Case 3:15-cv-00749-BR Document 28 Filed 06/02/15 Page 1 of...

Randolph C. Foster, OSB No. [email protected] A. Piper, OSB No. 141609ed:[email protected] RIVES LLP

900 SW Fifth Avenue, Suite 2600Portland, OR 97204Telephone: (503) 224-3380Facsimile: (503) 220-2480

Attorneys for DefendantC.E. John Properties 65, LLC

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

TUATARA ENTERPRISES, INC., dba Case No.: 3:15-cv-00749-BRBESAW'S, an Oregon Corporation,

Plaintiff,

v.

C.E. JOHN PROPERTIES 65, LLC, anOregon limited liability company,

Defendant.

DEFENDANT C.E. JOHNPROPERTIES 65, LLC'S MOTION

FOR TEMPORARY RESTRAININGORDER SEEKING RESTORATION

OF DEFENDANT'S PROPERTYREMOVED BY PLAINTIFF FROM

THE BESAW'S BUILDING

ORAL ARGUMENT REQUESTED

EXPEDITED HEARING REQUESTED

DEFENDANT C.E. JOHN PROPERTIES 65, LLC'S MOTION FORTEMPORARY RESTRAINING ORDER

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Case 3:15-cv-00749-BR Document 28 Filed 06/02/15 of 23

LR 7-1(a) CONFERRAL CERTIFICATION

Defendant C.E. John Properties 65, LLC ("C.E. John") attempted to resolve the matters

addressed in this motion by conferring with Plaintiff Tuatara Enterprises, Inc.'s (`Plaintiff s")

counsel in good faith, via both email and telephone. Plaintiff opposes this motion, and the

parties otherwise were unable to resolve the matters addressed in this motion.

MOTION FOR MANDATORY INJUNCTION AND TRO

Pursuant to Federal Rule of Civil Procedure 65 and this Court's inherent authority to

issue injunctions preserving the status quo pending a decision on the merits, C.E. John moves for

a mandatory injunction and temporary restraining order ("TRO") requiring Plaintiff to return and

reinstall the iconic neon "Besaw's" sign, awning, tile, and other fixtures that were physically

attached to (and, as to the sign, integrated electrically with) its property located at 2301 NW

Savier St., Portland, OR 97210 (the "Besaw's building"), and which Plaintiff improperly

removed sometime on the evening of May 29 or on the morning of May 30, 2015. C.E. John still

is determining the full extent of Plaintiff s misconduct, but to the extent it discovers that Plaintiff

has improperly removed other property, it moves for an order directing Plaintiff to return and, if

necessary, reinstall those items as well. Additionally, and also pursuant to Federal Rule of Civil

Procedure 65, C.E. John moves for an injunction barring Plaintiff from removing, possessing,

damaging, or otherwise interfering with C.E. John's property associated with the Besaw's

building.

This motion is based on the Memorandum in Support below, the Declarations of Brook

Bays and Edward A. Piper filed herewith, the other pleadings and documents on file with the

Court, and such other evidence and argument as the parties may present to the Court. C.E. John

also has submitted a proposed order to the Court.

Page 1 - DEFENDANT C.E. JOHN PROPERTIES 65, LLC'S MOTION FORTEMPORARY RESTRAINING ORDER

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MEMORANDUM IN SUPPORT

I. INTRODUCTION

This litigation concerns the parties' respective rights to use the "Besaw's" name. For at

least 70 years, a neon "Besaw's" sign, from which the name itself derived its commercial

significance, was physically attached to the Besaw's building at NW 23rd and Savier Streets and

hung over the front door of the Besaw's restaurant:

The sign was physically attached to the Besaw's building when the Jones family, C.E. John's

predecessor, purchased it from the Besaw family in the mid-1980s. It was still there when C.E.

John purchased the building in 2011.

The sign is the property of C.E. John, the building's owner. Plaintiff leased the Besaw's

building beginning in 2005 and operated the restaurant there until its lease expired on May 31,

2015. Plaintiff does not own the Besaw's building's sign, awning, interior floor tile, or any of

the building's other permanent fixtures bearing the Besaw's name that were affixed to the leased

premises. Those fixtures are a significant part of what makes the Besaw's building the Besaw's

building.

In anticipation of the May 31 expiration of the parties' lease term, C.E. John repeatedly

reminded Plaintiff that C.E. John owns those fixtures, both in a May 1, 2015 letter in anticipation

of the end of Plaintiff s lease and on numerous occasions thereafter, including a letter to Plaintiff

following a walkthrough of the premises with a representative of C.E. John. C.E. John also

reiterated that position multiple times in filings in this litigation; in particular, it did so in its


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pending motion for an injunction to enforce the Lease Agreement's terms regarding the Besaw's

name. Plaintiff never disputed C.E. John's position, and never gave any indication that it was

planning to remove (or destroy) the Besaw's sign, awnings, tile and other landlord property when

the lease terminated. Moreover, at a hearing requested by Plaintiff last Thursday on Plaintiff's

application to restrain C.E. John from using the Besaw's name, which was denied, Plaintiff gave

no indication that it intended to strip the Besaw's building of anything with the Besaw's name on

it. At that hearing, C.E. John indicated to the Court that it intended to advise Plaintiff of any

anticipated change in the status quo affecting the parties' dispute (e.g., reopening the restaurant),

and that it expected that the Plaintiff would do likewise, so that the parties would have time to

address any disputes with the Court. Plaintiff did not suggest that it would act in any manner

that would change the status quo.

