Opinion
No. 12635/2016.
02-17-2017
COMFORT ADULT DAY CARE CENTER, INC., Petitioner, v. Miriam MEJIA and Happiness Adult Day Care Center, Inc., Respondents.
The following papers numbered 1 to 12 read on this Order to Show Cause by petitioner, COMFORT ADULT DAY CARE CENTER, INC., for a preliminary injunction enjoining and restraining respondent MIRIAM MEJIA until the end of the restrictive covenant period on August 19, 2018 from: calling on or soliciting on behalf of any competitor or employer, but not limited to Happiness Adult Day Care Center, Inc.; becoming interested in or associated with any other corporation, firm, business, or person located within three (3) miles of Comfort Adult Day Care Center, Inc., which engaged in a business competitive with that of Comfort Adult Day Care Center, Inc., or any of its subsidiaries or affiliated companies; disclosing all of any part of petitioner's customer list an accounts to any persons, firm, corporation, or other entity for any reason or purpose; and using or disclosing Comfort's confidential information to any third party:
| Papers | Numbered |
|---|---|
| Order to Show Cause–Affidavits–Exhibits–Aff. of Service | 1–5 |
| Affidavit in Opposition–Memo. of Law–Exhibits | 6–9 |
| Reply Affirmation–Exhibits | 10–12 |
This action arises out of an alleged breach of an Employment Agreement entered into by petitioner Comfort Adult Day Care Center, Inc. (Comfort) and respondent Miriam Mejia dated April 1, 2013. The Employment Agreement contains a restrictive covenant whereby for the first two years after the termination of employment, Ms. Mejia is restricted from soliciting customers and from working for a related entity within a three mile radius of Comfort. The Employment Agreement also requires the parties to arbitrate any controversy or claim arising out of, or relating to the Employment Agreement, or its breach.
Comfort contends that since Ms. Mejia left her employment with Comfort on August 19, 2016, she has violated the Employment Agreement by working for respondent Happiness Adult Day Care Center, Inc. (Happiness), a competing business located within three miles of Comfort, and by using confidential information obtained while in her employment with Comfort to divert members from Comfort to Happiness. Comfort further contends that such conduct has resulted in a loss of income, revenue, and client relationships. As to Happiness, Comfort contends that Happiness is interfering with Comfort's business by diverting business from Comfort to Happiness.
In support of the motion, Comfort submits an affidavit from Diana Vasquez, a 50% shareholder, Vice President and Secretary of Comfort. Ms. Vasquez affirms that after Ms. Mejia's termination, Ms. Mejia visited Comfort and gave members of Comfort information regarding Happiness. Ms. Mejia also took several members of Comfort to Happiness. Upon learning of the situation, Ms. Vasquez contacted Happiness on at least two occasions and explained that Ms. Mejia was violating her Employment Agreement. She further advised Happiness that it was helping Ms. Mejia breach the Employment Agreement. Comfort's attorney, Drew Wasserman, Esq., also sent a letter via registered mail, return receipt requested, to both Happiness and Ms. Mejia advising them of the breach of the Employment Agreement and demanding that they cease and desist from using information obtained from Comfort's customers, accounts, and confidential information.
Also submitted in support of the motion is a flyer given to one of Comfort's members containing Ms. Mejia's contact information, a photograph showing four of Comfort's members at the Happiness facility, and affidavits from a Comfort employee and from Comfort's members affirming that Ms. Mejia was observed at Happiness and that Ms. Mejia telephoned them and invited them to Happiness.
In opposition, Ms. Mejia submits an affidavit stating that she is not employed by and has never been employed by Happiness. She works for Grand Centurion Associates, Inc. as a property manager. Additionally, she affirms that she is not soliciting any Comfort members or disseminating any confidential information.
Happiness does not submit an affidavit from someone with personal knowledge of the circumstances surrounding this matter.The issuance of an injunction in aid of arbitration is governed by CPLR 7502(c). CPLR 7502(c) provides the courts with limited power to "entertain an application for an order of attachment or for a preliminary injunction in connection with an arbitrable controversy, but only upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief" (see Matter of H.I.G. Capital Mgt. v. Ligator, 233 A.D.2d 270 [1st Dept.1996] ; County Natwest Sec. Corp., USA v. Jesup, Josephthal & Co., 180 A.D.2d 468 [1st Dept.1992] ). A party seeking relief under this provision must also make a showing of the traditional equitable criteria for the granting of temporary relief under CPLR article 63 (see Winter v. Brown, 49 AD3d 526 [2d Dept.2008] ; Matter of K.W.F. Realty Corp. v. Kaufman, 16 AD3d 688 [2d Dept.2005] ). A party may obtain temporary injunctive relief only upon a demonstration of (1) irreparable injury absent the grant of such relief; (2) a likelihood of success on the merits; and (3) a balancing of the equities in that party's favor (see W.T. Grant Co. v. Srogi, 52 N.Y.2d 496 [1981] ; Matter of Advanced Digital Sec. Solutions, Inc. v. Samsung Techwin Co., Ltd., 53 AD3d 612 [2d Dept.2008] ; Montauk–Star Is. Realty Group v. Deep Sea Yacht & Racquet Club, 111 A.D.2d 909 [2d Dept.1985] ).
