Fort Myer Constr. Corp v. Shrensky

1

FORT MYER CONSTRUCTION CORPORATION, Plaintiff, v. LEWIS F. SHRENSKY, Defendant.

Civil Action No. 1:23-cv-02275 (CJN)

United States District Court, District of Columbia

January 17, 2024

MEMORANDUM OPINION

CARL J. NICHOLS UNITED STATES DISTRICT JUDGE

Lewis Shrensky claims that his termination by Fort Myer Construction Corporation was improper. He seeks a preliminary injunction temporarily reinstating him. See Mot. for Prelim. Inj., ECF No. 12. He also seeks to disqualify Fort Myer's counsel. See Mot. to Disqualify, ECF No.7. For the following reasons, the Court denies both motions.

I. Background

This case arises out of a dispute between movant, Lewis Shrensky and the business he helped found a half century ago, Fort Myer Construction Corporation. Countercl. ¶ 6, ECF No 11. Until recently, Shrensky was Fort Myer's executive vice president; the company's co-founder, Jose Rodriguez, is its president. Shrensky's and Rodriguez's revocable trusts each hold 50% of the company's voting shares. Countercl. ¶¶ 12-13. And the pair comprises half of the company's four-person board of directors. Countercl. ¶ 11.

For decades Shrensky and Rodriguez “maintained a close personal friendship throughout their years of running one of the most successful paving and infrastructure contracting companies in the region.” Countercl. ¶ 16. What changed is disputed. Shrensky contends that Rodriguez's daughter improperly inserted herself into the company and along with others conspired to oust Shrensky, leading to his termination. See Mem. in Supp. of Mot. for Prelim. Inj. at 3-10, ECF No. 13 (“Shrensky's Br.”). Fort Myer asserts that Shrensky is the one who attempted a power grab, including by forging Rodriguez's signature on a consent resolution in an effort to gain further authority within the company. Mem. in Opp. To Mot. for Prelim Inj. at 4-8, ECF 16 (“Fort Myer's Br.”). The company alleges that Shrensky also forged Rodriguez's signature on several other agreements and engaged in other erratic behavior, such as threatening to “burn the company to the ground,” threatening to seek judicial dissolution of the company, and interfering with Fort Myer's banking relationships. Id. at 8-16. Fort Myer says that it fired Shrensky because of this misconduct.

What is clear is that Shrensky was fired and litigation ensued. This case began when Fort Myer sued Shrensky for breach of fiduciary duty and tortious interference with contractual relations. See generally Compl., ECF 1. After moving to disqualify Fort Myer's counsel, Shrensky filed a counterclaim alleging wrongful termination and related theories. See generally Countercl. He also moved for a preliminary injunction. See Mot. for Prelim. Inj. The motion seeks (1) “an order that Fort Myer's termination of Mr. Shrensky was ultra vires and in violation of the Fort Myer Bylaws and his Employment Agreement”; (2) “an order reinstating Mr. Shrensky as Fort Myer's Executive Vice President”; and (3) “an order reinstating Mr. Shrensky as an authorized signatory on all Company bank and other accounts.” Id. at 3.

Shrensky's theory is that Fort Myer lacked authority to fire him. He points primarily to three documents. First, he claims that his firing violated his employment agreement. See Shrensky's Br. at 13-15. That agreement states that “[s]ubject to the provisions for termination as hereinafter provided . . . this Agreement shall automatically be renewed on a month-to-month basis unless either party gives the other written notice to terminate, which must be given at least sixty (60) days prior to the intended termination date.” Ex. 12, Countercl. at ¶ 2. Later on, the agreement states that “termination of employment . . . shall occur upon the happening of” a series of events, for example if he “fails or refuses to comply with the reasonable policies, standards, and regulations of” Fort Myer; if he conducts himself in an “unethical, immoral, or fraudulent manner”; or if he “discredits [Fort Myer] or is detrimental to the reputation, character and standing of” the company. Id. at ¶ 12. Shrensky argues that Fort Myer violated the agreement by terminating him without 60 days' notice. See Shrensky's Br. at 13-15. Fort Myer responds by, among other things, contending that the 60-day notice provision is for termination without cause, and that termination for cause (under one of the enumerated scenarios) can be done without notice. Fort Myer's Br. at 24.

