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BMO Harris Bank N.A. v. Montana Farms LLC

United States District Court, N.D. Mississippi, Aberdeen Division

May 2, 2018

BMO HARRIS BANK N.A., a national banking association PLAINTIFF
v.
MONTANA FARMS LLC, a Mississippi Corporation, ALONZO SYKES, ANGELENA COOK, TERRY MCINTOSH DEFENDANTS

          MEMORANDUM OPINION

          SHARION AYCOCK UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff's Motion for Preliminary Injunction. The Court held hearings on the matter on April 6, 2018 and April 13, 2018. The Court summarizes its findings as follows.

         Factual and Procedural History

         From February 2015 to November 2015, Defendants entered into seven loan and security agreements with non-party lenders General Electric Capital, GE Capital Commercial, Inc. and Transportation Truck and Trailer Solutions, LLC, pursuant to which the lenders financed the purchase of certain collateral for use in the Defendant borrowers business. The lenders subsequently transferred all of their rights, titles and interests in the agreements and collateral to Plaintiff.

         Pursuant to the terms of the agreements, when Defendant borrowers failed to make payments in November 2017, Plaintiff accelerated the amounts due and owing under the agreements. After written demands to surrender possession of the retained collateral[1] went unanswered, Plaintiff filed its Complaint [1], as well as its Motion for Temporary Restraining Order (TRO), Motion for Preliminary Injunction, and Motion for Replevin [3] in this Court on January 30, 2018. Plaintiff alleges that Defendants are in default for several reasons, requiring the Defendant borrowers to return the respective units of property to Plaintiff.

         First, Plaintiff alleges that Defendant is in continuing payment default, occurring over the span of several months. Second, Plaintiff alleges that Plaintiffs failed to provide insurance documentation. Third, Plaintiff alleges that Defendants are in default due to the fact that Montana Farms, LLC was dissolved. Finally, Plaintiff alleges that Defendants leased the sixth unit of collateral to McIntosh Transport, LLC., contravening the terms of the Sixth Agreement.

         However, Plaintiffs failed to properly serve all Defendants. On February 19, 2018, personal service was accomplished by process server on Defendants Terry McIntosh and Angelena Cook, individually. Thereafter, Plaintiff filed a “Supplemental Certificate of Service, ” certifying that true copies of relevant pleadings were mailed to the attorneys who have appeared for Defendants Montana Farms, LLC, Angelena Cook, and Terry McIntosh. Plaintiff completed service on Alonzo Sykes, Senior, and Montana Farms on March 8, 2018. However, Plaintiff has not completed service upon Alonzo Sykes Jr., the correct registered agent for Montana Farms. Thus, on March 7, 2018, this Court denied Plaintiff's Motion for Temporary Restraining Order without prejudice, citing certain failures to comply with Federal Rule of Civil Procedure 65.

         Thereafter, Plaintiff filed its Motion for Reconsideration, rearguing its requests for injunctive relief and correcting some of its procedural defects. On March 16, the Court granted Plaintiff's Motion for Reconsideration regarding Plaintiff's Motion for TRO, holding in abeyance the determination of more permanent relief until the present hearing. Plaintiff filed its replevin bond in the amount of $570.893.26 on March 20, 2018. After expiration of the initial TRO, the Court granted an extension pending resolution of the present motion for preliminary injunction.

         Preliminary Injunction Standard

         Four elements are required for the grant of a preliminary injunction:

(1) The movant must establish a substantial likelihood of success on the merits;
(2) There must be a substantial threat of irreparable injury if the injunction is not granted;
(3) The threatened injury to the plaintiff must outweigh the threatened injury to ...

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