BENDER INSURANCE AGENCY, INC. v. TREIBER INSURANCE AGENCY, INC.

• Decision Date: 14 May 2001
• Citation: BENDER INSURANCE AGENCY, INC. v. TREIBER INSURANCE AGENCY, INC., 283 A.D.2d 448, 729 N.Y.S.2d 142 (N.Y. App. Div. 2001)
• Parties: BENDER INSURANCE AGENCY, INC., Appellant,<BR>v.<BR>TREIBER INSURANCE AGENCY, INC., et al., Respondents.
• Court: New York Supreme Court — Appellate Division

283 A.D.2d 448

729 N.Y.S.2d 142

BENDER INSURANCE AGENCY, INC., Appellant,

v.TREIBER INSURANCE AGENCY, INC., et al., Respondents.

Decided May 14, 2001.

Ritter, J. P., S. Miller, Feuerstein and Townes, JJ., concur.

Ordered that the order dated January 28, 2000, is affirmed; and it is further,

Ordered that the order dated May 31, 2000, is reversed insofar as appealed from, the motion of Treiber Insurance Company, Inc., is denied, and the separate motion of the defendant James P. DiGiovanni is denied in its entirety; and it is further,

Ordered that the plaintiff is awarded one bill of costs.

The defendant James P. DiGiovanni is a former "producer" for the plaintiff Bender Insurance Agency, Inc. (hereinafter Bender). A "producer" is an industry term for a person who, inter alia, solicits the purchase of insurance policies. During his tenure with Bender, DiGiovanni signed a written employment agreement (hereinafter the Agreement). The Agreement provided, inter alia, that DiGiovanni would not divulge any confidential information or trade secrets he became privy to during his employment with Bender, and that, for a period of five years after the termination of his employment with Bender, he would not "solicit, directly or indirectly, any of the clients or accounts of [Bender]."

After resigning from Bender, DiGiovanni joined the defendant Treiber Insurance Agency, Inc. (hereinafter Treiber). Bender commenced this action against both DiGiovanni and Treiber seeking injunctive relief and damages. Bender alleged, inter alia, that DiGiovanni, while still in its employ, used its office facilities and equipment to solicit customers for himself and Treiber. Further, Bender claimed that DiGiovanni, with Treiber's knowledge and encouragement, misappropriated confidential information and trade secrets, in violation of his contractual duties and his duty of loyalty to Bender, and that both DiGiovanni and Treiber exploited such materials to solicit current and potential customers of Bender, and to engage in unfair competition. Before answering, Treiber moved to dismiss the complaint insofar as asserted against it pursuant to CPLR 3211 (a) (7), and DiGiovanni separately moved for the same relief. By order dated January 28, 2000, the Supreme Court denied Bender's motion for a preliminary injunction and vacated a temporary restraining order. By order dated May 31, 2000, the Supreme Court dismissed the complaint insofar as asserted against Treiber and dismissed all but the first cause of action insofar as asserted against DiGiovanni. We affirm the first order and reverse the second order insofar as appealed from.

The Supreme Court properly denied Bender's motion for a preliminary injunction. To be entitled to such relief, the movant must establish: (1) the likelihood of ultimate success on the merits, (2) irreparable injury absent the granting of the preliminary injunction, and (3) that a balancing of equities favors the movant's position (see, Doe v Axelrod, 73 NY2d 748). Bender failed to establish its entitlement to such relief. However, the complaint insofar as asserted against Treiber and DiGiovanni must be reinstated.

The respondents' arguments for dismissal, both before the Supreme Court and on appeal, are premised on assertions that the Agreement is not enforceable, and the materials taken by DiGiovanni from Bender were not confidential information and/or trade secrets. Neither assertion may be sustained as a matter of law. In denying Bender a preliminary injunction, the Supreme Court noted that the non-compete clause of the Agreement appeared overbroad, and to impose an undue hardship on DiGiovanni. However, it did not find that the Agreement was unenforceable as a matter of law, nor did it indicate that it might not be enforceable in part, and we do not so find on appeal (see, Trans-Continental Credit & Collection Corp. v Foti, 270 AD2d 250). Rather, in denying the preliminary injunction, the Supreme Court expressly left open the possibility that at trial Bender might prove its entitlement to a permanent injunction. Similarly, although the allegedly confidential materials taken from Bender by DiGiovanni were produced to the Supreme Court, the orders appealed from do not indicate that the Supreme Court examined the materials and determined as matter of...