Shannon Stables Holding Co., Ltd. v. Bacon

• Decision Date: 28 December 1987
• Citation: 135 A.D.2d 804,522 N.Y.S.2d 908
• Parties: SHANNON STABLES HOLDING COMPANY LTD., Appellant, v. Robin BACON, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 908

522 N.Y.S.2d 908

135 A.D.2d 804

SHANNON STABLES HOLDING COMPANY LTD., Appellant, v. Robin BACON, Respondent.

Supreme Court, Appellate Division Second Department.

Dec. 28, 1987.

Kirschenbaum Shapiro & Marro, New York City (Joseph P. Marro and Stephen Kirschenbaum, of counsel), for appellant.

Moore, Berson, Lifflander, Eisenberg & Mewhinney, New York City (Yvette Harmon and Ellen A. Schwarts, of counsel), for respondent.

Before BRACKEN, J.P., and KUNZEMAN, SPATT and HARWOOD, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, for a permanent injunction based on the alleged breach of a covenant not to compete contained in an employment agreement, the plaintiff appeals from an order of the Supreme Court, Westchester County (Ferraro, J.), entered July 2, 1987, which denied the plaintiff's motion for a preliminary injunction and vacated the temporary restraining order previously issued in its favor.

ORDERED that the order is affirmed, with costs.

On June 7, 1984, the plaintiff Shannon Stables Holding Company, Ltd. (hereinafter Shannon), an equine facility on Route 22 in Bedford, New York, and defendant Robin Bacon (hereinafter Bacon), a horse trainer and riding instructor, entered into a written employment agreement. The contract was terminable "at will" by either party on at least two weeks notice, and it required Shannon to pay commissions to Bacon according to a specific plan and to enroll customers on Bacon's behalf. The contract also contained a restrictive covenant which provided, in pertinent part, that (1) for a period of one year from termination, Bacon shall not work at an equine facility within a five-mile radius of the Shannon Stables; (2) Bacon shall not solicit customers of Shannon for a period of two years from her termination; and (3) Bacon shall not service any customers of Shannon for a period of one year from the termination.

In April 1987 Bacon sent a letter to Shannon stating that because (1) the stable conditions had deteriorated; (2) Shannon had failed to live up to its obligation to handle the scheduling and booking of customers; and (3) Shannon owed her "at least $3,000", she felt that Shannon had terminated their agreement and that she no longer considered it binding.

Thereafter, in June 1987, Bacon opened her own stables on Route 22 approximately two miles from Shannon's location. Shannon then commenced the instant action against Bacon to, inter alia, enforce the restrictive covenant in the parties' contract, including a request for a permanent injunction to prevent Bacon from violating its terms.

Upon commencing this action, Shannon moved for a preliminary injunction enjoining Bacon from, inter alia, soliciting any of Shannon's customers, providing services for any of Shannon's customers, and from conducting the business of a riding stable within a five mile radius of Shannon's place of business. The Supreme Court denied the motion on the ground that Shannon had failed to establish the three elements required to obtain a preliminary injunction. We affirm, but on a more limited basis.

It is well settled that in order to prevail on a motion for a preliminary injunction, the movant has the burden of demonstrating (1) a likelihood of ultimate success on the merits; (2) irreparable injury absent the granting of the preliminary injunction; and (3) that a balancing of equities favor the movant's position ( see, Wurttembergische Fire Ins. Co. v. Pan Atlantic Underwriters Ltd., 133 A.D.2d 268, 519 N.Y.S.2d 57; Kurzban & Son v. Board of Educ., 129 A.D.2d 756, 514 N.Y.S.2d 749).

In the instant case, Shannon has failed to meet its burden of establishing the likelihood of ultimate success on the merits. As this Court stated in Family Affair Haircutters v. Detling, 110 A.D.2d 745, 747, 488 N.Y.S.2d 204:

"The first requirement, i.e., likelihood of success, has been described as follows: 'A party is not entitled to a temporary injunction, unless the right is plain from the undisputed facts. If the right depends upon an issue which can only be decided upon a trial, the injunction cannot be granted. ( Pine Hill-Kingston Bus Corp. v. Davis, 225 App.Div. 182 ; Voorhees & Hobart v. Hobart, 251 App.Div. 111 ). Where the facts, as in the case at bar, are in sharp dispute, a temporary injunction will not be granted. ( Morrin v. Structural Steel Bd. of Trade, 231 App.Div. 673 ; Geed v. Braunsdorf, 277 App.Div. 1001 ; cf. Schwamm v. Alpert, 31 Misc 2d 768 .)' ( Jaymar's, Inc. v. Schwartz, 37 Misc 2d 314,...