Preliminary Injunction Orders Must Remain Nonfinal Absent Rule 65(a)(2) Consolidation Notice

Case: Dillinger's LLC, a Wyoming Limited Liability Company and Ryan Clement, an Individual v. CR-GTD, LLC, a Wyoming Limited Liability Company and EFTI, LLC, a Wyoming Limited Liability Company
Citation: 2026 WY 95 (Wyo. Aug. 25, 2026)

1. Introduction

This appeal arose from a business-governance dispute within a Wyoming LLC that operates horse racing and off-track betting in Wyoming. Dillinger’s LLC (49% member) and its principal, Ryan Clement, challenged a district court’s preliminary injunction entered in favor of EFTI, LLC (51% member) and the company (originally “Cowboy Racing, LLC,” later “CR-GTD, LLC”).

The core controversy was managerial control: EFTI purported to remove Clement as a Manager under the Operating Agreement, while Clement continued to communicate with third parties as if he had authority. EFTI and the company sued for declaratory relief (among other claims) and sought a preliminary injunction to prevent Clement from holding himself out as a Manager during litigation.

On appeal, Clement did not principally attack the classic injunction elements (irreparable harm and likelihood of success). Instead, he argued the district court improperly “decided the case” at the preliminary injunction stage by definitively interpreting the Operating Agreement and ruling his removal was lawful—without notice, discovery, or consolidation of the injunction hearing with a trial on the merits.

2. Summary of the Opinion

The Wyoming Supreme Court affirmed. It held:

  • A district court may interpret an Operating Agreement as part of determining whether the movant is likely to succeed on the merits for preliminary injunction purposes.
  • The district court should not have phrased its preliminary injunction order as a final merits conclusion (because the hearing was not consolidated with a trial on the merits under W.R.C.P. 65(a)(2) and the parties had no consolidation notice).
  • The problematic phrasing did not require reversal because the record supported a reasonable preliminary determination that EFTI and the company were likely to succeed on the declaratory judgment claim: Section 5.4 and Section 5.11 could be reconciled and were not ambiguous, and EFTI’s written actions constituted “express written consent” of the Majority Interest to remove Clement.
  • The injunction was preliminary only; the parties remain free to conduct discovery and litigate the merits at trial.

3. Analysis

3.1 Precedents Cited

The Court’s reasoning was built from Wyoming injunction doctrine, procedural limits on converting preliminary proceedings into final merits adjudications, and general contract-interpretation principles.

A. Injunction standards and appellate review framework

  • Degenfelder v. Wyo. Educ. Ass'n, 2026 WY 54, ¶¶ 19–20, 42, 589 P.3d 346, 353–54, 358 (Wyo. 2026): Confirmed that preliminary injunctions are equitable; review is for abuse of discretion; purpose is preserving the status quo; movant must show probable success on the merits and possible irreparable injury.
    Influence here: The Court treated the district court’s ruling through this lens—asking whether it could reasonably find likely success and irreparable harm, not whether the merits were finally proven.
  • Brown v. Best Home Health & Hospice, LLC, 2021 WY 83, ¶¶ 7, 9, 10–31, 12–13, 491 P.3d 1021, 1026–32 (Wyo. 2021): Provided the modern template: (1) injunction preserves status quo; (2) irreparable injury includes harms not readily compensable in money; (3) courts may interpret contracts to evaluate likelihood of success; and critically, (4) it is improper to phrase a preliminary injunction ruling as a final merits conclusion absent consolidation.
    Influence here: Brown is the direct analogue: the Court used it both to criticize the district court’s “final” phrasing and to uphold the injunction because the only proper appellate question is likelihood of success, not final contract meaning.
  • Pagel v. Franscell, 2002 WY 169, ¶ 7, 57 P.3d 1226, 1229 (Wyo. 2002) (quoted in Brown): Defined “clearly erroneous” findings.
  • Wyo-Ben, Inc. v. Van Fleet, 2015 WY 146, ¶¶ 20, 31, 361 P.3d 852, 858, 861 (Wyo. 2015) (cited in Brown): Directed appellate courts to view evidence in the light most favorable to the prevailing party on injunction review.
  • Olsen v. Olsen, 2011 WY 30, ¶ 8, 247 P.3d 77, 80 (Wyo. 2011): Held that without a transcript or proper substitute, appellate courts presume the district court’s decision is reliable and supported.
    Influence here: Because the injunction hearing was unreported and no W.R.A.P. 3.03 statement was prepared, the Supreme Court presumed the written order accurately reflected the oral ruling and that evidence supported it.

B. Limits on converting preliminary injunction proceedings into final merits adjudication

  • Simpson v. Petroleum, Inc., 548 P.2d 1, 2–3 (Wyo. 1976): (1) Generally, preliminary injunctions should not grant the principal relief without trial; (2) consolidation under W.R.C.P. 65(a)(2) requires “some form of notice” so parties can present their full case.
    Influence here: This case supplied the Court’s procedural critique: absent consolidation notice, parties arrive expecting only an injunction hearing, not final declaratory judgment adjudication.
  • Univ. of Texas v. Camenisch, 451 U.S. 390, 395, 101 S. Ct. 1830, 1834, 68 L. Ed. 2d 175 (1981): Federal counterpart authority requiring “clear and unambiguous notice” before consolidating an injunction hearing with a merits trial under F.R.C.P. 65(a)(2).
    Influence here: Reinforced Simpson and underscored that consolidation is the exception, not the default; absent notice, a preliminary ruling must remain preliminary.

