Evans v. Scribe One Limited LLC

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Kellye Evans, No. CV-19-04339-PHX-DLR

10 Plaintiff, ORDER

11 v.

12 Scribe One Limited LLC, et al.,

13 Defendants. 14 15 16 On August 29, 2019, pursuant to stipulation, the Court enjoined Defendant Scribe 17 One Limited LLC (“Scribe One”) from making distributions to Defendant Sydney Stern 18 while this lawsuit is pending. (Doc. 73.) At the time, Plaintiff Kellye Evans had live claims 19 to ownership of Scribe One. Since then, the Court has disposed of Ms. Evans’ ownership- 20 related claims on summary judgment. (Docs. 288, 299.) As such, there now is no longer 21 a live claim that Ms. Evans owns Scribe One, although there remain live claims that Scribe 22 One owes Ms. Evans money. 23 In light of these developments, Defendants have asked the Court to dissolve the 24 portion of the stipulated preliminary injunction restricting distributions from Scribe One to 25 Stern. (Doc. 301.) In response, Ms. Evans says she does not oppose dissolving this portion 26 of the injunction so long as Scribe One “maintain[s] in immediately available funds the 27 minimum amount of $351,524,” which is the amount of money Ms. Evans claims she is 28 owed. (Doc. 302.) In reply, Defendants argue that the stipulated preliminary injunction 1 “was not to be a prejudgment attachment, but to ensure the Defendants did not dissipate 2 Scribe One’s assets while there were pending claims before this Court related to the 3 ownership of the Company.” (Doc. 304 at 2.) Nonetheless, Defendants represent that, 4 should the Court dissolve the relevant portion of the stipulated preliminary injunction, they 5 will “voluntarily hold at least $150,000 in [Scribe One’s] account in immediately available 6 funds to ensure any amount owned, based on the jury’s factual finding, is readily 7 available.” (Id.) This amount reflects the approximate amount that Defendants believe 8 they might owe Ms. Evans. (See Doc. 302 at 3.) 9 The Court will grant Defendants relief, provided they hold at least $150,000 in 10 immediately available funds. The Court agrees with Defendants that the purpose of the 11 stipulated preliminary injunction was not to serve as a prejudgment attachment. It was to 12 ensure that Scribe One remained operational while Ms. Evans’ ownership-related claims 13 were litigated. Those claims are no longer at issue. All that remains are claims that Scribe 14 One might owe Ms. Evans money. Therefore, the relief Ms. Evans requests in her response 15 to Defendants’ motion to lift the preliminary injunction is more akin to an asset freeze. “A 16 party seeking an asset freeze must show a likelihood of dissipation of the claimed assets, 17 or other inability to recover monetary damages, if relief is not granted.” Johnson v. 18 Couturier, 572 F.3d 1067, 1085 (9th Cir. 2009) (emphasis added). This can be shown, for 19 example, by evidence that Defendants will become insolvent or that they have “engaged in 20 a pattern of secreting or dissipating assets to avoid judgment.” In re Estate of Ferdinand 21 Marcos, Human Rights Litig., 25 F.3d 1467, 1480 (9th Cir. 1994) (emphasis added). No 22 such showing has been made here. Accordingly, 23 IT IS ORDERED that Defendants’ motion to lift injunction (Doc. 301) is 24 GRANTED. Consistent with Defendants’ representations in their reply brief, Scribe One 25 / / / 26 / / / 27 / / / 28 || shall hold at least $150,000 in immediately available funds during the pendency of this case. But otherwise, the portion of the Court’s August 29, 2019 preliminary injunction || restricting distributions from Scribe One to Stern is hereby dissolved. 4 Dated this 24th day of August, 2022. 5 6 ‘boy tha 9 Upied States Dictria Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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