Just days later—sometime late Friday night or Saturday morning, as it was removing its

property from the leased premises—and without any notice whatsoever to C.E. John, Plaintiff

physically detached and removed the 70-year-old Besaw's sign over the building's front door,

awning, interior floor tile, barstools, window bearing the Besaw's name, and other fixtures.

When it learned of Plaintiff's misconduct, C.E. John immediately demanded that Plaintiff return

the property and reinstall the fixtures. Plaintiff refused, claiming that a lease term governing

"Lessee's exterior signage" entitled Plaintiff to detach and remove the iconic Besaw's sign that

had been attached to the Besaw's building for decades before Plaintiff became a tenant, as well

as other fixtures.

Through this motion, C.E. John asks that the Court return the parties to the status quo as

it existed at the time of the May 28 hearing. At that time, the sign, awning, tile, window, and

other fixtures were still attached to the Besaw's building and, as the Court held, there was no


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threat to the status quo, or of irreparable harm to either party. In removing the fixtures, however,

Plaintiff, apparently frustrated that the Court denied its request for a TRO, unilaterally changed

the status quo by stripping the premises of any fixtures related to the name "Besaw's."

Effectively, Plaintiff "debranded" the building.

C.E. John now faces a threat of irreparable harm: C.E. John is in danger of losing the

"grandfathered" zoning status associated with the Besaw's building's historical signage, and if

the sign and awning are not immediately replaced, C.E. John may be unable to reinstall them in

compliance with the City of Portland's permitting requirements. Additionally, based on the fact

that the iconic, decades-old neon "Besaw's" sign is extremely fragile, C.E. John is concerned

that the sign is in danger of being permanently and irreparably damaged, if it is not damaged

already.

The fixtures that Plaintiff removed from the Besaw's building bear the Besaw's name and

are inextricably intertwined with the parties' current dispute over ownership and rights to use the

name. In prior filings, C.E. John repeatedly referred to its ownership of the Besaw's sign and to

the fact that it was physically attached to the Besaw's building long before the parties' Lease

Agreement was ever even contemplated. Plaintiff's outrageous conduct is an improper attempt

to gain leverage in the parties' underlying dispute, and to damage C.E. John's commercial

interests as owner of the Besaw's building. C.E. John requests that the Court grant its request for

an immediate order restoring the status quo until the Court decides this case on the merits.

II. FACTS

A. The Iconic Neon Besaw's Sign, Awning, Tile, and Other Fixtures at the Besaw'sBuilding Belong to C.E. John, the Building's Owner.

The iconic neon Besaw's sign has hung over the front door to the Besaw's building for at

least 70 years. (See Declarations of Kathryn Bradach-Williamson (Dkt. #10) ("Bradach Decl."),


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114-5, Suzanne Jones (Dkt. #12) ("Jones Decl."), im 2 and 14, and Jeffrey V. Thompson (Dkt.

#13) ("First Thompson Decl."), ¶¶ 12-13, in Support of C.E. John's Motion for Summary

Judgment.)

Jones Group Associates ("JGA"), C.E. John's predecessor in interest, acquired the

Besaw's building from members of the Besaw family in approximately 1986, and since at least

that time, the sign has been both a part of the building itself as well as an integral part of the

restaurant businesses that have operated there through successive tenant/operators and under

leases that permitted them to use the Besaw's name only during the term of the lease.

(Declaration of Walker John in Support of C.E. John's Motion for Summary Judgment ("John

Decl."), ¶ 13; Jones Decl., In 2, 6, and 14; First Thompson Decl., ¶¶ 12-13.) C.E. John acquired

the sign and the Besaw's name from JGA when C.E. John when it purchased the Besaw's

building from JGA in 2011. (First Thompson Decl., ¶¶ 12-13.)

Before Plaintiff detached and removed it, the neon Besaw's sign was (and remains) a

permanent part of the Besaw's building and belongs exclusively to C.E. John. (Declaration of

Brook Bays ("Bays Decl."), 714-5.) The sign itself was bolted to the Besaw's building and hung

from two metal cables that were themselves affixed to the building. (Id.) The sign also was

integrated into the Besaw's building's electrical systems, and the neon "Besaw's" logo was

powered through the building's electricity. (Id.)

