Comm’n , 409 F. Supp. 297, 307 (D.D.C. 1976), aff’d , 548 F.2d 977 (D.C. Cir. 1976) (citations and intern al quotations omitted). Second, to establish that the harm is irreparable, there must be no other adequate legal remedies available. Monument Realty , 540 F. Supp. at 74 (citing Wis. Gas Co. , 758 F.2d at 774). The possibility that the court could provide compensatory relief to redress a party’s injury “w eighs heavily against a claim of6 irreparable harm.” Id. When assessing these factors, the court must consider whether the moving party has shown that irreparabl e harm is “likely” to occur. Id. at 74-75. With regard to the first element, the forecl osure sale of the property is scheduled for a date certain: Tuesday, June 8, 2010. See Pls.’ Mot. at 14. The forecl osure sale will result in the plaintiffs losing possession of the property. Id . The plaintiffs also represent that another potential purchaser has tendered a binding offer to purchase the property for an amount in excess of the principal balance of the loan. See Pls.’ Reply at 7-8. In light of these circumstances, the court concludes that the plaintiffs have demonstr ated a substantial likelih ood that they will face actual and imminent harm if the court doe s not enjoin the foreclosure sale. See Five Star Dev. Resort Communities, LLC v. iStar RC Paradise Valley LLC , 2010 WL 1005169, at *3 (S.D.N.Y. Mar. 18, 2010) (observing that “[t]he ability of a creditor to foreclose can suffice to establish irreparable harm” and noting that the plaintiff ha d proffered that it would face financial ruin absent injunctive relief) (citing Tucker Anthony Realty Corp. v. Schlesinger, 888 F.2d 969, 975 (2d Cir. 1989)); cf. Sun Vill. Farms v. Bowery Sav. Bank , 735 F. Supp. 945, 948-49 (D. Ariz. 1990) (holding that if the court were to deny the plaintiff’s request for injunctive relief preventing a foreclosure sale, “the property would be listed for sale in foreclosure proceedings . . . [and the plaintiff’s] interest would be completely lost”). Turning to the second element, the plain tiffs rightfully high light cases dealing specifically with injunctive relief in the c ontext of the loss of land and real property. See generally Pls.’ Mot.; Pls.’ Reply. Courts in this Ci rcuit have broadly held that “[w]hen land is the subject matter of the agreement, the legal re medy is assumed to be inadequate, since each parcel of land is unique.” Monument Realty , 540 F. Supp. 2d at 75 (quoting Tauber v. Quan , 938 A.2d 724, 732 (D.C. 2007)); see also Peterson v. D.C. Lottery & Charitable Control Bd. , 19947 WL 413357, at *4 (D.D.C. July 28, 1994) (stating that “[i]t is settled beyo nd the need for citation . . . that a given piece of property is considered to be unique, and its loss is always an irreparable injury” (quoting United Church of the Med. Ctr. v. Med. Ctr. Comm’n , 689 F.2d 693, 701 (7th Cir. 1982))). Further, the property at issue is especially unique given its placement on the National Register of Historic Places. Pls.’ Reply at 6-7; cf. Monument Realty , 540 F. Supp. 2d at 76 (concluding that because the prop erty at issue was “valued for its uniqueness,” the harm could not be remedied with monetary damages alone) . Accordingly, the cour t concludes that the plaintiffs have established that there is a hi gh likelihood that they will suffer actual, imminent and irreparable harm if the foreclosure sale is not enjoined. 2. The Plaintiffs Have Established a Su fficient Probability of Success on the Merits Next, the court must assess the plaintiffs’ likelihood of success on the merits of their breach of contract claim. See Winter , 129 S. Ct. at 374. Because the plaintiffs have established a high likelihood of irrepara ble injury absent the issuance of a TRO, they need not establish a particularly high likelihood of success on the merits to be entitled to injunctive relief. See Cuomo v. U.S. Nuclear Regulatory Comm’n, 772 F.2d 972, 974 (D.C. Cir.1985) (stating that “[i]njunctive relief may be granted with either a high likelihood of succe ss and some injury, or vice versa”). Rather, the plain tiffs need only “raise[] questions going to the merits so serious, substantial, difficult and doubtful, as to make them a fair ground for litiga tion and thus for more deliberative investigation.” Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc. , 559 F.2d 841, 844 (D.C. Cir. 1977). The plaintiffs claim that the defendants breached the Loan Agreement by failing to disburse funds that they were required to disburse under the ag reement. Am. Compl. ¶¶ 58-63. By way of background, in November 2008, the plai ntiffs entered into a contract with a8 construction company that agreed to perform certain construction work on the property for approximately $3 million. Pls.’ Mot. at 4. The defendants approved the construction contract. Id. From December 2008 through February 2009, the plaintiffs submitted three draw requests (referred to as Draw Request Nos. 8 through 10) to the defendants, and the defendants in turn funded those payments in full. Id. at 5. In March 2009, the plaintiffs submitted Draw Request No. 11 to the defendants, and although the de fendants initially approved the request, the defendants ultimately refused to fund the request or any further payment requests relating to the construction contract. Id. As a result, the plaintiffs argue, the plaintiffs failed to satisfy the Leasing Hurdle provision by the April 2009 deadline. Id. at 5-6. The plaintiffs claim that the defendants’ fa ilure to fund Draw Request No. 11 constituted a breach of the Loan Agreement. Am. Compl. ¶ 60. The defendants, however, respond that they were not obligated to fund that request. Defs.’ Opp’n at 17. Mo re specifically, the defendants assert that their obligation to ma ke a disbursement only arose if the plaintiffs satisfied several conditions precedent set forth in the Loan Agreem ent, one of which was that the loan be “in balance” as of the disbursement date. Id. The defendants contend that the loan was not “in balance” when the plaintiffs submitted Draw Request No. 11 because the Operating Expense Reserve was under-funded; therefore, the defendants argue, they were not obligated to make the disbursement related to that request. Id. at 17-18. The plaintiffs disagree. They argue that “for purposes of determ ining whether the Loan [was] in Balance, the Loan Agreement re quire[d] the various Reserves to be aggregated .” Pls.’ Reply at 11. The plaintiffs concede that th e Operating Expense Reserve was under-funded, but assert that the Interest Reserve was over-funded, and that the two Reserves, in the aggregate, were over-funded. Id. Therefore, the plaintiffs maintain, the loan was “in balance” when Draw9 Request No. 11 was submitted. Id. In other words, the plaintiffs argue that they satisfied all of the conditions precedent to the defendants’ obligation to disburse the funds. Id. By not complying with their obligati on, the plaintiffs assert, the defendants breached the Loan Agreement. Id. Upon review of the parties’ arguments, as well as the Loan Agreement and the other materials submitted for the court’s consideration, the court concludes that the plaintiffs appear to have the better of this argument. The Loan Agreem ent states that “the Loan is in Balance if all remaining unpaid costs of the Property, as determined by the Agent, including the Reserves , do not exceed the amount of the Loan proceeds not ye t advanced by the Lenders.” Loan Agreement § 3.2 (emphasis added). Thus, the Loan Agreement indicates that a determination as to whether the fund is “in balance” incorporates th e amounts contained in “the Reserves,” i.e. , both the Operating Expense Reserve and the Interest Reserv e. The defendants maintain that they were under no obligation to fund Draw Request No. 11 b ecause there was a “line item out of balance situation” for the Operating Expense Reserve. Defs.’ Opp’n at 17-18; see also Defs.’ Opp’n, Ex. 1 ¶¶ 15-16. Yet because the defendants considered the status of only the Operating Expense Reserve rather than the status of the two Reserves in the aggregate, it appears that the defendants erroneously concluded that that th e loan was not “in balance” and, in turn, that the plaintiffs had failed to satisfy the condition precedent to the de fendants’ obligation to fund Draw Request No. 11. In sum, because the plaintiffs have raised a substantial question as to whether they did, in fact, satisfy the conditions precedent to the de fendants’ obligation to fund the request, the plaintiffs have established, to th e requisite degree, the prospect of succeeding on the merits of the breach of contract claim arising from that request. 2

