CEZ Prior, LLC, a Minnesota limited liability company v. 755 N Prior Ave. LLC, a Minnesota limited liability company

United States Court of Appeals
For the Eighth Circuit
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No. 24-1389
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CEZ Prior, LLC, a Minnesota limited liability company
Plaintiff - Appellant
v.
755 N Prior Ave. LLC, a Minnesota limited liability company
Defendant - Appellee
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Appeal from United States District Court
for the District of Minnesota
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Submitted: October 24, 2024
Filed: January 24, 2025
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Before GRUENDER, BENTON, and KOBES, Circuit Judges.
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GRUENDER, Circuit Judge.
CEZ Prior, LLC (“CEZ”) challenges the district court’s1 denial of a
preliminary injunction to enjoin a purchase agreement for real property that CEZ
entered into with 755 N Prior Ave., LLC (“Prior”). We affirm.
1 The Honorable Nancy E. Brasel, United States District Judge for the District
of Minnesota.

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I. Background
In December 2022, CEZ entered into a purchase agreement with Prior to
purchase a tract of real property—a large building occupied by numerous
commercial tenants and located at 755 North Prior Avenue, St. Paul, Minnesota—
for $26 million. The purchase agreement required Prior to “reasonably cooperate”
with CEZ to obtain tenant estoppel certificates. A tenant estoppel certificate is a
signed writing by a tenant, certifying that “certain facts are correct, such as that a
lease exists, that there are no defaults, and that rent is paid to a certain date.”
Estoppel Certificate, Black’s Law Dictionary (12th ed. 2024). The parties also
agreed that if CEZ failed to tender cash at closing, Prior could terminate the purchase
agreement.
After signing the purchase agreement, the parties discovered errors in the
tenants’ units’ square footage measurements. These measurements were used to
assess and collect common area maintenance charges for costs like operating
expenses, taxes, and insurance premiums. Because of these errors, some tenants
were behind on rent, and some tenants’ rates would increase. In July 2023, the
parties agreed to amend their purchase agreement, reducing the purchase price from
$26 million to $15.1 million and reducing the cash required at closing from $7.5
million to $3.8 million. The closing date was set for October 30, 2023.
In September 2023, CEZ emailed Prior, asking to delay closing and to “shift
tactics.” It cited its “existing financial situation,” including a “high insurance quote,
the deteriorating [common area maintenance charge] collection and near zero July
31 [net operating income].” It also mentioned “the loss of a key philanthropic
funder.” CEZ requested to delay closing until February or March 2024 and
suggested that it could assume responsibility for gathering the estoppel certificates.
CEZ asserted that the current tenants needed to be informed that their rates would
be increasing under new ownership. Prior did not agree to CEZ’s requests. It
asserted that, under the July 2023 revisions and price cut, CEZ had already assumed
responsibility for any rent deficits caused by the common area maintenance charges.

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Instead, Prior sent CEZ proposed estoppel certificates that did not address the rate
increases.
About a week later, CEZ sent Prior edited estoppel certificates that corrected
the square footage calculations and the tenants’ adjusted rates. CEZ noted that
“these changes may necessitate a difficult discussion with the tenant being asked to
sign,” but that, for CEZ to have confidence in the leases, it would be “critical” to ask
“tenants to acknowledge any past errors made by the landlord’s property managers.”
Prior responded that it disagreed with the edits and asked CEZ how it wished to
proceed. Prior did not explain its reasons at the time but later argued that CEZ’s
proposed changes would have required Prior to renegotiate the terms of nearly fifty
tenant leases. It also suspected CEZ lacked the cash to close and had raised the
estoppel certificate issue as a delay tactic. This email exchange occurred a little over
two weeks before the planned October 30 closing date. On October 30, CEZ
demanded that Prior provide satisfactory tenant estoppel certificates. Two days
later, Prior notified CEZ of its intent to terminate the agreement, alleging that CEZ
had breached by failing to tender cash at closing.
On November 27, CEZ sued Prior in Minnesota state court for breach of
contract. On December 15, CEZ filed a motion to enjoin the termination of the
purchase agreement. Prior removed the case to federal court under diversity
jurisdiction, opposed CEZ’s motion, and counterclaimed for breach of contract. The
next day, CEZ motioned to remand the matter to state court, or in the alternative, for
injunctive relief to enjoin the termination of the purchase agreement. On December
29, the district court stayed the matter until January 31 and scheduled a motions
hearing for January 25. Its order stated: “During the stay, the parties’ rights, claims,
and defenses are preserved including those arising under law or the parties’ written
purchase agreement.” At the January 25 hearing, CEZ withdrew its motion for a
remand, leaving only its motion for a temporary injunction. On January 29, the
district court denied CEZ’s motion for a preliminary injunction.