The same was true of the black-and-white awning that was affixed to the Besaw's

building. The awning was installed before Plaintiff became a tenant. (See id., TT 6-7.) The

building contains several other fixtures, including tile floor that read "Est. 1903," the year that

George Besaw first opened his bar in the neighborhood. (See id., ¶ 10.) Before Plaintiff

improperly removed them, the awning and tile appeared as shown in the photos below:


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440 r 1 slily-0,00.1.j.

to.,1 &cal211— ttith"

Ogihfiffiir .MESTAURANT BAR

(Id., 16 and 10.) The Besaw's building also had a plate-glass window and other signage near

its garden, office, and parking lot incorporating the Besaw's name. (Id., ¶¶ 11-12.)

The 2005 Lease Agreement governing the parties' rights and duties with respect to the

Besaw's building (the "Lease Agreement") does not specifically address the sign, awning, or tile,

or any of the building's other permanent fixtures. However, upon the lease's termination, the

Lease Agreement requires Plaintiff to "discontinue to use trade name `Besaw's' . . . and [to]

execute any documents to transfer trade name to [C.E. John.]" at the lease's conclusion. (First

Thompson Decl., Ex. 1 at 13.) The Lease Agreement further states that "the name `Besaw's' . . .

shall at all times be and remain the sole and exclusive property of C.E. John, and that, when the

lease terminates, all rights in "the trade name `Besaw's' . . . shall revert to" C.E. John. (Id., Ex. 1

at 10 and 13.)

The Lease Agreement also contains a provision stating that the landlord owns any new

fixtures installed during the lease term.1 (Id., Ex. 1 at 8.) Paragraph 26 of the Lease Agreement

Paragraph 23.4 of the Lease Agreement provides generally that any new "fixtures,additions, and improvements . . . placed upon the Leased Premises during the Lease term . . .


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separately addresses "Lessee's exterior signage," which, Inlotwithstanding Lessor's consent to

any such [signage] . . . Lessee shall remove . . . upon termination of the Lease, and repair any

damage to the premises caused thereby at Lessee's own cost and expense." (Id., Ex. 1 at 10

(emphasis added).) Neither that paragraph nor any other part of the Lease Agreement says

anything else about signage that existed prior to the time that Plaintiff became a tenant, or

signage that was permanently attached to the Besaw's building. The signage provision was for

the landlord's benefit, in that it allowed the landlord to insist that a sign installed by the tenant be

removed at the landlord's direction, at the tenant's expense, and with an obligation to repair.

B. C.E. John Repeatedly Instructed Plaintiff Not to Remove the Fixtures in theBesaw's Building, and Has Requested a Permanent Injunction Barring Plaintifffrom Using the Besaw's Name.

In anticipation of the end of the lease, and in light of the fact that Plaintiff was

aggressively asserting that it owns the Besaw's name, C.E. John's counsel sent a letter to

Plaintiff's counsel on May 1 addressing, among other things, Plaintiff's obligations not to

remove the Besaw's sign and awnings. (See Declaration of Edward A. Piper ("Piper Decl."), Ex.

1.) In that letter, C.E. John advised Plaintiff that:

The awnings and Besaw's sign affixed to the Besaw's building allbelong to CE John upon expiration of the lease. They must not bealtered or removed by your client. Tuatara must provide writtenassurances that it will not alter or seek to remove this propertyfrom the Besaw's building.

(Id., Ex. 1 at 4.) C.E. John reiterated that it owns the sign and awnings over the next month.

Following a walkthrough of the Besaw's building on May 12, C.E. John sent a letter to Plaintiff

on May 21, 2015, in which it indicated:

shall, at Lessor's sole option, be and become a part of the building and shall remain affixedthereto at the expiration or termination of the Lease." (First Thompson Decl., Ex. 1.)


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As a follow up to our walk through on May 12, 2015, the Landlordexpects the Tenant to leave and not remove the following itemswithin or attached to the premises upon vacating the spaces onMay 31, 2015:

1. The neon Besaw's signage affixed to the building.2. The Besaw's office signage affixed to the building.3. The Besaw's Garden space signage.4. All awnings including the patio awning, structure,

and side panels.

A final walk through of the Café and the Office Premises[] will beconducted on June 1, 2015 at 10:00 a.m. If you have any questionsregarding your move out or any items addressed in this letter,please contact me directly . . . .

(Bays Decl., Ex. 2.)

