| Long Is. Assn. for Aids Care, Inc. v Jacinto |
| 2014 NY Slip Op 50490(U) [43 Misc 3d 1204(A)] |
| Decided on March 19, 2014 |
| Supreme Court, Suffolk County |
| Whelan, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Long Island
Association for Aids Care, Inc., LONG ISLAND NETWORK OF COMMUNITY
SERVICES, INC. and BIASHELP, INC., Plaintiffs
against Maria Josephina Jacinto, Defendant. |
ORDERED that this motion (No.001) by the plaintiffs for preliminary injunctive relief is considered under CPLR 6311 and is denied.
The plaintiffs are not-for-profit agencies dependent upon New York State and federal grants, fund-raisers and the support of donors and contributors to fund and conduct their respective missions. The defendant was first employed as a finance director by two of the plaintiffs in June of 2010. She served as the full time Chief Financial Officer of plaintiff, LIAAC, and in that same capacity, part-time for the remaining plaintiffs from July of 2011 until her termination in March 28, 2013. The plaintiffs claim that the defendant's work product was subpar and that she neglected her auditing duties and certain other tasks for which she was responsible, including a failure to discover and report the alleged embezzlement of Agency funds by the former CFO, whom the defendant replaced. The defendant is further charged with challenging the plaintiffs' ethics and compliance with regulations and practices and with uncooperativeness at meetings held in March of 2013.
On March 15, 2013, the defendant was presented with and signed a Confidentiality Statement in which she agreed not to disclose, among other things, client health related information, administrative information such as salaries, internal budgets and the identities of agency contributors. The plaintiffs claim that the defendant violated this statement in or about October of 2013, when, among other things, she allegedly sent to contributors, sponsors and donors of the plaintiffs, a packet containing outdated printed news stories and copies of web printouts detailing investigations and/or audits undertaken by municipal officials due to their concern over the salaries of the CEO, the former CFO of the plaintiffs and board members as well as the interrelation of the three plaintiffs.
In December of 2013, the plaintiffs commenced this action for permanent injunctive relief and for the recovery of damages by reason of defendant's purportedly tortious conduct committed while in the employ of the plaintiffs and after her termination on March 28, 2013. The claims interposed sound in the following: 1) interference with prospective relations; 2) breach of loyalty; [*2]3) breach of contract; 4) breach of fiduciary duty; 5) fraud; and 6) defamation. Money damages and injunctive relief are demanded in all causes of action except the fraud claim wherein only money damages are sought.
By the instant motion, the plaintiffs seek a preliminary injunction enjoining and restraining the defendant from the following: 1) contacting the plaintiffs' contributors, sponsors and donors and tortuously interfering with the plaintiffs' relationship with its contributors, sponsors and donors; 2) disparaging the Agencies to their contributors, sponsors and donors; 3) using the Agencies' confidential information to interfere with the Agencies' relationship to its contributors, sponsors and donors or otherwise disparaging the Agencies including sending false, misleading or disparaging mailings to those contributors, sponsors and donors; 4) contacting and making false and/or misleading accusations to government agencies, legislators or other governmental officials and medical doctors associated with or supervising Agency programs with the sole intention to damage the Agencies, and 5) any other action this court deems proper and just (see Order to Show Cause dated December 20, 2013 [Molia, J]). The plaintiffs' demands for immediate mandatory injunctive relief with respect to the issuance of a handwriting sample and fingerprints were denied by Acting Justice Molia on December 20, 2013 (see id, p.3).
The motion is opposed by the defendant in papers in which the plaintiffs' entitlement to the relief demanded is disputed on factual and legal grounds. For the reasons stated below, the motion is denied.