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II. Discussion
On appeal, CEZ argues that the district court erred by denying a preliminary
injunction. CEZ also argues that the district court erred under Minnesota law when
it did not grant CEZ an additional fifteen days to close under § 559.211 or,
alternatively, two days to close under § 559.21. We have jurisdiction under 28
U.S.C. § 1292(a)(1) to review an interlocutory order denying a preliminary
injunction.
A. Preliminary Injunction
“We review the denial of a preliminary injunction for abuse of discretion.”
D.M. by Bao Xiong v. Minn. State High Sch. League, 917 F.3d 994, 999 (8th Cir.
2019) (internal quotation marks omitted). We review factual findings for clear error
and legal conclusions de novo. Id. “A district court abuses its discretion when it
rests its conclusion on clearly erroneous factual findings or erroneous legal
conclusions.” Id. (internal quotation marks omitted). We will not reverse this
discretionary decision if it “remains within the range of choice available to the
district court, accounts for all relevant factors, does not rely on any irrelevant factors,
and does not constitute a clear error of judgment.” Id. When deciding whether to
grant a preliminary injunction, a district court considers four factors: “(1) the threat
of irreparable harm to the movant; (2) the state of the balance between this harm and
the injury that granting the injunction will inflict on other parties litigant; (3) the
probability that the movant will succeed on the merits; and (4) the public interest.”
Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981) (en banc).
Here, the district court found that the first factor, threat of irreparable harm,
favored CEZ, but it declined to grant a preliminary injunction because the other three
factors favored Prior. Prior does not contest that CEZ faced a threat of irreparable
harm, so we do not address it here.

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We first address the probability of success on the merits, the “most
significant” factor. See Sleep No. Corp. v. Young, 33 F.4th 1012, 1016 (8th Cir.
2022). To succeed, CEZ must demonstrate “a reasonable probability of success, that
is, a fair chance of prevailing” on the merits of its claims. See Kroupa v. Nielsen,
731 F.3d 813, 818 (8th Cir. 2013) (internal quotation marks omitted).
The district court found that CEZ was unlikely to succeed on the merits
because CEZ provided insufficient evidence to demonstrate that Prior had not
reasonably cooperated in obtaining tenant estoppel certificates. The purchase
agreement required Prior to “reasonably cooperate” in obtaining “certificates that
[were] reasonably satisfactory” to CEZ. CEZ’s only proffered evidence of
noncooperation was a single email exchange. This email exchange concluded with
Prior saying: “Please confer with your client and advise as to how they wish to
proceed.”
The district court did not clearly err in finding that the email exchange
“demonstrate[d Prior’s] desire to cooperate.” CEZ argues that Prior’s email
requesting corrections “was not an invitation to cooperate” but “was a direction for
CEZ to consider its options,” because Prior “would not agree to estoppel certificates
that CEZ deemed satisfactory.” This argument fails. CEZ’s only evidence—an
email exchange where Prior rejected CEZ’s edits without explaining its concerns—
does not demonstrate a lack of reasonable cooperation. Further, all proffered
evidence points towards timely and responsive communications from Prior. Prior
was prepared to gather its proposed estoppel certificates, but CEZ rejected those
estoppel certificates and insisted that Prior either: (1) extend the closing date so that
CEZ could gather certificates with its edits included—edits that, it acknowledged,
would “necessitate a difficult conversation with the tenants”—or (2) waive the
estoppel certificate requirement in exchange for Prior altering the payment
arrangement. As the district court put it, “[i]f anything” this email exchange
demonstrates Prior’s “desire to cooperate with CEZ on the tenant estoppel
certificates.” Therefore, we perceive no error in the district court’s finding that CEZ

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failed to demonstrate a reasonable probability of success on the merits of its breach
of contract claim.
We next address whether the district court was correct to find that the balance
of harms did not weigh in CEZ’s favor. “[A] court should flexibly weigh the case’s
particular circumstances to determine whether . . . justice requires the court to
intervene to preserve the status quo.” United Indus. Corp. v. Clorox Co., 140 F.3d
1175, 1179 (8th Cir. 1998). The district court found that the balance of harms
“slightly” favored Prior. On one side, it weighed Prior’s interest in exercising its
rights as owner of the property, including arguments that the ownership dispute
could harm its business and ability to attract tenants. On the other, it weighed CEZ’s
interest in purchasing the property, including questions about whether CEZ could
purchase the property at all. It concluded that, considering the lack of evidence of
CEZ’s ability to pay, “it [was] hard to conclude that the balance of harms weigh[ed]
in favor of CEZ.”
We agree with the district court. CEZ presented only indirect evidence of its
financial ability to close. Further, if CEZ had wished to present financial evidence,
it could have at the motions hearing. Any deficiency in the record could hardly be
considered accidental. Thus, the district court did not err in finding that the balance
of harms favored Prior.
Finally, we address whether the public interest factor weighed in favor of
CEZ. The public has an interest in enforcing valid contracts. See Sleep No., 33 F.4th
at 1019. Because CEZ failed to demonstrate a probability of success on the merits
of its breach of contract claim, we perceive no abuse of discretion in the district
court’s weighing of the public interest factor.
Altogether, even assuming the threat of irreparable harm favored CEZ, the
district court reasonably found that the balance of the factors favored Prior.
Therefore, the district court did not abuse its discretion by denying the preliminary
injunction.