C.E. John also specifically addressed the neon Besaw's sign and awning in its prior

filings and, in doing so, made clear that they are central elements of the parties' underlying

dispute. Most significantly, C.E. John asserted on May 8, 2015 in its Answer, Defenses, and

Counterclaims that it was the sole owner of the Besaw's name, that Plaintiff breached its

obligations under the parties' Lease Agreement in part by attempting to register a federal

trademark for a logo obviously derived from the Besaw's sign, and that C.E. John is entitled to a

permanent injunction barring Plaintiff from using the name. (See Dkt. #6, TT 73, 78, 84-86.) On

May 15, 2015, C.E. John filed a motion for summary judgment and other relief, in which it

requested a permanent injunction barring Plaintiff from using the Besaw's name and an order of

specific performance requiring Plaintiff to transfer whatever interest it had in the Besaw's name

to C.E. John. (See Dkt. #9 at 1-3.) In that motion, C.E. John specifically referenced the Besaw's

sign, and included a color photograph depicting it. (Id. at 11.) It also described the sign in detail

in the declarations it submitted in support of its motion. (Jones Decl., Tif 2 and 14; Bradach

Decl., ¶¶ 4-5; John Decl., ¶ 13; First Thompson Decl., ¶ 13.)


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Additionally, when Plaintiff moved last week for a TRO, C.E. John specifically relied on

the sign's and awning's fixture to the Besaw's building in its opposition. C.E. John argued that

Plaintiff's requested TRO "would [unreasonably] . . . require C.E. John to cease use of the

Besaw's sign that has been on the Besaw's building since at least the 1930s, and to remove or

alter the awnings around the building that say `Besaw's.'" (Dkt. #20 at 3 and 14.) Again, C.E.

John included a color photograph of the sign as it then appeared on the Besaw's building. (Id. at

14.) As noted above, the Court denied Plaintiffs application for a TRO that would have required

C.E. John to remove the awnings and sign.

Not once during that time did Plaintiff ever indicate that it planned to remove any of the

fixtures discussed above, that it was even contemplating doing so, or that it believed it owned the

fixtures. (Bays Decl., IN 14-15; Piper Decl., ¶ 2.) Neither before nor after its May 21 post-

walkthrough letter did C.E. John receive any such indication. (See Bays Decl., Ex. 2.) During

the May 28, 2015 hearing on Plaintiffs own motion for a TRO, the parties effectively agreed

that they would, at minimum, provide each other with some notice before any change in their

then-current status quo regarding matters in dispute. (Piper Decl., ¶ 3.)

C. Over the Weekend, Plaintiff Unilaterally Changes the Status Quo by PhysicallyDetaching and Removing the Neon Besaw's Sign, Awning, Tile, Window, and OtherFixtures Attached to the Besaw's Building.

Less than two days after Thursday's TRO hearing, C.E. John discovered that Plaintiff had

detached and physically removed the Besaw's sign, awning, and other fixtures bearing the

Besaw's name. (Bays Decl., ¶ 16.) The Besaw's building now appears as shown in the two

photos below:


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(Id., TT 18-19.)

Plaintiff also altered and damaged the tile in the Besaw's building. The tile floor that

read "Est. 1903" now looks like this:

Vie°° s. t %tan! 0000000000 44,sss.vvosvevass.ssss '' ''''''''' *eau..or • *we • • • r**. 414%%%ts`Te %%%%%**%%%%

(Id., ¶ 20.) C.E. John discovered Plaintiff's improper removal when one of its representatives

happened to walk by the Besaw's building on Saturday afternoon. (Id., ¶ 16.)

To remove the neon Besaw's sign, Plaintiff would have had to unbolt the sign and its

supporting cables, and detach the sign's electrical wiring. (See id., irf 4-5.) Based on the manner

in which the sign appears to have been removed and the fact that the sign itself is extremely

fragile, C.E. John believes the sign was damaged. (Id., ¶ 25.)


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C.E. John's counsel immediately contacted Plaintiff's counsel and demanded that the

removed fixtures be reinstalled immediately. (Piper Decl., Ex. 2.) Plaintiff refused. (Id.)

Plaintiff's counsel "refer[red C.E. John] to lease [sic]. The lease clearly states tenant 'shall'

remove all signage at the end of the lease. My client would be in breach of the lease if it did not

remove the signage." (Id.) Ignoring the lease's plain terms regarding use of the Besaw's name,

and, more importantly, the communications from C.E. John over the past month directing

Plaintiff not to remove or alter any of the property, to which Plaintiff never once responded or

objected, Plaintiff's counsel claimed that "we are simply following the lease." (Id.) Plaintiff has

refused to return the property it improperly removed, and refuses to reveal where the property

currently is located. (Id., ¶ 6.)

III. ARGUMENT

"It has long been established that where a [party] with notice in an injunction proceeding

completes the acts sought to be enjoined the court may by mandatory injunction restore the status

quo." Desert Citizens Against Pollution v. Bisson, 231 F.3d 1172, 1187 (9th Cir. 2000) (internal

quotation marks omitted) (quoting Porter v. Lee, 328 U.S. 246, 251 (1946)). Likewise, in

Oregon and elsewhere, courts regularly condemn self-help by parties during litigation over

property disputes. State ex rel. Crown Inv. Grp., LLC v. City of Bend, 206 Or. App. 453, 136

P.3d 1149 (2006); see also Burke v. Prudential Ins. Co. of Am., No. 02 C 5910, 2004 WL

784073, at *4 (N.D. Ill. Jan. 29, 2004) ("Self-help in litigation is not condoned by the courts.");

Weitz v. Green, 148 Idaho 851, 864, 230 P.3d 743 (2010) ("This Court strongly disfavors the

resort to forceful self-help in resolving property disputes.").

