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Guzy v. Guzy

United States District Court, D. Nevada

March 26, 2019

MARK GUZY, Plaintiff,
v.
MARY ANN GUZY, Defendant.

          ORDER

          ROBERT C. JONES UNITED STATES DISTRICT JUDGE

         The Plaintiff moves this Court to enter a temporary restraining order and preliminary injunction enjoining the Defendant from confirming either of two arbitration decisions awarded in the Defendant's favor. Because the Plaintiff has failed to show any irreparable harm, the Court denies the Plaintiff's Motion for Temporary Restraining Order (ECF No. 7) and Motion for Preliminary Injunction (ECF No. 8). The Court does not reach the merits of any other contentions made by the parties at this time.

         I. FACTS AND PROCEDURAL HISTORY

         The Plaintiff and the Defendant were limited partners of Arbor Co., a Nevada LLP (Compl. 3:1-3:7, ECF No. 1.) All three entities entered into a settlement agreement in February 12, 2009. (Id. 3:15-3:20.) Under the agreement, Arbor Co., was to pay the Plaintiff $34, 975, 842.22 with interest and pay the Defendant $21, 139, 769.25 with interest. (Mot. for TRO Ex. 2, ECF No. 7.) Additionally, the parties agreed to resolve all disputes related to their agreement through the arbitration of William Sherman, Esq. ("the Arbitrator"). (Compl. 3:15- 3:20.)

         On April 11, 2014, the Arbitrator found that the Plaintiff had been overpaid due to a mistake in the interest rate at which his debt accrued, so the Arbitrator issued an award against the Plaintiff and in the Defendant's favor (April 11, 2014 Arbitration Award). (Id. 4:9-4:13.) Under die April 11, 2014 Arbitration Award, the Plaintiff was to pay the Defendant "(i) the $1, 269, 827.78 principal amount of such overpayment plus (ii) the accrued interest at 5.25% per annum on such amount from May 5, 2011 ... the per diem rate of interest on the $1, 269, 827.78 principal payment due from [the Plaintiff] to [the Defendant] is $182.65." (Id. Ex. 1 at 3.)

         On October 11, 2012, prior to the April 11, 2014 Arbitration Award, the Plaintiff sued Arbor Co. in Nevada state court ("the Nevada state case"), and in the course of this litigation, sought to vacate the April 11, 2014 Arbitration Award. (Id. 4:17-4:21.) During the pendency of this litigation, the Defendant sought to interplead in the Nevada state case in 2018. (Mem. in Opp'n to TRO 4:15-5:2, ECF No. 19.) Before the court addressed the Defendant's interpleader, the Plaintiff and Arbor Co. filed a stipulated dismissal of the case. (Id.) The Nevada court dismissed the case on July 13, 2018. (Id.) However, the Defendant filed a successful motion to reconsider the dismissal, and the Nevada court reopened the case on August 1, 2018. Id. The Plaintiff challenged the reopening of the case seeking a writ of mandamus with the Nevada Supreme Court, which was denied on February 7, 2019. (Id.)

         During the pendency of the state court case, the Defendant sought to confirm the April 11, 2014 Arbitration Award in the United States District Court for the Western District of Texas ("the Texas federal case"). Guzy v. Guzy, No. 1:17-CV-228-RP, 2017 WL 3032432 (WD. Tex. July 17, 2017). The district court dismissed the application to confirm the April 11, 2014 Arbitration Award with prejudice on the basis that the application was untimely as there is a one- year statute of limitation to confirm an arbitration award under the Federal Arbitration Act. Id., ; see 9 U.S.C. § 9. Subsequently, the Defendant sought to confirm the Arbitration Award in Texas state court in May 2018. (Compl. 6:14-6:20.) After the Plaintiff filed an answer and the Nevada state case was remanded to finally reach the merits on whether to confirm the April 11, 2014 Arbitration Award, the Defendant nonsuited the Texas state case. (Id.; Mem. in Opp'n to TRO 5:26-6:2.)