2 As a result, the court need not address the prospect of the plaintiffs’ success on the merits of their remaining claims.10 3. The Balance of the Equities Favors the Plaintiffs The court must next balance the injury that the defendants will face if the court issues a TRO against the injury that the plaintiffs will face absent a TRO. See Amoco Prod. Co. , 480 U.S. at 542. The plaintiffs assert that the bala nce of the equities favors them because they stand to lose their property if the for eclosure sale goes forward. Pls.’ Mot. at 15. The defendants, on the other hand, argue that they will be harmed if the court issues a TRO because delaying the foreclosure sale will cause the pr operty to fall even further in to disrepair, diminishing the property’s value. See Defs.’ Opp’n at 35-38. The defendants al so contend that the plaintiffs will face no injury absent a TRO, see id. at 38, an argument foreclosed by the court’s analysis of the irreparable injury prong, see Part III.B.1 supra . On balance, the court concludes that the irrepa rable harm that the plaintiffs will incur if the foreclosure sale goes forward as planned, see id. , outweighs any harm that issuing the TRO will cause to the defendants. Therefore, this factor favors the plaintiffs. 4. The Public Interest Consid erations Favor Neither Party The final prong of the injunctive relief analysis requires the court to consider the public interest consequences, if any, of issuing the TRO. See Weinberger , 456 U.S. at 312. Although each party asserts that the public interest favors its position, see Pls.’ Mot. at 15-16; Defs.’ Opp’n at 38-39, the court concludes that this factor stands in equipoise. In any event, given that the two principal factors in the analysis, as well as the balance of the equities, favor the plaintiffs, the plaintiffs have amply demonstrated that they are entitled to a TRO. C. The Court Grants the Defendants’ Reque st for a Bond Pursuant to Rule 65(c)

The defendants request that th e court order the plaintiffs to post a bond in the amount of “the difference between the amount owed and th e current value of the Warehouse Property.”11 Defs.’ Opp’n at 39. The de fendants offer, under seal, 3 an appraisal indicating that the amount that the plaintiffs owe pursuant to the Loan Ag reement significantly exceeds the market value of the property in its current condition. See id. The plaintiffs do not a ddress the defendants’ request for a bond. See generally Pls.’ Reply. Federal Rule of Civil Procedure 65(c) author izes the court to issue a TRO “only if the movant gives security in an am ount that the court considers prope r to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” F ED
. R. C IV
. P. 65(c). Because the plaintiffs fail to address th e defendants’ request for a bond in their reply, the court treats this request as conceded. See, e.g. , Buggs v. Powell , 293 F. Supp. 2d 135, 141 (D.D.C. 2003). Further, although the plaintiffs vigorously contes t the reliability of the property appraisal offered by the defendants, see Pls.’ Reply at 20-23, the court notes that the plaintiffs have failed to offer their own appraisal of the property’s current value, see generally id. Instead, the plaintiffs offer a declaration from plaintiffs’ counsel stating that a th ird-party purchaser has offered to acquire the property. Id. , Ex. D ¶ 14. The plaintiffs do not specify the amount offered by the third-party purchaser, stating only that it is “more than 2.3 times the ‘appraised value’ of the Property listed on the [d efendants’] appraisal.” Id. ¶ 15. Therefore, the court grants the defendants’ request for a bond in the amount re presenting the difference between the amount owed by the plaintiffs and the current value of the Warehouse Property, as represented in the defendants’ appraisal.

3 The court granted the defendants’ consent motion to file the appraisal under seal based on the defendants’ representation that the public disclosur e of the appraisal could interfere with the integrity of the foreclosure sale. See Minute Order (June 2, 2010).12 IV. CONCLUSION For the foregoing reasons, the court gran ts the plaintiffs’ motion for a temporary restraining order. An Order consistent with this Memorandum Opinion is separately and contemporaneously issued this 7th day of June, 2010.

RICARDO M. URBINA United States District Judge