Plaintiff has known for weeks that C.E. John would not permit it to remove the Besaw's

sign, awnings, and other specific property at the conclusion of the lease; among other


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communications, C.E. John specifically warned Plaintiff not to remove the sign, awning, and

other fixtures in its May 21 post-walkthrough letter. Plaintiff also has known for weeks that C.E.

John is seeking a permanent injunction prohibiting Plaintiff from post-lease use of the Besaw's

name, including the very conduct in which it has engaged here. Plaintiff never objected to C.E.

John's position regarding the Besaw's building's fixtures. Instead, Plaintiff chose silence to

conceal its true intentions to strip the Besaw's building of anything bearing the name "Besaw's."

In light of Plaintiff's misconduct, an injunction is necessary both to restore the status quo

pending resolution of this case on the merits and to prevent further irreparable harm to C.E. John

as this case proceeds.

A. Legal Standard.

A party may obtain a mandatory injunction in a case involving a request for injunctive

relief where an opposing party has notice of its opponent's equitable claims but nevertheless

"completes the acts sought to be enjoined." Bisson, 231 F.3d at 1187 (internal quotation marks

omitted) (quoting Porter, 328 U.S. at 251); see also Moore v. Consol. Edison Co. of N. Y, 409

F.3d 506, 510 n.4 (2d Cir. 2005) (Sotomayor, J.) (reiterating "the well established principle that

`where a defendant with notice in an injunction proceeding completes the acts sought to be

enjoined the court may by mandatory injunction restore the status quo'" (quoting Porter, 328

U.S. at 251)); Nat'l Forest Pres. Grp. v. Butz, 485 F.2d 408 (9th Cir. 1973) (same).

Additionally, a party may obtain a TRO where: (1) "[it] is likely to succeed on the

merits," (2) "[it] is likely to suffer irreparable harm in the absence of preliminary relief," (3) "the

balance of equities tips in [its] favor," and (4) "an injunction is in the public interest."2 Winter v.

2 The standards governing TROs and preliminary injunctions in federal court areidentical. See Harris v. Oak Grove Cinemas, Inc., No. 3:13-CV-00728-HU, 2013 WL 3456563,at *1 (D. Or. May 2, 2013) (collecting cases).


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Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). In assessing a motion for a TRO, "[t]he

court may apply a sliding scale test, under which the elements of the preliminary injunction test

are balanced, so that a stronger showing of one element may offset a weaker showing of

another.'" Giftango, LLC v. Rosenberg, 925 F. Supp. 2d 1128, 1138 (D. Or. 2013) (quoting

Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011)).

B. Regardless of the Underlying Merits, an Injunction Requiring Plaintiff to Returnthe Fixtures It Improperly Removed Is Necessary to Preserve the Status Quo andDiscourage Plaintiffs Self-Help.

To restore the status quo pending a hearing on the merits, an injunction requiring Plaintiff

to return and reinstall the Besaw's sign, awning, tile, window, and other fixtures it improperly

removed from the Besaw's building is warranted.

A mandatory injunction is warranted because Plaintiff had "notice in [this] injunction

proceeding" that C.E. John had requested an order barring it from using the Besaw's sign,

awnings, and other property it removed from the Besaw's building, and more generally from

using the Besaw's name in any other way. Bisson, 231 F.3d at 1187 (internal quotation marks

omitted) (quoting Porter, 328 U.S. at 251). Nevertheless, after sandbagging C.E. John for nearly

a full month, Plaintiff "complete[ed] the acts sought to be enjoined" by C.E. John and

accomplished the result that Plaintiff had sought to obtain in the TRO application that this Court

had denied just days earlier. Id.

The injunction and order of specific performance that C.E. John requested as remedies

for its counterclaims would prohibit the conduct in which Plaintiff has engaged here, i.e.,

detaching, removing, and misappropriating fixtures on the Besaw's building that incorporate the


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Besaw's name.3 In its counterclaims, C.E. John seeks to enforce a provision in the Lease

Agreement requiring Plaintiff to "discontinue to use trade name `Besaw's' . . . and [to] execute

any documents to transfer trade name to [C.E. John.]" (First Thompson Decl., Ex. 1 at 13.) The

Lease Agreement further makes clear that "the name `Besaw's' . . . shall at all times be and

remain the sole and exclusive property of C.E. John, and that, when the lease terminates, all

rights in "the trade name `Besaw's' . . . shall revert to" C.E. John. (Id., Ex. 1 at 10 and 13.)

