Opinion
11-15-2016
BUCHANAN CAPITAL MARKETS, LLC, formerly known as Marcum Buchanan Associates, LLC, Plaintiff–Appellant, v. Joanne DeLUCCA, et al., Defendants–Respondents.
The Roth Law Firm, PLLC, New York (Richard A. Roth of counsel), for appellant. Nixon Peabody LLP, Jericho (James W. Weller of counsel), for respondents.
The Roth Law Firm, PLLC, New York (Richard A. Roth of counsel), for appellant.Nixon Peabody LLP, Jericho (James W. Weller of counsel), for respondents.
MAZZARELLI, J.P., ANDRIAS, SAXE, FEINMAN, GISCHE, JJ.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered May 17, 2016, which denied plaintiff's application for a preliminary injunction, unanimously affirmed, without costs.
Plaintiff sought an injunction enforcing covenants not to compete in employment agreements between its predecessor and defendants. Thus, to show a likelihood of success on the merits, plaintiff had to show that the restrictive covenants were enforceable. However, such covenants are not enforceable if the employer (plaintiff) does not demonstrate “continued willingness to employ the party covenanting not to compete” (Post v. Merrill Lynch, Pierce, Fenner & Smith, 48 N.Y.2d 84, 89, 421 N.Y.S.2d 847, 397 N.E.2d 358 [1979] ), i.e., defendants. The motion court did not improvidently exercise its discretion (see e.g. Matter of Prospect Park E. Network v. New York State Homes & Community Renewal, 125 A.D.3d 435, 2 N.Y.S.3d 467 [1st Dept.2015] ) in denying the injunctive relief sought since the “conflicting affidavits raise[d] sharp issues of fact” (Residential Bd. of Mgrs. of Columbia Condominium v. Alden, 178 A.D.2d 121, 123, 576 N.Y.S.2d 859 [1st Dept.1991] ).
Plaintiff also sought an injunction ordering defendants to return its proprietary information. It is not entirely clear from plaintiff's briefs what this information consists of. To the extent the allegedly confidential information is information about plaintiff's clients, plaintiff failed to make a showing of a likelihood of success on the merits (see Ashland Mgt. Inc. v. Altair Invs. NA, LLC, 14 N.Y.3d 774, 775, 898 N.Y.S.2d 542, 925 N.E.2d 581 [2010] ; see also 1 Model Mgt., LLC v. Kavoussi, 82 A.D.3d 502, 503, 918 N.Y.S.2d 431 [1st Dept.2011] ).
Even assuming plaintiff had shown a likelihood of success on the merits, it would also have to show irreparable injury. Plaintiff essentially complains that it has lost customers to defendants' new firm. However, “[l]ost profits ... are clearly compensable with money damages” (Sterling Fifth Assoc. v. Carpentille Corp., 5 A.D.3d 328, 329, 774 N.Y.S.2d 140 [1st Dept.2004] ; see Derfner Mgt. Inc. v. Lenhill Realty Corp., 105 A.D.3d 683, 964 N.Y.S.2d 132 [1st Dept.2013] ).
Plaintiff further failed to show that the balance of the equities weighed in its favor. The preliminary injunction that it sought would have changed the status quo (see Gama Aviation Inc. v. Sandton Capital Partners, L.P., 93 A.D.3d 570, 571, 940 N.Y.S.2d 617 [1st Dept.2012] ). Unless plaintiff's predecessor's clients signed agreements to use plaintiff's predecessor for a set period of time—and there is no indication in the record that they did—the clients should be free to pick the firm they want, be it plaintiff or defendants' new firm (see generally Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364, 370, 12 N.Y.S.3d 606, 34 N.E.3d 357 [2015] ).