By statutory fiat, "[a] preliminary injunction may be granted in any action where it appears that the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiff's rights respecting the subject of the action, and tending to render the judgment ineffectual, or in any action where the plaintiff has demanded and would be entitled to a judgment restraining the defendant from the commission or continuance of an act, which, if committed or continued during the pendency of the action, would produce injury to the plaintiff" (CPLR 6301). Appellate case authorities have long pronounced that to prevail on a motion for preliminary injunctive relief, the movant must clearly and convincingly demonstrate a likelihood of success on the merits, the prospect of irreparable harm or injury if the relief is withheld and that a balance of the equities favors the movant's position (see Nobu Next Door, LLC v Fine Arts Hous., Inc., 4 NY3d 839, 800 NYS2d 48 [2008] Aetna Ins. Co. v Capasso, 75 NY2d 860, 862, 552 NYS2d 918 [1990] Greystone Staffing, Inc. v Warner, 106 AD3d 954, 2013 WL 2228792 [2d Dept 2013] Wheaton/TMW Fourth Ave., LP v New York City Dept. of Bldgs., 65 AD3d 1051, 886 NYS2d 41 [2d Dept 2009] Pearlgreen Corp. v Yau Chi Chu, 8 AD3d 460, 778 NYS2d 516 [2d Dept 2004]). The decision to grant a preliminary injunction is committed to the sound discretion of the court, as the remedy is considered to be a drastic one (see Doe v Axelrod, 73 NY2d 748, 536 NYS2d 44 [1988] Tatum v Newell Funding, LLC, 63 AD3d 911, 880 NYS2d 542 [2d Dept 2009] Bergen-Fine v Oil Heat Inst., Inc., 280 AD2d 504, 720 NYS2d 378 [2d Dept 2001]). Consequently, a clear legal right to relief, which is plain from facts presented that are generally undisputed, must be established (see Wheaton/TMW Fourth Ave., LP v New York City Dept. of Bldgs., 65 AD3d 1051, supra; Gagnon Bus Co., Inc. v Vallo [*3]Transp., Ltd., 13 AD3d 334, 786 NYS2d 107 [2d Dept 2004] Blueberries Gourmet v Avis Realty, 255 AD2d 348, 680 NYS2d 557 [2d Dept 1998]).
A movant must satisfy each requirement with " clear and convincing evidence'" (County of Suffolk v Givens, 106 AD3d 943, 967 NYS2d 387 [2d Dept 2013], quoting Apa Sec., Inc. v Apa, 37 AD3d 502, 503, 831 NYS2d 201 [2d Dept 2007]). Factors militating against the granting of preliminary injunctive relief include: 1) the absence of a jurisdictionally proper predicate claim for injunctive relief (see CPLR 6301; BSI, LLC v Toscano, 70 AD3d 741, 896 NYS2d 102 [2d Dept 2010]); 2) that the movant can be fully recompensed by a monetary award or other adequate remedy at law (see 306 Rutledge, LLC v City of New York, 90 AD3d 1026, 935 NYS2d 619 [2d Dept 2011] DiFabio v Omnipoint Communications, Inc., 66 AD3d 635, 636—637, 887 NYS2d 168 [2d Dept 2009] Mar v Liquid Mgt. Partners, LLC, 62 AD3d 762, 880 NYS2d 647 [2d Dept 2009] Dana Distrib., Inc. v Crown Imports, LLC, 48 AD3d 613, 853 NYS2d 111 [2d Dept 2008]); 3) that the granting of the requested injunctive relief would confer upon the plaintiff the ultimate relief requested in the action (see Wheaton/TMW Fourth Ave., LP v New York City Dept. of Bldgs., 65 AD3d 1051, supra; SHS Baisley, LLC v Res Land, Inc., 18 AD3d 727, 795 NYS2d 690 [2d Dept 2005]); 4) that the relief would disturb, rather than maintain the status quo, except where it is necessary to restore the status quo that was disturbed by action undertaken immediately prior to suit so as to prevent the dissipation of assets that could render the judgment ineffectual (see 1650 Realty Assoc., LLC v Golden Touch, 101 AD3d 1016, 956 NYS2d 178 [2d Dept 2012]).
A preliminary injunction is thus not a proper remedy where it appears that the movant can be fully recompensed by a monetary award or other adequate remedy at law (see Mar v Liquid Mgt. Partners, LLC, 62 AD3d 762, supra; Dana Distrib., Inc. v Crown Imports, LLC, 48 AD3d 613, supra). Nor is it appropriately issued where the irreparable harm claimed is remote or speculative or where it is economic in nature (see County of Suffolk v Givens, 106 AD3d 943, supra; Rowland v Dushin, 82 AD3d 738, 917 NYS2d 702 [2d Dept 2011] Family-Friendly Media, Inc. v Recorder Tel. Network, 74AD3d738, 903 NYS2d 80 [2d Dept 2010]).