For those reasons, the Court should "by mandatory injunction restore the status quo" until

it can decide this case on the merits. Bisson, 231 F.3d at 1187 (internal quotation marks omitted)

(quoting Porter, 328 U.S. at 251). "The status quo is the last uncontested status which preceded

the pending controversy." Greenfield v. U.S. Marine Corps, No. 12CV311 JLS POR, 2012 WL

1133184, at *3 (S.D. Cal. Apr. 4, 2012) (internal quotation marks omitted) (quoting Tanner

Motor Livery, Ltd. v. Avis, Inc., 316 F.2d 804, 808 (9th Cir. 1963)). The "last uncontested

status" with respect to the sign, awning, tile, and other fixtures is simple and undisputed: before

Plaintiff improperly detached and removed them, they were physically attached to the Besaw's

building, and the sign had been there for at least 70 years. (See Bradach Decl., TT 4-5; Jones

Decl., Tif 2 and 14; First Thompson Decl., in 12-13; Bays Decl., TT 4-13.)

The Besaw's building is where those fixtures should remain, as they have for years, until

the Court decides this case on the merits. Plaintiff has made clear that it believes that its

trademark law arguments somehow trump the plain terms of the Lease Agreement regarding

ownership and use of the Besaw's name, but for the purposes of this motion, the merits of the

parties' underlying claims need not be decided. The purpose of a mandatory injunction to restore

3 Plaintiff may well intend to use the removed fixtures in connection with the newrestaurant it plans to open near the Besaw's building. Plaintiff has publicly declared that it is"already in negotiations on a location nearby, and . . . expect[s] to reopen by the end of summer."(First Thompson Decl., Ex. 6 at 4.)


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the status quo is to provide each party with a fair opportunity to litigate its claims on the merits,

and so the merits themselves should have no place in the Court's decision-making. See, e.g.,

Butz, 485 F.2d at 411 ("[A]fter a [party] has been notified of the pendency of a suit seeking an

injunction against him, even though a temporary injunction be not granted, he acts at his peril

and subject to the power of the court to restore the status, wholly irrespective of the merits as

they may be ultimately decided . . . ." (emphases added; internal quotation marks omitted)

(quoting Jones v. SEC, 298 U.S. 1, 17 (1936))).

Oregon courts have recognized the same principle in property disputes, i.e., the merits of

the underlying dispute are irrelevant where a party has engaged in improper self-help during

litigation. In Crown, the Oregon Court of Appeals affirmed a contempt finding and a $100,000

remedial sanction against a party that demolished an historic building while a mandamus

proceeding was pending to determine whether demolition was permissible. 206 Or. App. at 455.

The appellant argued that it would have prevailed in the mandamus proceeding, and thus that

contempt was unwarranted. Id. at 457-58. The court, however, rejected that argument, holding

that:

The injury to the city consisted not only in losing the historicbuilding or artifacts from it, but also in losing the opportunity tocontest the demolition through the courts—to avail itself of therules and procedures duly established by the political communityto resolve disputes. The city might have prevailed or it might havelost, but injury occurred nonetheless. Crown's theory—that self-help inflicts no harm i f it merely anticipates what a court will do—cannot be reconciled with the rule of law that underlies, indeedthat defines, civil society.

Id. at 458-59 (emphasis added).

The Court should apply the same principle here. As the Court and the parties discussed

last Thursday during the hearing on Plaintiff's own motion for a TRO, nothing should occur to


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change the status quo without prior notice and opportunity to be heard while the parties bring the

matter to an expedited hearing on the merits. Plaintiff's conduct already has severely

complicated that task, and if Plaintiff is permitted to keep the fixtures it unlawfully removed—all

of which are central to the parties' underlying dispute—it may prevent full relief for C.E. John

when it prevails in this case. By contrast, if the fixtures are reinstalled, they will remain secure

on the Besaw's building, as they have for years, until the Court decides this case on the merits.

(See Bays Decl., ¶ 26.) Additionally, Plaintiff should not be permitted to benefit from its self-

help, particularly when it concealed its intentions in the face of express instructions from C.E.

John not to remove the sign, awning, or other fixtures. The Court should order Plaintiff

immediately to return and reinstall the sign, awning, tile, and other fixtures it improperly

removed from the Besaw's building.

C. A TRO Enjoining Plaintiff from Removing, Possessing, Damaging, or OtherwiseInterfering with Any of the Other Fixtures at the Besaw's Building Until ThisLitigation Concludes Also Is Warranted.

In addition to an order directing Plaintiff to return and reinstall the Besaw's sign, awning,

tile, and other fixtures it improperly removed, C.E. John requests a TRO barring Plaintiff from

further removing, possessing, damaging, or otherwise interfering with any of the fixtures on the

Besaw's building unless and until authorized to do so by this Court. Insofar as Plaintiff's

improper removal and possession of those fixtures is concerned, C.E. John has shown a

likelihood of success on the merits, a threat of irreparable harm, and that the balance of equities

and public interest favor a TRO.