         Subsequently, the Defendant sought arbitration to cover her expenses due to the Plaintiffs purported refusal to comply with the April 11, 2014 Arbitration Award. (Mem. n Opp'n to TRO 6:4-6:24.) The Plaintiff denied that the Arbitrator retained jurisdiction over the matter. (Id.) However, on May 1, 2019, the Arbitrator held that he retained jurisdiction over the matter, that the Plaintiff was in defiance of the April 11, 2014 Arbitration Award, and that Plaintiffs further assertions were meritless (May 1, 2019 Arbitration Award). (Id.) The Arbitrator found that the Plaintiffs repeated attempts to avoid payment were vexatious. Accordingly, the Arbitrator: (i) reaffirmed his prior orders; (ii) set the principal amount and the accrued unpaid interest on such principal amount due from the Plaintiff to the Defendant through December 31, 2018 as $1, 472, 545.42 and $592, 417.12 respectively; (iii) determined that the per diem dollar amount of interest owed by the Plaintiff to the Defendant was $211.80; (iv) imposed a sanction of $200, 000; and, (v) awarded the Defendant an additional $50, 000, including interest, in sanctions until the Plaintiff pays the Defendant the full amount due. (Id.)

         The confirmation of the April 11, 2014 Arbitration Award is now before the Nevada state court. (Mem. in Opp'n to TRO 5:3-5:10.) Plaintiff has filed the present action seeking an injunction to enjoin the Defendant from enforcing either arbitration award and to enjoin all other litigation.

         II. LEGAL STANDARDS

         A temporary restraining order should be limited to carrying out its "underlying purpose of preserving the status quo and preventing irreparable harm just so long as is necessary to hold a hearing, and no longer." Granny Goose Foods v. Bd. of Teamsters & Auto Truck Drivers, 415 U.S. 423, 439 (1974). It "is an extraordinary remedy never awarded as of right." Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). Temporary restraining orders are durationally limited and automatically expire, as their purpose is to preserve the status quo until a hearing can be held for a preliminary injunction. Fed.R.Civ.P. 65(b)(2); Winter, 555 U.S. at 24. Such orders are non-appealable, Mayweathers v. Gomez, 60 F.3d 833 (9th Cir. 1995); Forest v. F.D.I.C, 976 F.2d 736 n.1 (9th Cir. 1992), and are committed to the sound discretion of the trial court, Jimenez v. Barber, 252 F.2d 550, 554 (9th Cir. 1958). A temporary restraining order "may only be awarded upon a clear showing [by] the plaintiff [that it] is entitled to such relief." Winter, 555 U.S. at 22.

         While temporary restraining orders differ in some respects from preliminary injunctions, the standard for granting a temporary restraining order and a preliminary injunction is the same. Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001) (stating that a separate analysis was not required because the analysis is "substantially identical" for a temporary restraining order and a preliminary injunction); V' Guara Inc. v. Dec, 925 F.Supp.2d 1120, 1123 (D. Nev. 2013). To obtain preliminary injunctive relief, the Ninth Circuit has established two alternative sets of criteria:

Under the traditional test, a plaintiff must show: (1) a strong likelihood of success on the merits, (2) the possibility of irreparable injury to plaintiff if preliminary relief is not granted, (3) a balance of hardships favoring the plaintiff, and (4) advancement of the public interest (in certain cases). The alternative test requires that a plaintiff demonstrate either a combination of probable success on the merits and the possibility of irreparable injury or mat serious questions are raised and the balance of hardships tips sharply in his favor.

Taylor v. Westly, 488 F.3d 1197, 1200 (9th Cir. 2007). The Supreme Court later ruled, however, that a plaintiff seeking a preliminary injunction must demonstrate that irreparable harm is "likely," not just possible. Winter v. NRDC,555 U.S. 7, 19-23 (2008) (rejecting the alternative "sliding scale" test, at least as to the irreparable harm requirement). In Stormans, Inc. v. Selecky, the Ninth Circuit recognized that the "possibility of irreparable injury" test was "definitively refuted" in Winter and that the appropriate standard "requires a party to demonstrate 'that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in he public interest.'" 586 F.3d 1109, 1127 (9th Cir. 2009) (quoting Winter, 555 U.S. at 20) ...


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