Cases such as the instant one, in which the plaintiff seeks to enjoin a defendant's expressions and speech, are governed by additional rules. It is well settled that a "prior restraint on expression comes ... with a heavy presumption' against its constitutional validity" (Organization for a Better Austin v Keefe, 402 US 415, 419, 91 SCt 1575, [1971], quoting Carroll v President and Comm'rs of Princess Anne, 393 US 175, 181, 89 SCt 347 [1968] Ramos v Madison Sq. Garden Corp., 257 AD2d 492, 684 NYS2d 212 [1st Dept 1999]). Prior restraints are not permissible where they are sought merely to enjoin the publication of libel (see Marlin Firearms Co. v Shields, 171 NY 384, 64 NE 163 [1902] Rosenberg Diamond Dev. Corp. v Appel, 290 AD2d 239, 735 NYS2d 528 [1st Dept 2002]). An injunction is thus unavailable in defamation cases in the absence of extraordinary circumstances (see Rombom v Weberman, 309 AD2d 844, 766 NYS2d 88 [2d Dept 2003] Koussevitzky v Allen, Towne & Heath, 272 AD 759, 69 NYS2d 432 [1st Dept 1947]), and in the absence of a showing of independent grounds for equitable relief such as irreparable harm to recognized privacy, business [*4]or property rights and interests (see Rose v Levine, 37 AD3d 691, 830 NYS2d 732 [2d Dept 2007] Ansonia Assoc., Ltd. Partnership v Ansonia Tenants' Coalition, Inc., 253 AD2d 706, 677 NYS2d 575 [1st Dept 1998] Trojan Elec. & Mach. Co., Inc. v Heusinger, 162 AD2d 859, 557 NYS2d 756 [3d Dept 1990]). It is only where "the objectionable speech is part and parcel of a course of conduct deliberately carried on to further a fraudulent or unlawful purpose'" that a preliminary injunction may issue (Rosenberg Diamond Dev. Corp. v Appel, 290 AD2d 239, supra; quoting Trojan Elec. & Mach. Co. v Heusinger, 162 AD2d 859, 860, supra). Where there is no evidence of a sustained campaign to interfere with the plaintiff's business, a claim for injunctive relief does not lie (see LoPresti v Florio, 71 AD3d 574, 899 NYS2d 10 [1st Dept 2010]).
Here, the plaintiffs' moving papers and submissions in reply failed to demonstrate, by clear and convincing proof, that irreparable harm will be sustained absent the granting of the preliminary injunctive relief demanded, including that resting on violations of the March 15, 2013 Confidentiality Statement. Economic loss which is compensable by money damages does not constitute irreparable harm so as to warrant the granting of a preliminary injunction (see EdCia Corp. v McCormack, 44 AD3d 991, 845 NYS2d 104 [2d Dept 2007] 1659 Ralph Ave. Laundromat Corp. v David Enter., LLC, 307 AD2d 288, 762 NYS2d 288 [2d Dept 2003]). A preliminary injunction is not warranted in cases where the movant cannot "demonstrate that its potential damages are not compensable in money capable of calculation and, thus, that it will suffer irreparable harm absent the requested injunction" (see Credit Index, LLC v Riskwise Intern, LLC, 282 AD2d 246, 722 NYS2d 862 [1st Dept 2001] White Bay Enter., Ltd. v Newsday, Inc., 258 AD2d 520, 521 685 NYS2d 257 [2d Dept 1999]). Destruction of an ongoing business concern rather than its disruption is necessary to satisfy a claim of irreparable harm to any such business concern so as to warrant an injunction (see Reuschenberg v Town of Huntington, 16 AD3d 568, 791 NYS2d 652 [2d Dept 2005] North Shore Auto & Towing v Nassau County, 18 Misc 3d 1108[A], 856 NYS2d 25 [Sup. Ct. Nassau County 2007]).
In each of the six causes of action advanced in the complaint, the recovery of money damages are demanded by the plaintiffs and there has been no showing that the recovery of such money damages would be inadequate to fully compensate the plaintiff. The existence of these claims serves to undercut the plaintiffs' demands for preliminary injunctive relief (see Matos v City of New York, 21 AD3d 936, 801 NYS2d 610 [2d Dept 2005]). In addition, while the plaintiffs claim that the defendant's conduct has harmed its business, its reputation and its relations with donors and sponsors, including municipalities and local legislatures, and that such harm constitutes irreparable harm there is no evidence of a destruction of any of the three plaintiffs' ongoing business concerns in the absence of the granting of the requested preliminary injunction or that the claimed economic losses are impossible to calculate (see Wall Street Garage Parking Corp. v New York Stock Exch., Inc., 10 AD3d 223, 781 NYS2d 324 [1st Dept 2004]).
