United States District Court, D. Colorado
PHILIP A. BRIMMER, District Judge.
This matter comes before the Court on the Verified Emergency Motion for Ex Parte Temporary Restraining Order [Docket No. 20] filed by plaintiff Ross Dress for Less, Inc. ("Ross"). Ross requests an order temporarily enjoining defendant Walton Foothills Holdings VI, L.L.C. ("Walton") from taking any action that (1) demolishes any portion of the building located at 112 E. Foothills Parkway, Fort Collins, Colorado, 80525 in which Ross operates a retail store (the "Store"), (2) disrupts physical or visual access to the Store, (3) creates safety hazards for Ross's employees and customers; or (4) destroys, diverts, or blocks access to the parking lot that services the Store through use of fencing or other materials. Docket No. 20 at 12-13. The Court held a hearing on the motion for a temporary restraining order on September 22, 2014. Counsel for plaintiff and both defendants appeared at the hearing. Neither side asked to present anything other than oral argument. Thus, the Court will decide this motion based on the briefs, attachments to the briefs, and oral argument. The Court has jurisdiction pursuant to 28 U.S.C. § 1331.
In 1997, Ross signed a lease ("lease") for the Store with a term of fifteen years and three additional options to renew for five-year periods. Docket No. 20-1 at 4. The Store is located in a commercial complex that includes a number of other buildings as well as parking spaces (the "shopping center"). See generally id. at 36. In relevant part, the lease provides that, "[e]xcept as set forth in Exhibit D [to the lease], [Walton] may not make any material change to the Site Plan without [Ross's] prior written approval, which approval shall not be unreasonably withheld or delayed." Id. at 5. Exhibit D, in turn, enumerates four specific buildings that Walton is permitted to tear down and remodel. Id. at 39, ¶¶ 1-3, 5.
During the week of September 1, 2014, Walton began construction in the parking area and common areas of the shopping center. Docket No. 20 at 5. Walton allegedly assured Ross that its construction activities would not interfere with Ross's business. Despite the construction activities, the Store still has access to as many as 101 parking spaces, Walton has put up several large signs indicating the Store is open for business during construction, and Walton has, since the filing of the TRO motion, added additional lighting to address plaintiff's safety concerns. Docket No. 27 at 3, 10-11. On September 18, 2014, Walton began demolishing the vacant unit abutting the Store that previously contained an ARC thrift store (the "ARC store"). Docket No. 20 at 5, see also Docket No. 27 at 4. By September 21, 2014, demolition of the ARC store was substantially complete. Docket No. 27 at 8. Walton intends to start remodeling activities on the ARC store site.
Walton indicates that it has no intention to demolish the Store unless and until it has a right to do so through a pending condemnation action, and stipulates to an order prohibiting it from doing so. Docket No. 27 at 6.
To justify the issuance of a temporary restraining order, the moving party must show (1) a likelihood of success on the merits; (2) a likelihood that the movant will suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in the movant's favor; and (4) that the injunction is in the public interest. RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009) (citing Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20 (2008)).
A. Likelihood of Success on the Merits
For the reasons outlined at the September 22, 2014 hearing, the Court finds that plaintiff is not likely to succeed on the merits with respect to disruption of access to the Store, the creation of safety hazards, and the restriction of parking spaces. The parties agree that Walton has the right to conduct a substantial amount of the construction currently underway at the shopping center. Any construction inherently causes some degree of disruption. Plaintiff has not shown that Walton's construction activity generally is in breach of the lease, and in fact the lease specifically contemplates that Walton is able to perform certain construction without obtaining plaintiff's approval.
Plaintiff has, however, shown a likelihood of success on the merits with respect to demolition and remodeling of the ARC store. The lease provides that, except as specifically enumerated in Exhibit D, Walton is not permitted to make any "material change" to the Site Plan without Ross's prior written approval. Docket No. 20-1 at 5. Exhibit D contains no mention of the ARC store, id. at 39, and Walton has shown no evidence that plaintiff either provided written approval or unreasonably withheld or delayed its written approval before Walton began demolishing the ARC store.
The Court finds that demolition and remodeling of the ARC store is a material change to the Site Plan. Thus, plaintiff is likely to succeed on its claim that Walton breached the lease when it demolished the ARC store and will breach the lease through any remodeling or building activities on the ARC store site.
B. Irreparable Harm
With respect to the ARC store site, plaintiff has demonstrated that it will be irreparably harmed in the absence of a temporary restraining order. Walton argues that any harm to plaintiff would be compensable through money damages. Docket No. 27 at 5-7. However, at the hearing, Walton was unable to explain how any economic damages model could differentiate between the harm caused by the demolition and remodeling of the ARC store and the harm caused by other construction activities allowed under the lease. The Court finds that where, as here, two different activities are occurring simultaneously, either of which could result in lost profits to ...