Comfort has established the first element as the loss of goodwill, including harm to customer relationships, constitutes irreparable harm (see Laro Maint. Corp. v. Culkin, 255 A.D.2d 560 [2d Dept.1998] ; FTI Consulting, Inc. v. PricewaterhouseCoopers LLC, 8 AD3d 145 [1st Dept.2004] ; Willis of N.Y. v. DeFelice, 299 A.D.2d 240 [1st Dept.2002] ).
Regarding Comfort's likelihood of success on the merits, a restrictive covenant is enforceable if it "(1) is no greater than is required for the protection of a legitimate interest of the employer; (2) does not impose an undue hardship on the employee; and (3) is not injurious to the public" (BDO Seidman v. Hirshberg, 93 N.Y.2d 382, 388–89 [1999] ). Here, the Employment Agreement prevents Ms. Mejia from competing against Comfort within three miles of Comfort's location and from soliciting and doing business with Comfort's clients. This Court finds such covenant to be reasonable and enforceable. As to the second cause of action for tortious interference, the elements are (1) the existence of a valid contract, (2) defendant's knowledge of the contract, and (3) defendant's intentional procurement of a breach of the contract, and (4) resulting damages (see Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413 [1996] ). Based upon the letters sent to both respondents informing them of the covenant in the Employment Agreement and the breach, Comfort is likely to succeed on a tortious interference claim (see NBT Bancorp Inc. v. Fleet/Norstar Fin. Group, 87 N.Y.2d 614 [1996] ).
Lastly, the balance of equities weighs in favor of Comfort (see Willis of N.Y. v. DeFelice, 299 A.D.2d 240 [1st Dept.2002] ). Comfort will continue to suffer the loss of client relationships if Ms. Mejia is not prohibited from soliciting clients and working for Happiness. On the other hand, Ms. Mejia has failed to demonstrate significant hardship from the appropriate limited restrictive covenant, especially if, as she affirms, she is not employed by Happiness.
Moreover, the mere existence of an issue of fact itself does not warrant denial of the application (see 91–54 Gold Road, LLC v. Cross–Deegan Realty Corp., 93 AD3d 649 [2d Dept.2012] ; Arcamone–Makinano v. Britton Prop., Inc., 83 AD3d 623 [2d Dept.2011] ; Reichman v. Reichman, 88 AD3d 680 [2d Dept.2011] ).
The right to a preliminary injunction is conditioned upon the movant filing an undertaking in accordance with CPLR 6312 in the amount of $5,000. Further, if the arbitration is not commenced within 30 days of this order the preliminary injunction shall expire (see CPLR 7502[c] ).
Accordingly, for the above stated reasons, it is hereby
ORDERED, that the petition for injunctive relief is granted; and it is further
ORDERED, that respondents and anyone acting in concert with them or on their behalf are temporarily restrained from (1) with respect to respondent HAPPINESS ADULT DAY CARE CENTER, INC. continuing to employee Miriam Mejia in violation of her non-compete obligations and continuing to facilitate Miriam Mejia's contractually prohibited solicitation, (2) with respect to respondent MIRIAM MEJIA, calling on or soliciting any member or former members of whom Miriam Mejia became familiar with or known to her as a result of her employment with Comfort, (3) with respect to respondent MIRIAM MEJIA, becoming interested in or associated with any other corporation, firm, business, or person located within three miles of Comfort's location which engages in a business competitive with that of Comfort's or any of its subsidiaries or affiliated companies, (4) with respect to respondent MIRIAM MEJIA, disclosing all or any part of Comfort'S customer list or accounts to any persons, firm, corporation or another entity for any reason or purpose, and (5) with respect to respondents MIRIAM MEJIA and HAPPINESS ADULT DAY CARE CENTER, INC., using or disclosing Comfort's confidential information to any third party; and it is further
ORDERED, that the Court directs petitioner COMFORT ADULT DAY CARE CENTER, INC. to post a bond in the sum of $5,000 within thirty (30) days of the date of this order as a condition of the injunctive relief; and it is further
ORDERED, that the parties are directed to proceed to arbitration.