Nor do a balance of the equities weigh in favor of the plaintiff. As indicated above, the preliminary injunctive relief sought here is governed by special rules applicable whenever the restraint of speech or personal views or expressions are the object of such relief. The plaintiffs [*5]failed to demonstrate the existence of extraordinary circumstances or that the objectionable speech is part and parcel of a course of conduct deliberately carried on to further a fraudulent or unlawful purpose (see Rombom v Weberman, 309 AD2d 844, supra; Rosenberg Diamond Dev. Corp. v Appel, 290 AD2d 239, supra), and they failed to adduce evidence of a sustained campaign to interfere with the plaintiffs' businesses (see LoPresti v Florio, 71 AD3d 574, supra).
The plaintiffs' reliance upon the Confidentiality Statement the defendant signed on March 15, 2013 to establish an entitlement to some or all of the preliminary injunctive relief is unavailing. In such agreement, the signatory employee was charged with regarding all non-public information intended for internal purposes as "an agency trust". Included therein but not limited thereto is "administrative information such as salaries, contents of employment contracts, identities of agency contributors, staff addresses and phone numbers internal budgets and information discussed at meetings, the disclosure or personal use of which was "strictly prohibited". The defendant agreed to maintain the confidentiality of this and all other information outlined in the agreement even after termination, whether voluntary or involuntary, and was advised that breaches thereof would subject the employee to suspension or termination and criminal prosecution (see Confidentiality Statement attached as Exhibit A to the moving papers).
The plaintiffs' reliance on appellate and other case authorities in actions involving
violations of express restrictive covenants executed by employees and/or the disclosure
of trade secrets, confidential customer information or other acts of unfair competition
that are actionable in the absence of such a restrictive covenant is misplaced (see
e.g., Aon Risk Serv. v Cusack, 102 AD3d 461, 958 NYS2d 114
[1st Dept 2013] Clarion Assoc., Inc. v D.J. Colby Co., Inc., 276 AD2d
461, 714 NYS2d 99 [2d Dept 2000] Nassau Soda Fountain Equip. Corp. v
Mason, 118 AD2d 764, 500 NYS2d 154 [2d Dept 1986] and the cases cited
therein). There are no allegations as to the defendant's misuse of trade secrets,
confidential customer information or other acts of unfair competition here and the
plaintiffs' characterization of its contributors, sponsors and donors as its "customers" in
an effort to fit themselves within the cases cited is rejected as lacking in merit (see
American Broadcasting Co., Inc. v Wolf, 52 NY2d 394, 438 NYS2d 482
[1981]). Clearly, only the clients of the plaintiffs to whom they render assistance in the
management of such client's medical care constitute the customers of the plaintiffs.
Contributors, sponsors and donors are simply not "customers" of the plaintiffs.
The court is thus left with the plaintiffs' claims that the defendant's use of her knowledge of the identities of donors and sponsors to contact them by mail violated the Confidentiality Statement and that such a violation warrants issuance of a preliminary injunction restraining all use of such identities for purposes harmful to the plaintiffs. However, these claims lack merit for several reasons including that any breach of the Confidentiality Statement has not been shown to be remedied, inadequately, by money damages that are not capable of quantification (see Complaint, Third Cause of Action sounding in Breach of the Confidentiality Statement). In addition, there has been no showing of the enforceability of the Confidentiality Statement, which was signed not as a condition of the defendant's employment but a mere two weeks prior to her [*6]termination (see Zellner v Stephen D. Conrad, M.D., P.C., 183 AD2d 250, 589 NYS2d 903 [2d Dept 1992] cf., Delta Enterprise Corp. v Cohen, 93 AD3d 411, 940 NYS2d 43 [1st Dept 2012]), and whether the identities of the contributors, sponsors and donors of the plaintiffs are truly confidential or are matters obtainable from the plaintiff directly or in materials disseminated by it or from other sources publicly available, including attendance at plaintiffs' sponsored events.
Under these circumstances, it is unnecessary to determine whether the plaintiffs
succeeded in establishing a likelihood of success on the merits of its pleaded claims for
relief. Accordingly, the instant motion (#001) by the plaintiffs for preliminary injunctive
relief is denied.
DATED: ___________________________________________
THOMAS F. WHELAN, J.S.C.