United States District Court, E.D. New York
GLUCO PERFECT, LLC, U.S. HEALTH HOME CARE, INC., and JOY MERNONE, Individually and in her capacity as Executor of the Estate of Kevin R. Mernone, and derivatively on behalf of PERFECT CARE, INC., Plaintiffs,
PERFECT GLUCO PRODUCTS, LLC, USHH PRODUCTS, INC., FRANCINE FREIMAN, WILLIAM J. GILLEN, ANDRE RAMNAUTH and JOHN AND JANE DOES 1 THROUGH 10, Defendants.
KIYO A. MATSUMOTO, District Judge.
TEMPORARY RESTRAINING ORDER
On March 13, 2014, plaintiffs Gluco Perfect, LLC, U.S. Health and Home Care, Inc., and Joy Mernone, Individually and in her capacity as Executor of the Estate of Kevin R. Mernone, and derivatively on behalf of Perfect Care, Inc. (collectively "plaintiffs") commenced this action by the filing of a complaint, an application for an Order to Show Cause, affidavits of Joy Mernone and Michael J. Garibaldi, CPA, both sworn to on March 12, 2014, a certification of Stephen Heiser, Esq. as to why notice of the application for an Order to Show Cause for Temporary Restraining Order was not provided to Defendants, and a supporting Memorandum of Law in Support of Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction, and supporting exhibits. Because plaintiffs had demonstrated a substantial likelihood of success on the merits, that they had suffered immediate and irreparable injury, loss and damages before the defendants could be heard, and sufficient reasons that notice to the defendants should not be required in light of the plaintiffs' injuries, losses and damages, and because plaintiffs made repeated and unsuccessful efforts to gain access to the plaintiffs' place of business, assets, books and records, the court issued an Order to Show Cause at 4:30 p.m. on March 13, 2014, which, inter alia, directed service on the defendants, a date by which defendants were to respond, temporarily restrained specific conduct by the defendants, and ordered that plaintiffs be granted immediate access to their place of business, assets, books and records.
Following two telephone conferences with the parties on Friday, March 14, at approximately 4:30 p.m., and Sunday, March 16, at approximately 2:30 p.m., the court received submissions on March 17, 2014 from (1) defendants Perfect Gluco Products, LLC, USHH Products, Inc., Francine Freiman, and William Gillen (collectively "Perfect Gluco defendants"), including an affidavit of Francine Freiman with attached exhibits and a letter memorandum; and (2) interested party Glenn Mernone, the 50% owner of plaintiff Perfect Care, Inc., in the form of a letter with attached correspondence from Mitchell Devack, Esq., who also purported to represent plaintiff Perfect Care, Inc. Because Mr. Devack could not explain the factual circumstances and the legal authority for his appearance on behalf of the already represented plaintiff Perfect Care, Inc. of which plaintiff Joy Mernone and interested party Glenn Mernone are each 50% owners of the shares, the court recognizes Mr. Devack as counsel only for interested party Glenn Mernone until such time as Mr. Devack adequately establishes his authority to appear for Perfect Care, Inc.
On March 18, 2014, the court heard more than three hours of argument at the Order to Show Cause hearing after counsel for the parties agreed to defer the preliminary injunction hearing so that the parties could engage in expedited discovery. Michelle Rice, Esq. and Stephen Heiser, Esq. appeared for plaintiffs, Joshua Siegel, Esq., appeared for the Perfect Gluco defendants, and Mitchell J. Devack, Esq. and Christine A. Chester, Esq. appeared for interested party Glenn Mernone. Defendant Andre Ramnauth did not appear, despite all defendants having received service of the papers and adequate notice of the hearing.
Upon the court's consideration of the submissions of the parties and the oral arguments at the Order to Show Cause hearing, the court made findings on the record at the conclusion of the March 18, 2014 hearing and issued a temporary restraining order at approximately 6:05 p.m, as set forth in further detail below.
Upon the admissible evidence before the court, the court finds that plaintiffs have established (and defendants have not provided sufficient admissible evidence to the contrary):
(1) that plaintiffs have suffered and/or are in imminent danger of suffering continued immediate and irreparable injury, loss, or damage in the absence of this order based on plaintiffs' showing of the defendants' unauthorized use of the plaintiffs' marks and names; the diversion, misappropriation and taking of plantiffs' assets, funds, inventory and accounts receivables from plaintiffs' customers and suppliers through the use of misleading and inaccurate representations regarding the ownership and name changes of plaintiffs; the unauthorized writing of checks and transferring of funds from and through plaintiffs' accounts; the failure of Francine Freiman as a servant, operations manager and purported vice-president of the plaintiffs to perform her responsibilities in a manner consistent with her duties as a servant and/or fiduciary of the plaintiffs; all of which have caused injury, loss and damage to plaintiffs' business and has caused customer confusion and the loss and threatened loss of plaintiffs' customers, suppliers, goodwill, financial viability of the plaintiff entities, and interference with plaintiff Joy Mernone's ability to have access to the premises, assets, books and records of, and be involved in, the plaintiff businesses of which she is the one hundred per cent or fifty per cent shareholder.
(2) that plaintiffs have demonstrated that there is a substantial likelihood of success on the merits of:
(a) their 1st, 2nd, and 4th claims against all defendants for Trade Name Infringement, Trademark Infringement, Unfair Competition and Misappropriation under the Lanham Act and New York common law,
(b) their 3rd claim against all defendants for use of plaintiffs' names with intent to deceive,
(c) their 5th and 6th claims for breach of fiduciary duty against Freiman and faithless servant claim against defendants Freiman and Ramnauth, and
(d) their 7th and 8th claims for conversion against defendants Freiman and Gillen.
(3) given the parties' request that they be given time to engage in expedited discovery and that they be permitted to make supplemental submissions in advance of the preliminary injunction hearing, the court further finds that good cause exists to extend this order until and including April 10, 2014, ...