United States District Court, D. Nevada
LVC SURGICAL CENTER, LLC, a Nevada Limited Liability Corporation; Plaintiff,
INSIGHT SURGICAL EQUIPMENT CO, an Arizona Corporation; DOES 1 through 10, inclusive; and ROE BUSINESS ENTITIES I through X, inclusive, Defendant.
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
the Court is Plaintiff's Renewed Motion for Preliminary
Injunction (ECF No. 20), Defendant's Response (ECF No.
23), and Plaintiff's Reply (ECF No. 27). Because
Plaintiff has failed to demonstrate irreparable harm, that
the balance of the equities favors Plaintiff, and that a
preliminary injunction is in the public interest, the Court
denies the Motion.
filed the operative complaint in this action in the Eighth
Judicial District Court on September 12, 2019, asserting
several causes of action against Defendant related to a
contract to deliver equipment for use in Plaintiff's
ambulatory surgical center. ECF No. 1-2. Defendant filed the
Petition for Removal to federal court on October 4, 2019. ECF
No. 1. On October 7, 2019, Plaintiff filed a Motion for
Preliminary Injunction. ECF No. 3. The Court ordered briefing
on the motion, ECF No. 8, and a hearing was held on October
16, 2019, ECF No. 13. The Court denied the motion without
prejudice at the hearing, referred the action to the
magistrate judge for the purposes of settlement mediation,
and ordered the parties to file a joint status report
“identifying each piece of equipment under the
contract, the relevant industry standard or certification
protocol for the identified equipment if applicable, when the
equipment must be certified if required and who is
responsible for ensuring that it is compliant, and a detailed
description of the certification process by the State of
Nevada, ” as well as any indication of disagreement as
to these items. Id. A settlement conference was
ordered for January 3, 2020. ECF No. 14. On October 21, 2019,
Defendant filed a Notice of Related Cases. ECF No. 15. On
October 30, 2019, the parties filed separate status reports.
ECF No. 16, 17. On November 4, 2019, Plaintiff filed the
instant motion pursuant to the Court's Order issued on
October 31, 2019 in response to the parties' respective
status reports (ECF No. 18). ECF No. 20. Defendant responded
on November 13, 2019, ECF No. 23, and Plaintiff replied on
November 15, 2019, ECF No. 27.
controversy arises out of an alleged breach of contract.
Plaintiff alleges that Defendant failed to provide conforming
equipment for use in Plaintiff's ambulatory surgical
center in accordance with their contract, and that delivery
of the equipment was continually delayed. Defendant disputes
the equipment was non-conforming and states that the delay
was the consequence of Plaintiff's own conduct. With
regard to whether the equipment conformed to the terms of the
contract, the parties disagree, inter alia, about
which standards apply to the certification of the equipment
for use in the ambulatory surgical center, whether those
standards have been satisfied for the delivered equipment,
whose responsibility it is to ensure compliance with those
standards, and when the equipment must be deemed in
Court makes the following factual findings. On May 28, 2018,
the parties entered into the contract for Defendant to
deliver to Plaintiff specified goods for use in the
ambulatory surgical center. The original delivery date was
delayed but an agreement on a revised delivery date was
reached on or about April 19, 2019. ECF No. 20 at 3.
Defendant provided a projection for delivery dates beginning
May 1, 2019 that asserted all equipment would be delivered by
June 14, 2019. Id. Plaintiff asserts the delivery of
this equipment was continually delayed and has not yet been
provided in full. Id. at 4. Plaintiff further
asserts the equipment has not been certified for use in the
ambulatory surgical center in accordance with the various
certification procedures, resulting in delay of the opening
of the surgical center. Id. at 4-13.
10, 2019, Plaintiff sent Defendant a letter proposing new
dates for items as yet undelivered under the original
schedule. Id. at 3. Plaintiff also told Defendant in
this letter that it expected perfect tender on or before June
14, 2019. Id.
17, 2019, Plaintiff sent Defendant an email asking for an
update relating to the delivery of the remaining equipment,
id. at 4, and on June 25, 2019 sent another email
requesting an update on delivery with notice that “22
separate pieces of equipment or 51% of the order still had
not been delivered, ” id. On July 31, 2019,
Plaintiff asserts equipment was still outstanding.
Id. Plaintiff gave Defendant a new deadline of
August 21, 2019 to tender the certified equipment, then an
additional extension until August 28, 2019. Id. On
August 23, 2019, Plaintiff sent Defendant a demand for
adequate assurances of performance for delivery by August 28,
2019 and put Defendant on notice of its failure to provide
conforming equipment that would be fit for the surgical
center's particular purpose. Id.
sales representative, Brian Case, sent an email on August 27,
2019 acknowledging receipt of an Excel spreadsheet listing
delivered items and their deficiencies. Id. On
August 29, 2019, due to Defendant's alleged failure to
address the demand letter and/or provide the missing
equipment, Plaintiff declared default and demanded that
Defendant remove the allegedly non-conforming equipment from
the surgical center. Id. at 6.
September 3, 2019, Plaintiff's attorney provided
Defendant's counsel a list indicating Defendant had only
delivered 61% of the ordered equipment, of which 70% was
“defective/not certified, ” and told Defendant
that an autoclave Defendant installed was defective because
it was not certified by the State of Nevada and would subject
Plaintiff to state fines of up to $5, 000. Id. at
6-7. Plaintiff reiterated this message on September 5, 2019
and Defendant's counsel stated Defendant would have the
boiler removed. Id. at 8. Plaintiff asserts that it
told Defendant on September 24, 2018 via email of the
applicable requirements for autoclave installation and
certification. Id. Plaintiff argues Defendant failed
to meet these requirements and that on September 6, 2019,
attempted to install an autoclave that had not been certified
by Nevada. Id.
states Plaintiff is responsible for the delay in delivery and
asserts a slightly different timeline of events. On March 13,
2018, Defendant tendered an invoice memorializing the
agreement with Plaintiff and requested a 60% deposit pursuant
to standard practice. ECF No. 23 at 3. This deposit was paid
in June 2018 after some delay. Id. at 3-4. LVC
principal Ngan Le informed Defendant shortly thereafter that
construction of the surgical center was delayed and the
October 2018 installation deadline would not be met.
Id. at 4.
October 2018, another LVC principal, Dr. Thomas Le, requested
a meeting to establish a second quote for another medical
center which was finalized later that month. Id. The
deposit for the second surgical center was negotiated as a
loan. Id. Defendant asserts Plaintiff's
architects caused a seven-month delay in preparing the