Zurich Depository Corp. v. Gilenson

• Decision Date: 09 June 1986
• Citation: 121 A.D.2d 443,503 N.Y.S.2d 415
• Parties: ZURICH DEPOSITORY CORPORATION, Respondent, v. Marc R. GILENSON, et al., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 415

503 N.Y.S.2d 415

121 A.D.2d 443

ZURICH DEPOSITORY CORPORATION, Respondent, v. Marc R. GILENSON, et al., Appellants.

Supreme Court, Appellate Division Second Department.

June 9, 1986.

Stark, Elman, Amron & Rosen, New York City (Leonard S. Elman and Robert Baumgarten, of counsel), for appellants.

Jaspan, Ginsberg, Ehrlich, Reich & Levin, Garden City (A. Thomas Levin and Charles A. Singer, of counsel), for respondent.

Before LAZER, J.P., and THOMPSON, BRACKEN and RUBIN, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, for a permanent injunction, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Christ, J.), dated July 17, 1985, as, upon renewal and reargument, vacated a prior order of the same court, dated January 16, 1985, and granted the plaintiff's motion for a preliminary injunction enjoining the defendants, inter alia, from using, disclosing or soliciting customers from any name and address list, prospect list or customer list belonging to the plaintiff.

Order reversed insofar as appealed from, on the law, with costs, and motion for a preliminary injunction denied.

A party seeking a preliminary injunction 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 favors [the movant's] position" (Gambar Enterprises v. Kelly Servs., 69 A.D.2d 297, 306, 418 N.Y.S.2d 818, and cases cited therein). We have reviewed the papers that were before Special Term on the motion and conclude that the plaintiff failed to meet its burden of demonstrating a likelihood of ultimate success in the action. In order to sustain that burden, the movant must demonstrate that the right on which it seeks to ultimately prevail " 'is plain from the undisputed facts [and] [i]f the right depends upon an issue which can only be decided upon a trial, the injunction cannot be granted' " (Family Affair Haircutters v. Detling, 110 A.D.2d 745, 747, 488 N.Y.S.2d 204, quoting from Jaymar's, Inc. v. Schwartz, 37 Misc.2d 314, 316, 235 N.Y.S.2d 449).

It is alleged that the plaintiff and the defendant Central Federal Savings and Loan Association (hereinafter Central Federal) are competitors in the business of storing corporate data and records and that the defendant Marc Gilenson, a former employee of the plaintiff who resigned to accept a position with Central Federal, had utilized the plaintiff's confidential lists of current and prospective customers for the purpose of soliciting business on behalf of his new employer. However, it is fundamental that in the absence of a restrictive covenant not to compete (there was none in this case), "an employee is free to compete with his or her former employer unless trade secrets are involved or fraudulent methods employed" (Catalogue Serv. of Westchester v. Henry, 107 A.D.2d 783, 784, 484 N.Y.S.2d 615).

The motion papers contained evidence that the names appearing in the plaintiff's list of prospective customers, to which the defendant Gilenson concededly had access while in the plaintiff's employ, were readily ascertainable in a trade directory thereby creating an issue as to whether the list was entitled to trade-secret protection (see, Leo Silfen, Inc. v. Cream, 29 N.Y.2d 387, 328 N.Y.S.2d 423, 278 N.E.2d 636; American Print. Converters v. JES Label & Tape, 103 A.D.2d 787, 477 N.Y.S.2d 660). Furthermore, the plaintiff failed to...