A federal trial court judge in Phoenix denied a plaintiff’s attempt to freeze an opponent’s assets before trial. The Court’s reasonings offer a useful roadmap for what to do and what to avoid when attempting to lock down assets early in commercial litigation.
An Arizona tech services company (Clutch) sued its vendor (Acronis) claiming Acronis kept charging them roughly $800K in monthly fees even after their underlying deal fell apart. Clutch wanted the court to freeze Acronis’s assets before trial so there’d be something to collect if they won as litigation can take a long time. What could diminish the debtor’s assets during the litigation is a concern.
The judge denied Clutch’s request because Clutch couldn’t convince the court that their case was strong enough to justify that kind of drastic pretrial action.
Before freezing anyone’s assets, an Arizona court wants to know: does this plaintiff have a good shot at winning? Not a slam dunk or a certainty. But a genuine, reasonable chance. It is what case law calls a “good chance” or “substantial likelihood” of success. Think of it as a mini preview of the case before all the discovery is done. It needs to be real evidence, not just a well-written complaint that is filed with the Court. That’s the bar. It sounds manageable, but this recent Arizona court order shows how easy it is to fall short.
The court found Clutch was not entitled to a provisional remedy for a few reasons. First, Clutch couldn’t justify the benefits it received. Clutch broadly argued: “We paid $800K and got nothing for it.” The problem? Acronis came in with receipts showing Clutch received six figures worth of products, services, and other benefits. Clutch tried to wave this off as “de minimis” compared to what they paid. The court rejected that argument. The lesson: in any unjust enrichment case, understand the benefits question. If the client received anything of value during the relationship including products, services, access, marketing, etc., there must be a compelling explanation for why that doesn’t justify the amount they paid.
The court also denied Clutch’s application because an unjust enrichment claim only survives when there’s no enforceable contract governing the dispute. Clutch said the deal was dead. Acronis said the parties were operating under an ongoing arrangement and pointed to years of conduct to prove it. The judge found this to be genuinely unresolved. If the court can’t tell whether a contract existed or not, it’s not going to freeze somebody’s bank account or assets in the interim. Ambiguity kills provisional remedies. The lesson: if pursuing unjust enrichment and the other party can point to any signed document, course of dealing, or ongoing performance that appears contract-like, that must be addressed at the onset.
When applying for a provisional remedy, a supporting affidavit must be filed, and it must be airtight. This order reinforces how seriously Arizona courts take the paperwork requirements. The person signing the affidavit needs to have actual personal knowledge of what they’re swearing to. It cannot be a statement such as, “I reviewed the file and believe the following.” If it reads like a legal brief with a signature block, it’s probably not good enough.
The evidentiary standard for provisional remedies is high, and the procedural hurdles that follow are likewise expensive and complicated. To get a prejudgment attachment in Arizona requires posting a bond for at least the full amount being sued for. And an evidentiary hearing is likely to follow. The debtor can demand a hearing before any assets get frozen. This results in a “mini trial” at the beginning of the case often before any discovery is done.
The bottom line: The court will be looking at declarations, documents, and arguments, not just briefing. There needs to be real evidence that the creditor is likely to win, a clean statutory basis for the remedy, and an honest accounting of what the creditor received out of the relationship.