C. Contract interpretation and ambiguity doctrine

  • Jones v. Young, 2025 WY 130, ¶¶ 44–46, 580 P.3d 1026, 1038 (Wyo. 2025): Stated de novo review for contract interpretation and defined ambiguity.
  • Morrison v. Hinson-Morrison, 2024 WY 96, ¶ 16, 555 P.3d 944, 952 (Wyo. 2024) (quoted in Jones): Reaffirmed “plain meaning” and “four corners” approach when unambiguous.
  • Van Vlack v. Van Vlack, 2023 WY 104, ¶ 20, 537 P.3d 751, 757 (Wyo. 2023): Referenced for the ambiguity inquiry.
  • Purcella v. Purcella, 2011 WY 124, ¶ 14, 258 P.3d 730, 734–35 (Wyo. 2011): Directed courts to construe contracts as a whole, avoid rendering provisions meaningless, and reconcile apparent conflicts where reasonable.
    Influence here: This reconciliation principle was decisive: the Court harmonized Section 5.4 and Section 5.11 rather than deeming them “irreconcilably conflicting.”
  • Larson v. Burton Constr., Inc., 2018 WY 74, ¶ 37, 421 P.3d 538, 549 (Wyo. 2018) (Kautz & Davis, JJ., dissenting), quoting Klapp v. United Ins. Grp. Agency, Inc., 468 Mich. 459, 467, 663 N.W.2d 447, 453 (2003): Observed that irreconcilable internal conflicts can create ambiguity.
    Influence here: Provided Clement’s legal hook (conflict = ambiguity) but the Court held the provisions here were reconcilable, so ambiguity did not arise.

D. Persuasive authorities on interpreting operating agreements at the injunction stage

  • Lengyel-Fushimi v. Bellis, 242 A.D.3d 727, 730–32 (N.Y. App. Div. 2025): Example of interpreting an operating agreement when assessing likelihood of success for injunction relief.
  • Apple Glen Crossing, LLC v. Trademark Retail, Inc., 784 N.E.2d 484, 488–90 (Ind. 2003): Similar use of operating agreement interpretation in preliminary injunction analysis.
    Influence here: Helped normalize the Court’s holding that a judge may interpret an operating agreement to assess “likely success,” without thereby issuing a final merits adjudication.

E. “Affirm on any ground in the record” principle

  • Blair v. State, 2022 WY 121, ¶ 22, 517 P.3d 597, 602 (Wyo. 2022): The Court may affirm “on any legal ground appearing in the record.”
    Influence here: Supported the Court’s note that even if Section 5.4 analysis were questioned, the record also supported likely success under Section 5.11 (“for cause”) as an alternative basis to affirm.

3.2 Legal Reasoning

A. The Court reframed the “procedural irregularity” argument

Clement’s principal complaint was not that the injunction elements were unmet, but that the district court effectively granted final declaratory relief (a conclusive interpretation of the Operating Agreement) at the preliminary stage. The Supreme Court agreed in part: the district court “should not have” phrased its order as a final conclusion that Clement “has been lawfully removed.”

Yet the Court treated that phrasing error as a correctable characterization problem, not a structural defect requiring reversal. Relying on Brown v. Best Home Health & Hospice, LLC, it emphasized the proper function of a preliminary injunction order: to determine whether the movant is likely to succeed—not to enter final judgment—unless the court has consolidated proceedings under W.R.C.P. 65(a)(2) with proper notice.

B. Consolidation requires notice; absent notice, the ruling remains preliminary

Invoking Simpson v. Petroleum, Inc. and Univ. of Texas v. Camenisch, the Court reiterated that consolidation under Rule 65(a)(2) demands “some form of notice” (indeed “clear and unambiguous notice” in the federal formulation). Here, nothing indicated the district court provided such notice. Therefore, the injunction proceeding could not validly become a final merits adjudication.

Crucially, rather than reversing, the Court clarified the legal effect: despite its phrasing, the order is treated as a preliminary ruling applicable only to interim relief, leaving the parties free to develop facts and present competing interpretations at trial.

C. Interpreting the Operating Agreement was necessary to assess likelihood of success

The Court then answered the controlling appellate question: could the district court reasonably conclude EFTI and the company were likely to succeed on the declaratory judgment claim? That inquiry necessarily required interpreting the Operating Agreement—just as Wyoming courts do when evaluating injunction requests involving contractual restrictions (as in Brown).

D. No ambiguity: Sections 5.4 and 5.11 are reconcilable

Clement argued Sections 5.4 and 5.11 conflicted: Section 5.11 lists “for cause” grounds; Section 5.4 was construed to allow removal without cause with Majority Interest consent. The Supreme Court applied standard Wyoming contract rules (plain meaning; four corners; reconcile provisions if possible) and held there was no irreconcilable conflict.

