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Totem Forest Products Inc. v. T & D Timber Products, LLC

United States District Court, D. Maine

February 24, 2017

TOTEM FOREST PRODUCTS, INC., & TOTEM STEEL INTERNATIONAL, INC., Plaintiffs,
v.
T & D TIMBER PRODUCTS, LLC, Defendant.

          ORDER ON PLAINTIFF'S MOTION FOR A TEMPORARY RESTRAINING ORDER

          JON D. LEVY U.S. DISTRICT JUDGE.

         This matter comes before the Court on the motion of Totem Forest Products, Inc. and Totem Steel International, Inc. (collectively “Plaintiffs”) for a Temporary Restraining Order (ECF No. 4) (“Motion”).

         I. FACTUAL BACKGROUND

         Plaintiffs' Motion and supporting documents establish that the Plaintiffs purchased 6, 124 8” x 4' x 16' timber crane mats (“Mats”) from the Defendant pursuant to a course of dealing that commenced in early December 2015. The purchases were documented by a written purchase agreement, purchase orders and written terms and conditions of sale. The Defendant confirmed the Plaintiffs' purchase of the Mats through invoices which were sent to the Plaintiffs for payment after delivery of the Mats. Under the purchase agreement, and the terms and conditions of sale, the Defendant agreed to a bailment whereby it would store the Mats for the Plaintiffs and keep the Mats segregated from other materials on the Defendants' property. The Defendant agreed to load out the Mats for shipment to the Plaintiffs' customers when directed by the Plaintiffs.

         On November 30, 2016, the Plaintiffs' director of operations visited the Defendants' business location in Biddeford. At that visit, the Defendants' president pointed out over 4, 200 Mats as the Plaintiffs' inventory which were segregated from the Defendant's other materials at the Biddeford location. On December 9, 2016, the Defendants' president confirmed that the inventory of Mats belonging to the Plaintiffs was at locations in Biddeford, Jefferson, Lyman and Lincoln as of December 5, 2016. The Plaintiffs made additional purchases of Mats in December 2016 to bring the total to 6, 214.

         On February 1, 2017, the Defendant's president informed the Plaintiffs' director of operations that the Defendants' business operations had been frozen by the IRS. The Defendant has not allowed the Plaintiffs to inspect the Plaintiffs' inventory of Mats, and has not made the Mats available for shipment to the Plaintiffs' customers since that time. On February 13, 2017, the Defendant notified the Plaintiffs that the Defendant was in the process of filing for bankruptcy protection. On February 14, 2017, the Plaintiffs' director of operations flew in from Portland, Oregon to inspect the Plaintiffs' Mats, but was refused access to the Defendants' facility in Lyman. He then drove to Biddeford, and observed from the street that the Mats which were identified to him on November 30, 2016 had been relocated.

         The Plaintiffs filed their complaint on February 23, 2017 together with its motion for a temporary restraining order, supported by the Declaration of Trevor Sarazin. Notice of the Plaintiffs' Motion was provided to the Defendant's registered agent.

         II. LEGAL ANALYSIS

         In considering a request for a temporary restraining order, the court must determine: “(1) the movant's likelihood of success on the merits; (2) whether and to what extent the movant would suffer irreparable harm if the request were rejected; (3) the balance of hardships between the parties; and (4) any effect that the injunction or its denial would have on the public interest.” Wicked Good Charcoal, Inc. v. Ranch-T, LLC, 2015 U.S. Dist. LEXIS 173255, at *2-3 (D. Me. Dec. 30, 2015) (quoting Diaz-Carrasquillo v. Garcia-Padilla, 750 F.3d 7, 10 (1st Cir. 2014)).

         1. Likelihood of Success on the Merits

         I conclude at this preliminary stage that the Plaintiffs have established a likelihood of success on the merits related to the Plaintiffs' breach of contract, conversion and trespass to personal property claims. The Plaintiffs purchased the Mats from the Defendant pursuant to written agreements whereby the Defendant also agreed to store the Mats for the Plaintiffs separately from other materials until the Plaintiffs needed to ship them to the Plaintiffs' customers. The Defendant identified the Mats as having been sold to, and stored for the Plaintiffs. The Defendant has relocated the bulk of the Mats that were in Biddeford, and refused to allow the Plaintiffs director of operations to inspect the Mats.

         2. Irreparable Harm

         The Plaintiffs will suffer irreparable harm absent a temporary restraining order. The Defendant is likely insolvent, has represented that its business has been frozen by the IRS, and has threatened to file bankruptcy. The Mats were “entrusted” to the Defendant by the Plaintiffs, and the Defendant is a merchant who deals in the same kind of goods. Hence, the Defendant arguably has the power to transfer title to the Mats to a buyer in the ordinary course of business under the Uniform Commercial Code. See 11 M.R.S. § 2-403(2).

         3. ...


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