Opinion
9913N Index 655978/18
09-24-2019
SUSSMAN EDUCATION, INC., Plaintiff–Respondent, v. Eric GORENSTEIN, Defendant–Appellant, M. Infantino & Associates, Inc. doing business as Educational Resource Company, Defendant.
Shapiro Litigation Group PLLC, New York (Alison B. Cohen and David J. Shapiro of counsel), for appellant. Akerman LLP, New York (Jeffrey A. Kimmel of counsel), for respondent.
Shapiro Litigation Group PLLC, New York (Alison B. Cohen and David J. Shapiro of counsel), for appellant.
Akerman LLP, New York (Jeffrey A. Kimmel of counsel), for respondent.
Acosta, P.J., Manzanet–Daniels, Mazzarelli, Webber, Moulton, JJ.
Order, Supreme Court, New York County (Andrew Borrok, J.), entered December 21, 2018, which, inter alia, granted plaintiff's motion for a preliminary injunction restraining defendant Eric Gorenstein, until August 24, 2020, from soliciting or attempting to solicit certain entities to do business with defendant M. Infantino & Associates, Inc. d/b/a Educational Resource Company, unanimously reversed, on the law, without costs, and the motion denied.
The party seeking a preliminary injunction must make a "clear showing of a likelihood of success on the merits, irreparable harm if the injunction [i]s not granted, and a balance of equities in its favor" ( Sterling Fifth Assoc. v. Carpentille Corp. , 5 A.D.3d 328, 329, 774 N.Y.S.2d 140 [1st Dept. 2004] ). Plaintiff failed to make such a showing.
To show a likelihood of success on the merits, plaintiff had to demonstrate that the restrictive covenant signed by Gorenstein was enforceable (see Buchanan Capital Mkts., LLC v. DeLucca , 144 A.D.3d 508, 41 N.Y.S.3d 229 [1st Dept. 2016] ). A covenant not to compete is not enforceable "when the party benefited was responsible for the breach of the contract containing the covenant" ( Cornell v. T.V. Dev. Corp. , 17 N.Y.2d 69, 75, 268 N.Y.S.2d 29, 215 N.E.2d 349 [1966] ). Gorenstein submitted an affidavit stating plaintiff owed him $42,520 in commissions. In reply, plaintiff's president submitted an affidavit saying Gorenstein's termination was unrelated to commissions, but he did not deny that plaintiff owed Gorenstein commissions.
Separate and apart from the issue of plaintiff's breach, the covenant prohibits Gorenstein from soliciting "any Person who is a publisher, K–12 school or business relation of [plaintiff], whether or not [he] had personal contact with such Person." This is overbroad (see Brown & Brown, Inc. v. Johnson , 25 N.Y.3d 364, 370–371, 12 N.Y.S.3d 606, 34 N.E.3d 357 [2015] ; Good Energy, L.P. v. Kosachuk , 49 A.D.3d 331, 332, 853 N.Y.S.2d 75 [1st Dept. 2008] ). The covenant is also overbroad in that it contains no geographical restriction (see Good Energy , 49 A.D.3d at 332, 853 N.Y.S.2d 75 ; Crippen v. United Petroleum Feedstocks , 245 A.D.2d 152, 153, 666 N.Y.S.2d 156 [1st Dept. 1997] ; Garfinkle v. Pfizer, Inc. , 162 A.D.2d 197, 556 N.Y.S.2d 322 [1st Dept. 1990] ). Even if plaintiff and the court could narrow the geographical area in the injunction (compare Crippen , 245 A.D.2d at 153, 666 N.Y.S.2d 156, with Willis of N.Y. v. DeFelice , 299 A.D.2d 240, 241–242, 750 N.Y.S.2d 39 [1st Dept. 2002] ), neither plaintiff nor the court narrowed the scope of the anti-solicitation provision.
It was also an improvident exercise of the court's discretion to grant a preliminary injunction where the conflicting affidavits raised sharp issues of fact (see e.g. Residential Bd. of Mgrs. of Columbia Condominium v. Alden , 178 A.D.2d 121, 123, 576 N.Y.S.2d 859 [1st Dept. 1991] ), including whether plaintiff terminated Gorenstein for cause (see Buchanan Capital Mkts., LLC , 144 A.D.3d at 508–509, 41 N.Y.S.3d 229 ), and whether the contact information for plaintiff's clients was confidential (see e.g. Samuel–Rozenbaum USA v. Felcher , 292 A.D.2d 214, 215, 741 N.Y.S.2d 1 [1st Dept. 2002] ).
In light of plaintiff's failure to make a clear showing of a likelihood of success on the merits, it is unnecessary to reach the issues of irreparable injury and balance of the equities (see Sterling Fifth Assoc. , 5 A.D.3d at 329, 774 N.Y.S.2d 140 ). Were we to consider these points, we would note that plaintiff's president was able to quantify plaintiff's loss of business (see Buchanan Capital Mkts., LLC , 144 A.D.3d at 509, 41 N.Y.S.3d 229 ; Perez v. Computer Directions Group , 177 A.D.2d 359, 576 N.Y.S.2d 114 [1st Dept. 1991] ). Furthermore, the relative hardship to Gorenstein if an injunction is granted appears to be greater than that to plaintiff if the injunction is denied (see Barbes Rest. Inc. v. ASRR Suzer 218, LLC , 140 A.D.3d 430, 432, 33 N.Y.S.3d 43 [1st Dept. 2016] ), and the preliminary injunction changed the status quo (see e.g. Buchanan Capital Mkts., LLC , 144 A.D.3d at 509, 41 N.Y.S.3d 229 ).