Mekari v. Access Restoration Services US, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

DR. AMMAR MEKARI, ET AL. CIVIL ACTION

VERSUS NO. 23-5362

ACCESS RESTORATION US, INC., ET SECTION “B”(2)

AL.

ORDER AND REASONS

Before the Court is a Motion for Temporary Restraining Order

(Rec. Doc. 4) filed by Plaintiffs Dr. Ammar Mekari (“Dr. Mekari”),

Kingman Holdings, LLC (“Kingman”), and Mekari Laser Dentistry,

LLC, (“Mekari Dentistry”) (collectively, “Plaintiffs”). Defendants

Access Restoration Services, US, Inc. (“ARS”), Global Services,

Inc. (“GES”), and ARS/Global Emergency Management, Inc.

(collectively, “Defendants”), have filed an Opposition (Rec. Doc.

10), and Plaintiffs have filed a Reply in Support (Rec. Doc. 14).

For the following reasons, the Motion for Temporary

Restraining Order is DENIED.

BACKGROUND

Plaintiff Dr. Mekari1 and Defendant ARS entered into a

contract (the “Contract”)2 for the purpose of having Defendant ARS

1 Plaintiff Dr. Mekari is the sole member of Plaintiffs Kingman and Mekari

Dentistry, both juridical entities. Rec. Doc. 15 at 2. Plaintiff Kingman owns

the Metairie Property, id. at 3, and upon information and belief, the Metairie

Property is Plaintiff Mekari Dentistry’s principal place of business, see Rec.

Doc. 4-4 at 1.

2 The Contract was executed on September 11, 2021. See Rec. Doc. 4-4 at 7-20;

Rec. Doc. 10-1. Plaintiff Dr. Mekari is the signatory; however, it is unclear

perform restoration services on Plaintiffs’ property located in

Metairie, Louisiana (the “Metairie Property”),3 after it was

damaged by Hurricane Ida. See Rec. Doc. 4-4 at 7-20; Rec. Doc.

10-1. The Contract contains a “DISPUTE RESOLUTION” clause

providing that Plaintiff Dr. Mekari4 and Defendant ARS “agree to

and consent that any controversy or claim arising out of, or

relating to this contract, or the breach thereof, shall be settled

by arbitration administered by the American Arbitration

Association, under the Construction Industry Arbitration Rules.”

Rec. Doc. 4-4 at 8; Rec. Doc. 10-1 at 2.

After Defendant ARS completed the restoration work on the

Metairie Property, a dispute arose regarding an unpaid invoice

related to Defendant ARS’s restoration work.5 In response to this

dispute and in accordance with the dispute resolution clause

outlined in the Contract, Defendant ARS initiated an arbitration

proceeding through the American Arbitration Association against

Plaintiffs Dr. Mekari and Mekari Dentistry for breach of the

whether Plaintiff Dr. Mekari signed individually and on behalf of both

Plaintiffs Kingsman and Mekari Dentistry, or individually and on behalf of only

Plaintiff Kingsman or only Plaintiff Mekari Dentistry.

3 The Metairie Property’s precise address is 4500 York Street Metairie, LA

70001.

4 See supra notes 1-2.

5 Approximately a month after the Contract was executed, Defendant ARS completed

the restoration work on the Metairie Property and sent Plaintiffs Dr. Mekari

and Mekari Dentistry an invoice for Defendant ARS’ services, labor, and

materials; the principal amount on the invoice is $347,563.29. This invoice is

still outstanding.

Contract, seeking to recover the outstanding invoice. Rec. Doc. 10

at 2-3 n.8 (citing Rec. Doc. 4-4). This arbitration proceeding is

currently on-going; a scheduling order has been issued,6 the

discovery deadline has passed,7 and a final arbitration hearing is

set for November 9, 2023. See Rec. Doc. 10-2.

In the present Motion, Plaintiffs Dr. Mekari, Kingsman, and

Mekari Dentistry are seeking a temporary restraining order to

enjoin enforcement of the dispute resolution clause in the

Contract. In simpler terms, Plaintiffs are requesting this Court

to halt the on-going arbitration proceeding. The basis for this

request stems from Plaintiffs’ assertion that the Contract, which

contains the dispute resolution clause, is absolutely null due to

fraud. To fully grasp Plaintiffs’ position, it is necessary to

recount the events leading up to the execution of the Contract

between Plaintiff Dr. Mekari and Defendant ARS.

Following the landfall of Hurricane Ida in Louisiana and the

subsequent damage to the Metairie Property, Plaintiffs retained

the services of the law firm McClenny, Moseley, and Associates

(“MMA”) to represent them in their insurance claim against the

Metairie Property’s insurer. Rec. Doc. 4-1 at 1-2. MMA advised

that Plaintiffs enter into the Contract with Defendant ARS. Id. at

6 Plaintiff Dr. Mekari, individually and on behalf of Plaintiff Mekari Dentistry,

participated in the arbitration’s preliminary hearing. Rec. Doc. 10-2 at 1.

7 All discovery was to be completed by September 15, 2023. Id. at 2. Plaintiffs

Dr. Mekari and Mekari Dentistry have not participated in discovery in the

arbitration proceeding.

2. It later came to light that MMA and Defendant ARS had an existing

contractual arrangement. After Hurricane Ida, MMA and Defendant

ARS entered into a financing and investment agreement. See Rec.