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1. C.E. John Is Likely to Prevail on the Merits Because It Owns the Besaw'sName, Sign, and Awnings and Because Plaintiffs Self-Help During ThisLitigation Is Itself an Injury to C.E. John.

C.E. John has shown a likelihood of success on the "merits" in two ways. A TRO is

appropriate on either independent basis.

First, regardless of whether either party ultimately is barred from using the Besaw's

name, the undisputed facts make clear that the physical property at issue in this motion—i.e.,

sign, awning, and other items that Plaintiff improperly removed from the Besaw's building—are

fixtures that belong to C.E. John, the Besaw's building's owner. "A fixture is personal property

that, by being physically annexed or affixed to real property, becomes accessory to the real

property and part and parcel of it.'" Oldham v. Fanno, 168 Or. App. 573, 577, 7 P.3d 672 (2000)

(quoting Metro. Life Ins. Co. v. Kimball, 163 Or. 31, 44, 94 P.2d 1101 (1939)). "Whether a piece

of property is a fixture depends on (1) whether it is physically annexed to the real property, (2)

whether it is specifically adapted to the property, and (3) whether the party attaching it

objectively intended it to become part of the property when she attached it." Id. "`[W]here the

landowner affixes articles to the real property that are appropriate to the use of the property, . . .

an implication arises that' she intended them to be treated as part of the realty." Id. (quoting 1

George W. Thompson, Commentaries on the Modern Law of Real Property § 59, at 213 (John S.

Grimes ed., 1980)).

Based on those factors, the Besaw's sign, awning, and other removed property are

fixtures. All were physically annexed to the Besaw's building; in particular, the sign is powered

by electricity from the building. (Bays Decl., TT 4-6, 10-13.) All were specifically adapted to

the property, in that they were designed for the Besaw's building, and each displays the Besaw's

name, which, under the Lease Agreement, is to remain with the building. (Id.) And, given the


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manner in which each was attached—the sign, awning, and barstools each were bolted to the

Besaw's building, and the sign was integrated into the building's electrical systems—it is clear

that whoever attached them intended them to remain permanently with the building itself. (Id.)

The many years during which the sign, awning, tile, barstools, and other fixtures remained with

the Besaw's building only confirm that intent. (Id.) Those items are fixtures that belong to C.E.

John.4

Second, C.E. John has demonstrated a likelihood of success on the merits in that

Plaintiff's misconduct has interfered with its ability to obtain a judicial determination on the

merits as to who owns the sign, awnings, and other property incorporating the Besaw's name

while maintaining the property in its current status pending that determination. See Bisson, 231

F.3d at 1187; Crown, 206 Or. App. at 455 ("The city might have prevailed or it might have lost,

but injury occurred nonetheless."). The "injury" is to the status quo pending a determination of

C.E. John's claims on the merits, which a TRO is necessary to restore and protect.

2. Plaintiffs Detachment and Removal of the Sign, Awning, and Other FixturesThreaten C.E. John with Ongoing Irreparable Harm.

C.E. John has suffered irreparable harm and will be threatened additional irreparable

harm if Plaintiff is not ordered to return and reinstall the fixtures it improperly removed, and to

refrain from removing, possessing, damaging, or otherwise interfering with any other fixtures on

the Besaw's building. Plaintiff has refused to return or reinstall the property it improperly

removed, and refuses to reveal where the property currently is located. (Piper Decl., ¶ 6, Ex. 2.)

However, based on the manner in which the sign was detached and the fact that it is extremely

fragile, C.E. John believes that the sign has been damaged. (Bays Decl., rif 25-26.) The sign

4 C.E. John owns the fixtures regardless of when they actually were installed. The LeaseAgreement plainly states that any fixtures added during the term of the lease will belong to C.E.John. See note 1, supra.


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itself is unique and irreplaceable, and any further damage caused to it would be irreparable. (Id.)

A TRO is necessary to prevent any future harm to the sign, awnings, and other fixtures on the

Besaw's building.

Additionally, the City of Portland has detailed permitting requirements related to signage

and awnings, including awnings that constitute signage. See generally City of Portland Bureau

of Development Services, Sign & Awning Permits, https://www.portlandoregon.gov/bds/36686

(last accessed June 1, 2015). Signage is regulated by the City of Portland pursuant to the

requirements of Title 32. Besaw's signage is nonconforming ("grandfathered") and has been

allowed as preexisting the current zoning requirements in Title 32. (Bays Decl., 78-9.)