Shrensky also relies on the company's bylaws, which state that “[a]ny officer elected or appointed by the Board of Directors may be removed with or without cause at any time by the affirmative vote of a majority of the whole Board of Directors.” Ex. 3, Countercl. Shrensky argues that he is a qualifying officer and that the company violated the bylaws by firing him without a vote of the Board. Shrensky's Br. at 14-15. Along with other arguments, Fort Myer points out that the provision says “may” and suggests that a Board vote was not required because this bylaw provision does not provide the sole route for removing an officer. Fort Myer's Br. at 18-23.

Finally, Shrensky relies on a 2019 consent resolution that states that the “Executive VicePresident shall share equally the powers vested in the office of President.” Ex. 5, Countercl. Shrensky posits that if he and the President are co-equals, neither has the authority to fire the other, making his firing improper. See Shrensky's Br. at 15. Fort Myer says that the consent resolution does not do what Shrensky claims, and is, in any event, ineffective because Shrensky forged some of the required signatures. Fort Myer's Br. at 25-26.

II. Motion for Preliminary Injunction

A. Legal Standards

“A preliminary injunction is an extraordinary remedy that should be granted only when the party seeking the relief, by a clear showing, carries the burden of persuasion.” Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir. 2004) (citing Mazurek v. Armstrong, 520 U.S. 968, 972 (1997)). A plaintiff seeking such relief must demonstrate that (1) it has a likelihood of succeeding on the merits, (2) it faces irreparable harm if an injunction does not issue, (3) the balance of equities favors relief, and (4) an injunction is in the public interest. Winter v. Nat'l Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).

A plaintiff must make “a clear showing that” it is “entitled to such relief.” Winter, 555 U.S. at 22. And while the Court of Appeals has not yet directly held that a plaintiff must make a clear showing on each of the four Winter factors, considered dicta in this jurisdiction favors that approach. See In re Navy Chaplaincy, 738 F.3d 425, 428 (D.C. Cir. 2013) (demanding proof on all four prongs); Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1296 (2009) (Kavanaugh, J., concurring) (observing that, after Winter, “the old sliding-scale approach to preliminary injunctions-under which a very strong likelihood of success could make up for a failure to show a likelihood of irreparable harm . . . is no longer . . . viable” (citations omitted)).

Regardless, it is clear that the movant must establish irreparable harm. “The basis for injunctive relief in the federal courts has always been irreparable harm and the inadequacy of legal remedies.” Wis. Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985) (quoting Sampson v. Murray, 415 U.S. 61, 88 (1974)); see also 1 Joseph Story, Commentaries on Equity Jurisprudence as Administered in England and America § 33, at 32 (4th ed. 1846) (explaining that equity jurisdiction attaches “where a plain, adequate, and complete remedy cannot be had” through legal remedies). “A movant's failure to show any irreparable harm is therefore grounds for refusing to issue a preliminary injunction, even if the other three factors entering the calculus merit such relief.” Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006); see Winter, 555 U.S. at 21-22.

“[P]roving ‘irreparable' injury is a considerable burden, requiring proof that the movant's injury is ‘certain, great and actual-not theoretical-and imminent, creating a clear and present need for extraordinary equitable relief to prevent harm.'” Power Mobility Coal. v. Leavitt, 404 F.Supp.2d 190, 204 (D.D.C. 2005) (quoting Wis. Gas, 758 F.2d at 674). In addition, “the certain and immediate harm that a movant alleges must also be truly irreparable in the sense that it is ‘beyond remediation.'” Elec. Priv. Info. Ctr. v. U.S. Dep't of Just., 15 F.Supp.3d 32, 44 (D.D.C. 2014) (quoting England, 454 F.3d at 297). The movant must “substantiate the claim that irreparable injury is likely to occur” and “provide proof . . . indicating that the harm is certain to occur in the near future.” Wis. Gas Co., 758 F.2d at 674. That is because “[i]ssuing a preliminary injunction based only on a possibility of irreparable harm is inconsistent with [the Supreme Court's] characterization of injunctive relief as an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter, 555 U.S. at 22.

B. Analysis

The “cases are legion holding that loss of employment does not constitute irreparable injury.” Farris v. Rice, 453 F.Supp.2d 76, 79 (D.D.C. 2006) (citation omitted). Recognizing this, Shrensky contends that his loss of employment is special. The Court is not convinced.

1. Shrensky first argues that “Fort Myer's unlawful termination” and “public accusations of serious wrongdoing” are causing him “serious reputational harm.” Shrensky's Br. at 16. It is true that “harm to reputation can in certain circumstances constitute irreparable injury.” Jones v. D.C., 177 F.Supp.3d 542, 546-48 (D.D.C. 2016). “[A]s with all other forms of irreparable harm,” however, “the showing of reputational...