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Fleetwash, Inc. v. Hall

United States District Court, D. Nevada

May 18, 2017

FLEETWASH, INC., a foreign corporation, Plaintiff,
v.
MATTHEW HALL, an individual; MOBILE TRUCK WASH, LLC, a domestic limited liability company; and DOES I-X and ROE CORPORATIONS I-V, inclusive, Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

          MIRANDA M. DU UNITED STATES DISTRICT JUDGE.

         I. BACKGROUND

         On March 20, 2017, Plaintiff Fleetwash, Inc. filed a Motion for a Temporary Restraining Order (ECF No. 4) and Motion for a Preliminary Injunction (ECF No. 5). Defendants Matthew Hall (“Hall”) and Mobile Truck Wash, LLC (“MTW”) filed an Opposition on April 3, 2017 (ECF No. 13), and Plaintiff filed a Reply on April 10, 2017 (ECF No. 14). The Court conducted a hearing on May 3, 2017 and May 4, 2017 in which witness testimony and exhibits were admitted into evidence. The Court granted Plaintiff's motions and directed Plaintiff to submit a proposed order.

         II. LEGAL STANDARD

         Injunctive relief is a matter of discretion and an extraordinary remedy to be issued if a plaintiff establishes: (1) likelihood of success on the merits; (2) likelihood of irreparable harm in the absence of preliminary relief; (3) that the balance of hardships tips in his favor; and (4) that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008). The Ninth Circuit utilizes a sliding scale approach in that “‘serious questions going to the merits' and a hardship balance that tips sharply toward the plaintiff can support issuance of an injunction, assuming the other two elements of the Winter test are also met.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134-1135 (9th Cir. 2011). A plaintiff is not required to demonstrate a certainty of success, but rather only a “fair chance of success, ” in order to obtain preliminary injunctive relief.

         III. FINDINGS AND CONCLUSIONS

         The Court, having duly considered Plaintiff's Complaint, emergency motions, and the evidence presented by the parties, hereby makes the following findings and conclusions.

         1. Plaintiff is likely to succeed on the merits of its intentional interference with contractual relations and intentional interference with prospective economic advantage claims.

         2. In an action for intentional interference with contractual relations, a plaintiff must establish: (1) a valid and existing contract; (2) the defendant's knowledge of the contract; (3) intentional acts intended or designed to disrupt the contractual relationship; (4) actual disruption of the contract; and (5) resulting damage. J.J. Indus., LLC v. Bennett, 71 P.3d 1264, 1267 (Nev. 2003). This claim requires proof of intentional acts by a defendant intended or designed to disrupt a plaintiff's contractual relations. Id. at 1268.

         3. In order to establish a claim for interference with prospective economic advantage in Nevada, a plaintiff must establish the following elements: (1) a prospective contractual relationship between the plaintiff and a third party; (2) the defendant's knowledge of this prospective relationship; (3) the intent to harm the plaintiff by preventing this relationship; (4) the absence of privilege or justification by the defendant; and (5) actual harm to the plaintiff as a result. Custom Teleconnect, Inc. v. Int'l Tele-Servs., Inc., 254 F.Supp.2d 1173, 1180-81 (D. Nev. 2003).

         4. Here, there is no dispute that Plaintiff has contracts with some of its customers. Defendants knew of the contracts by virtue of Hall's former position as Operations Manager and Hall had access to customer contact information, the representative's name, and pricing information. Defendants set up their business in October 2016 using Plaintiff's resources to jump start the business, including Plaintiff's American Express credit card.

         5. Hall's explanation that it was an accident that he used Plaintiff's American Express credit card is not credible because he made three charges on three different dates, December 31, 2016, January 5, 2017 and January 6, 2017.

         6. Hall also used Plaintiff's employees while the employees were being paid by Plaintiff to do work for Fleetwash's clients on behalf of MTW. Mr. Delgado's testimony was credible on this issue because he does not any personal interest in this dispute and it takes a lot for an employee to report his supervisor. The Court also make this assessment based on Mr. Delgado's demeanor at the hearing.

         7. Further, Hall admitted to servicing Plaintiff's customer, American Ready Mix, and his explanation of the other customers who were serviced was not credible in light of Mr. Delgado's testimony that Hall knew that Bladmir Navarro had performed work for those customers, that Hall directed other ...


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