The reconciliation the Court adopted:

  • Section 5.11 provides a “for cause” pathway (gross negligence, fraud, deceit, or intentional misconduct with material adverse effect; or adjudicated incompetency) at a meeting called expressly for removal.
  • Section 5.4 functions as a limitation on a Manager’s authority: absent Majority Interest “express written consent,” a Manager cannot cause Clement’s removal “for any reason other than for cause” while specified financial conditions persist. By implication, Majority Interest consent authorizes a without-cause removal under that section during that period.

Reading the Operating Agreement as a whole (per Purcella v. Purcella), these are “two alternative methods” rather than contradictory commands. Hence, the district court did not err in preliminarily finding the agreement unambiguous.

E. Record support for likely success under Section 5.4 (and alternatively Section 5.11)

Viewing the record in the light most favorable to the prevailing parties, the Court found sufficient evidence of compliance with Section 5.4: EFTI held 51% (Majority Interest), convened a special meeting to remove Clement, voted to remove him, and memorialized its consent in signed meeting minutes and a signed June 2025 resolution. Those documents constituted “express written consent” by the Majority Interest holder.

The Court also signaled an alternative affirmance rationale: the same record could support a “for cause” removal theory under Section 5.11, and under Blair v. State, the Court may affirm on any legal ground appearing in the record.

F. Appellate posture reinforced deference: no transcript

The evidentiary hearing was not reported, and Clement did not supply a W.R.A.P. 3.03 statement. Under Olsen v. Olsen, the Supreme Court presumed the district court’s findings reflected competent evidence—making it harder to overturn the injunction on fact-dependent grounds.

3.3 Impact

A. Practical rule for trial courts: avoid “final merits” language in preliminary injunction orders

The opinion reinforces a drafting/characterization discipline: even when a court must interpret a contract to assess “likelihood of success,” the order should be expressly preliminary unless the court has provided Rule 65(a)(2) consolidation notice and allowed a full merits presentation. Orders that declare a party “lawfully removed” risk confusion and appellate challenge, even if the injunction is ultimately affirmed.

B. Governance disputes in LLCs: operating agreement interpretation can be decided (preliminarily) early

For LLC management-control disputes, the case confirms Wyoming courts may interpret an operating agreement at the preliminary injunction stage to prevent ongoing operational and reputational harm—particularly where one faction continues to hold itself out as authorized to bind the entity. That will likely encourage early injunctive motions in control contests, especially where regulatory licensing, goodwill, or third-party reliance is implicated.

C. Litigation strategy: preserve the record

The opinion is also a cautionary tale: without a hearing transcript or W.R.A.P. 3.03 substitute, appellants face a presumption that the district court’s evidentiary basis was adequate. This procedural reality can be outcome-determinative in injunction appeals where factual nuances matter.

D. Contract drafting signal: “limitations on authority” provisions can operate as removal mechanisms

The Court’s harmonization analysis indicates that “limitations on authority” clauses—especially those keyed to “Majority Interest” consent— can be construed to create an alternative, without-cause removal path even when a separate “for cause” removal section exists. Drafters who intend otherwise should clarify whether “for cause” is exclusive, whether “without cause” is permitted, and who may initiate removal.

4. Complex Concepts Simplified

  • Preliminary injunction: A temporary court order designed to keep things stable (“preserve the status quo”) until the case is decided.
  • Likelihood of success on the merits: The judge does not decide who ultimately wins; the judge assesses whether the plaintiff is likely to prove its claim later.
  • Irreparable harm: Harm that cannot be adequately fixed with money damages (e.g., loss of goodwill, reputational injury, business disruption, potential licensing consequences).
  • W.R.C.P. 65(a)(2) consolidation: A procedure that allows the court to merge the injunction hearing with an expedited trial on the merits—but only with notice sufficient to let parties fully present their cases.
  • Ambiguity and “four corners”: If contract language is clear, courts enforce it based on the document alone, not outside evidence. If provisions truly cannot be reconciled, the contract may be ambiguous.
  • Express written consent / Majority Interest: Written approval by members holding more than 50% of the ownership interests.
  • Abuse of discretion (injunction review): The appellate court asks whether the trial court’s decision was reasonable, not whether the appellate court would have ruled differently.
  • Bond (W.R.C.P. 65(c)): Security posted by the party getting the injunction to cover costs/damages if the injunction later turns out to have been wrongful.

5. Conclusion

2026 WY 95 clarifies an important boundary in Wyoming injunction practice: a district court may interpret an operating agreement to evaluate “likelihood of success,” but—absent Rule 65(a)(2) consolidation with notice—it must not convert that preliminary assessment into a final merits adjudication through conclusive language. Even when a trial court uses overly final phrasing, the dispositive appellate question remains whether the injunction was supportable as a preliminary measure.

Substantively, the Court’s contract analysis provides a blueprint for harmonizing multiple removal provisions within an LLC operating agreement, treating “for cause” removal and “majority-consent” removal as alternative pathways when the text can reasonably be read that way. Procedurally, the decision underscores the value of a complete appellate record and the limited role of preliminary injunctions in resolving business-control disputes.