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B. Minnesota Law
CEZ also argues that the district court erred under Minnesota law when it did
not grant CEZ additional time to close on the property—either to fifteen additional
days under § 559.211 or to two remaining days under § 559.21 based on a
purportedly unexpired sixty-day termination deadline.
We first address whether CEZ was entitled to an additional fifteen days to
close. Minnesota law provides that if an “injunction is granted pursuant to this
subdivision, the contract shall not terminate until the expiration of 15 days after the
entry of the order or decision dissolving or modifying the . . . injunction.” Minn.
Stat. § 559.211 subdiv. 1 (2024). Section 559.211 addresses temporary restraining
orders and injunctions for contracts involving real estate transactions. It provides
district courts with the authority “to enter an order temporarily restraining or
enjoining further proceedings to effectuate the termination of the contract.” Id.
CEZ argues that it should have been allowed an additional fifteen days to close
after the January 29 order because the district court’s December 29 stay order was
an injunction. In “its accepted legal sense,” an injunction is an equitable “in
personam” order that requires a party “to do or refrain from doing a particular thing.”
Injunction, Black’s Law Dictionary (12th ed. 2024). On the other hand, a stay is the
“postponement or halting of a proceeding, judgment or the like.” Stay, Black’s Law
Dictionary (12th ed. 2024). District courts have the “inherent power to stay
proceedings.” Cottrell v. Duke, 737 F.3d 1238, 1248 (8th Cir. 2013). A court may
use a stay “to control . . . its docket with economy of time and effort for itself, for
counsel, and for litigants.” Id. (quoting Landis v. N. Am. Co., 299 U.S. 248, 254
(1936)). We determine the nature of an order “by a practical assessment of an
order’s effect and the substance of what the district court intended.” Window World
Int’l, LLC v. O’Toole, 21 F.4th 1029, 1034 (8th Cir. 2022). To do this, we may look
to “the district court’s intent as reflected in its order.” Id.

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Here, the district court’s December 29 stay order provided that “[d]uring the
stay, the parties’ rights, claims, and defenses are preserved including those arising
under law or the parties’ written purchase agreement.” Its January 29 order directly
addressed CEZ’s arguments, explaining that the December 29 order, “was not an
order for injunctive relief” and, moreover, did not “extend[] any statutory deadline
in the event of a denial of injunctive relief.” It “did not intend for such an extension”
and, to find “otherwise would be an amendment to the terms of the Agreement.”
Rather, its December order “was simply a standstill order designed to allow the
parties to develop a more fulsome record for the [c]ourt’s consideration and to enable
the [c]ourt to hold an in-person hearing.”
There can be no question that the district court intended to issue a stay order,
not an injunction. The court’s December 29 order stated that it was imposing a
“stay,” and the court confirmed this straightforward interpretation in its January 29
order. Further, the district court used the order in a way that we are accustomed to
seeing stays used: “to control . . . its docket with economy of time and effort for
itself, for counsel, and for litigants.” See Cottrell, 737 F.3d at 1248. Accordingly,
§ 559.211 does not apply.
Finally, we address whether CEZ was entitled to two remaining days to close
based on § 559.21’s purportedly unexpired termination deadline. Under Minnesota
law, a real estate purchase agreement terminates sixty days after the seller serves a
termination notice. Minn. Stat. § 559.21, subdiv. 2a (2024). Here, the purchase
agreement would have terminated on the deadline of December 31, 2023. The
district court noted in its January 29 order that “the denial of the motion for
injunctive relief puts the parties back into the position they were in on December 29,
2023—making [Prior’s] termination of the Agreement on November 1, 2023
effective.” CEZ argues that the district court erred in finding the termination
effective on the December 31 deadline, asserting that CEZ should have the two
remaining days to close that it would have had on December 29. But CEZ also
concedes that § 559.21’s sixty-day termination deadline only applies “absent a
closing payment or injunction.” As discussed, the district court’s stay order was not

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an injunction. It was an administrative action to pause court proceedings and did not
extend external statutory deadlines. Therefore, the termination deadline remains
unaffected and CEZ is not entitled to an additional two days under § 559.21.
III. Conclusion
For the foregoing reasons, we affirm the judgment of the district court.
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