Removal of the signage threatens the nonconforming status of the signage. See generally

Portland City Code 32.36.020. If C.E. John's nonconforming use rights are lost, the

nonconforming status of the signage likely also would be lost, and, in that event, the sign could

only be replaced following a new permitting request. Given the current status of Portland's

signage code, it is not clear whether the signage could be replaced in a new permitting process at

all. See id. 32.36.020(H)(2) ("When a [nonconforming] sign or sign structure is removed . . .

replacement signs and sign structures must comply with the current standards."). Even if it

could, a new permitting process would take substantial time and would interfere with reopening

the restaurant. (Bays Decl., ¶¶ 8-9.)

Because of the immediate threat of the loss of existing nonconforming use rights and the

risk of extended and uncertain permitting processes, C.E. John requires a TRO to protect itself

from irreparable harm.


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3. The Balance of Equities and Public Interest Favor C.E. John.

Both the balance of equities and the public interest favor a TRO. As an initial matter,

Plaintiff has unclean hands. See Innovation Ventures, LLC v. Pittsburg Wholesale Grocers, Inc.,

No. C 12-05523 WHA, 2012 WL 6697695, at *3 (N.D. Cal. Dec. 24, 2012) ("Unclean hands is

one of the factors a court may consider when deciding to exercise its discretion to grant an

injunction." (citing 11A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §

2946, at 111)). If it had objected to C.E. John's position regarding ownership of the sign,

awning, and other fixtures, Plaintiff should have said so in response to C.E. John's multiple

communications that it owned those assets, and this motion might have been avoided. Plaintiff

never once did so. (Piper Decl., ¶ 2; Bays Decl., ¶¶ 14-15.) Instead, Plaintiff has engaged in

classic "sandbagging" over the course of the past month: if it had previously revealed its plans,

C.E. John would, of course, have sought the immediate assistance of the Court to prevent the

removal of the fixtures. For a month, and during the hearing on its own motion for a TRO,

Plaintiff misled C.E. John as to its true plans for the sign, awning, and other fixtures. It should

not now be permitted to profit from its deception.

Moreover, the balance of hardships itself strongly favors a TRO. If required to return and

reinstall the sign, awning, and other fixtures pending a determination on the merits, the harm to

Plaintiff will be negligible or nonexistent. The Court already determined as much during the

May 28 hearing on Plaintiffs own motion for a TRO, at which time the sign, awning, tile,

barstools, window, and other fixtures were still attached to the Besaw's building and, as the

Court held, there was no threat of irreparable harm to either party. Neither will there be any

future irreparable harm if those fixtures are reinstalled as they have been for years. (Bays Decl.,


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26.) By contrast, and as discussed above, the harm to C.E. John likely will be substantial if

Plaintiff is permitted to retain the fixtures.

Finally, the public interest favors a TRO. It would be manifestly contrary to the public

interest to permit Plaintiff to profit from its self-help, through which it has unilaterally attempted

to change the status quo to gain leverage in the parties' underlying dispute. Crown, 206 Or. App.

at 458-59 ("Crown's theory—that self-help inflicts no harm if it merely anticipates what a court

will do—cannot be reconciled with the rule of law that underlies, indeed that defines, civil

society.").

IV. CONCLUSION

For the foregoing reasons, C.E. John respectfully requests that the Court grant its motion

for a TRO and mandatory injunction. C.E. John has submitted a proposed order to that effect to

the Court.

DATED: June 2, 2015.STOEL RIVES LLP

/s/ Edward A. PiperRandolph C. Foster, OSB No. [email protected] A. Piper, OSB No. [email protected] RIVES LLP

900 SW Fifth Avenue, Suite 2600Portland, OR 97204Telephone: (503) 224-3380Facsimile: (503) 220-2480



79124669.3 0017800-00212


CERTIFICATE OF SERVICE

I hereby certify that I served the foregoing DEFENDANT C.E. JOHN PROPERTIES

65, LLC'S MOTION FOR TEMPORARY RESTRAINING ORDER SEEKING

RESTORATION OF DEFENDANT'S PROPERTY REMOVED BY PLAINTIFF FROM

THE BESAW'S BUILDING on the following named person(s) on the date indicated below by

notice of electronic filing using theCm/ECF system

Dennis Steinman, OSB No. [email protected] Thomas R. Rask, III, OSB No. [email protected] Scott J. Aldworth, OSB No. [email protected] Mathew W. Lauritsen, OSB No. [email protected], ALTERMAN & RUNSTEIN, LLP520 SW Yamhill Street, Suite 600Portland, OR 97204Telephone: (503) 222-3531Fax: (503) 227-2980

Attorneys for Plaintiff

DATED: June 2, 2015. STOEL RIVES LLP

/s/ Edward A. Piper

Page 1 - CERTIFICATE OF SERVICE

Randolph C. Foster, OSB No. [email protected] Edward A. Piper, OSB No. [email protected] 900 SW Fifth Avenue, Suite 2600Portland, OR 97204Telephone: (503) 224-3380Facsimile: (503) 220-2480


79124669.3 0017800-00212


Case 3:15-cv-00749-BR Document 28 Filed 06/02/15 Page 1 of...

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