Doc. 4-3 at 2. Under this agreement, Defendant ARS committed to

providing MMA with a loan of $3,000,000.00 to fund litigation that

MMA was pursuing on behalf of its clients in claims against their

respective insurers related to Hurricane Ida damage. Id. In return

for Defendant ARS’s $3,000,000.00 investment, as Plaintiffs tell

it, MMA “would kickback clients/insureds to [Defendant] ARS.” Rec.

Doc. 4-1 at 2. Consequently, Plaintiffs argue that the Contract,

“was based in fraud as Plaintiff [Dr. Mekari] was forced, coerced,

and misled as to the true nature of the [C]ontract and the prior

illegal relationship between MMA” and Defendant ARS. Id. As a

result, Plaintiffs contend that the Contract is absolutely null

and thus, never legally existed. And if the Contract containing

the dispute resolution clause never existed, Plaintiffs pose the

question: “then how or why is [it] relevant what the American

Arbitration Association has to say?” Rec. Doc. 14 at 2.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 65 and Fifth Circuit

authority, a temporary restraining order is available only where

the mover proves all four of the following elements: (1) a

substantial likelihood of success on the merits; (2) a substantial

threat that failure to grant the injunction will result in

irreparable injury; (3) that the threatened injury outweighs any

damage that the injunction may cause the opposing party; and (4)

that the injunction will not disserve the public interest. See,

e.g., Clark v. Prichard, 812 F.2d 991, 993 (5th Cir. 1987) (first

citing Canal Authority of the State of Florida v. Callaway, 489

F.2d 567 (5th Cir. 1974); and then citing Mississippi Power and

Light Co. v. United Gas Pipeline, 760 F.2d 618, 621 (5th Cir.

1985)).

LAW AND ANALYSIS

The Court first considers whether Plaintiffs have carried the

burden of showing element two - a substantial threat of irreparable

injury. “An injury is ‘irreparable’ only if it cannot be undone

through monetary remedies.” Deerfield Medical Center v. City of

Deerfield Beach, 661 F.2d 328, 338 (5th Cir. 1981) (first citing

Spiegel v. City of Houston, 636 F.2d 997 (5th Cir. 1981); and then

citing Parker v. Dunlop, 517 F.2d 785, 787 (5th Cir. 1975)).

Plaintiffs assert they are suffering irreparable injury by

“accruing costs in arbitration which are an unnecessary expense”

where the Contract is an absolute nullity. Rec. Doc. 4-1 at 3. In

response, Defendants argue that Plaintiffs’ admission that their

irreparable injury is expenses they will incur in the arbitration

proceeding is “fatal” to their Motion. Rec. Doc. 10 at 5. We agree.

Defendants cite City of Meridian, Miss. V. Algernon Blair,

Inc., where the Fifth Circuit stated that the “expense of

inappropriate arbitration” does “not constitute irreparable harm.”

Rec. Doc. 10 at 4 (citing City of Meridian, Miss. V. Algernon

Blair, Inc.,721 F.2d 525, 529 (5th Cir. 1983)). Plaintiffs aver

that City of Meridian is distinguishable because in that case,

there was a genuine contract dispute regarding the scope of the

work; whereas in this case, Plaintiffs argue the contract does not

exist whatsoever because it is absolutely null due to fraud. Rec.

Doc. 14 at 2. The argued distinction, however, does not make a

material difference in the reasoning and result.

Plaintiffs’ argument does not change the principle that an

injury which can be undone through monetary remedies is not

“irreparable.” Additionally, Plaintiffs’ argument that the

Contract is absolutely null due to fraud is a defense to Defendant

ARS’s breach of contract claim in the arbitration proceeding.

Plaintiffs have provided no reason why this defense cannot be

raised before the American Arbitration Association. Nor has this

Court found one. This Court has, however, found evidence that

Plaintiffs would have an opportunity to present its defense to the

arbitrator,8 “and to the courts if there was an unfavorable

8 For instance, under the American Arbitration Association’s Construction

Industry Arbitration Rules-which govern the parties’ arbitration proceeding-

“[t]he arbitrator shall have the power to determine the existence or validity

of a contract of which an arbitration clause forms a part. Such an arbitration

clause shall be treated as an agreement independent of the other terms of the

decision. If a legal challenge proved successful, [Plaintiffs]

obviously would not be bound by the finding or conclusions of the

arbitrator[,]” City of Meridian, 721 F.2d at 529.

The Court finds that Plaintiffs have not made a showing of

irreparable injury sufficient to merit issuance of the

“extraordinary” and “rarely issued” relief of a temporary

restraining order. Treen v. Brown, No. 10-3359, 2010 WL 4027714,

at *1 (E.D. La. Oct. 13, 2010). Thus, it is unnecessary to consider

the other factors for issuance of a temporary restraining order.

CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion for Temporary

Restraining Order (Rec. Doc. 4) is DENIED.

IT IS FURTHER ORDERED that Defendants’ ex parte Motion for

Leave to File Opposition to Plaintiffs’ Motion for Temporary

Restraining Order (Rec. Doc. 6) is DISMISSED as MOOT.

IT IS FURTHER ORDERED that Plaintiff’s Motion to Reassign the

Submission Date for its Motion for Preliminary Injunction (Rec.

Doc. 9) in the above-captioned matter is DISMISSED as MOOT.

New Orleans, Louisiana this 13th day of October, 2023

___________________________________

SENIOR UNITED STATES DISTRICT JUDGE

contract.” AAA Constr. Indus. Arb. Rules and Mediation Proc. Rule 9(b) (2015),

https://www.adr.org/Rules.