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Insurance Company of West v. RPS Holdings, Inc.

United States District Court, D. Nevada

April 15, 2019

INSURANCE COMPANY OF THE WEST, Plaintiff,
v.
RPS HOLDINGS, INC., et al., Defendants.

          ORDER

          JAMES C. MAHAN UNITED STATES DISTRICT JUDGE.

         Presently before the court is plaintiff Insurance Company of the West's (“ICW”) motion for preliminary injunction. (ECF No. 2). Defendants RPS Holdings, Inc.; Randolph Schams; Christine Schams; and Eldorado Estates Las Vegas, LLC (“Eldorado Estates”) (collectively “defendants”) did not file a response and the time to do so has passed.

         I. Facts

         On April 27, 2007, ICW issued a surety bond in the amount of $358, 138.40 with Clark Count, Nevada as the obligee and Eldorado Estates as the principal. (ECF No. 2-2). ICW issued the bond for the off-site improvements of the Eldorado Estates Phase I (“Phase I construction”) project in Clark County, Nevada. Id.

         As partial consideration for the bond, defendants entered into a general indemnity agreement (“GIA”). (ECF No. 2-1). The GIA provides that the defendants will indemnify ICW for damages that arise from the surety bond or defendants' failure to perform in accordance with the GIA. Id. The GIA also provides that, if ICW believes it will incur a loss or expense on the bond, it can demand defendants to deliver cash or collateral. Id Eldorado Estates failed to complete the Phase 1 construction by October 5, 2011, when its construction permit expired. (ECF No. 2-4). The Clark County Department of Public Works subsequently asserted a bond claim against ICW for Eldorado Estates' failure to perform. (ECF Nos. 2-4, 2-5). To date, Clark County has not released its claim. (ECF No. 2).

         On January 30, 2019, ICW initiated this action, asserting a single cause of action for breach of contract. (ECF No. 1). In its complaint, ICW demanded for defendants to post collateral pursuant to the GIA. Id. Nothing in record indicates that defendants posted collateral or obtained a release of bond from Clark County.

         Now, ICW moves for a preliminary injunction, requesting that the court order specific performance of the GIA. (ECF No. 2). Specifically, ICW request the court to require defendants to (1) post collateral in the amount of $358, 138.40 and (2) provide documentation pertaining to the completion of the Phase I construction and the bond release timeline. Id.

         II. Legal Standard

         Federal Rule of Civil Procedure 65 provides that the court may issue a preliminary injunction on notice to the adverse party. Fed.R.Civ.P. 65(a)(1). A preliminary injunction seeks to preserve the status quo and prevent irreparable harm from occurring before a judgment is issued. Textile Unlimited Inc. v. BMH & Co., 240 F.3d 781, 786 (9th Cir. 2001).

         The Supreme Court has stated that courts must consider the following elements in determining whether to issue a preliminary injunction: (1) likelihood of success on the merits; (2) likelihood of irreparable injury if preliminary relief is not granted; (3) balance of hardships; and (4) advancement of the public interest. Winter v. N.R.D.C., 555 U.S. 7, 20 (2008). The test is conjunctive, meaning the party seeking the injunction must satisfy each element.

         Additionally, post-Winter, the Ninth Circuit has maintained its serious question and sliding scale tests. See Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). “Under this approach, the elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another.” Id.

         “Serious questions going to the merits and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” Id. at 1135.

         III. Discussion

         Litigants seeking a preliminary injunction have a burden to satisfy each of the four elements above. See Winter, 555 U.S. at 20. The court will address each element in turn to determine ...


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