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TRANSCRIPT
S H & EMILY KlRSCH
150 E. 58TH STREET 22ND FLOOR
NIEHAUS NEW YORK, NY 10155
O (212) 832-0170
M (917) 744-2888
KlRSCH NIEHAUS.COM
VIA ECF and E-MAIL
August 5, 2019
Hon. Jennifer Schecter
New York State Supreme Court Justice
Commercial Division Part 54
60 Centre Street
New York, NY 10007
Re: Elegran vs. Urban Compass, Inc. and Zino Angelides., Index No. 654370/2019.
Dear Justice Schecter:
This firm represents defendants Urban Compass, Inc. d/b/a/ Compass ("Compass") and Zino
Angelides. We write this letter per the Court's direction as a follow up to the conference held on
August 1, 2019 to oppose the application of plaintiff Elegran LLC d/b/a Elegran Real Estate
("Elegran") for a temporary restraining order pursuant to CPLR §6301 pending a hearing on its
motion for a prelimin=zy injüüctica. Elegran has not met its heavy burden and the TRO should
be denied.
A. Elegran has not satisfied its heavy burden here and no TRO should issue.
A temporary restraining order may be granted pending a heariñg for a preliminary injunction
where it appears that immediate and irreparable injury will result unless the defendant is
restrained before a hearing can behad." CPLR §6301. A court must deny an application for a
TRO if a plaintiff fails to demonstrate a likelihced of success on the merits in the underlying
action and that she will suffer immediate and irreparableharm."
Sosa v Meyers, 831 N.Y.S.2d
536 (Sup.Ct. 2006) (declining to issue TRO). Injunctive relief is a "drasticremedy."
Id.
Elegran seeks the extraordiñary remedy of injunctive relief to prohibit Angelides - and Compass
- from soliciting agents, customers or employees of Elegran. But:
• Elegran has not shown that it is likely to succeed on the merits of any of its claims;
• Elegran has not shown that it would suffer irreparable harm should a TRO not issue;
• The balance of equities tip indefendants'
favor;
• Plaintiff's proposed TRO is wildly overbroad and against public policy. Plaintiff's
proposal adversely impacts vast numbers of unnamed third parties by (a) unfairly
restraining thousands of real estate agents affiliated with Compass who have probably
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never heard of Mr. Angelides or the facts alleged by Elegran and (b) unfairly restrains the
mobility of other agents at Elegran, effectively prohibiting them from taking their
business to Compass should they so desire; and
• Elegran must not be permitted to benefit from its violation of this Court's Rules by not
providing notice to defendants of its intent to move for a TRO, and refusing to eñgage in
reasonable, good faith negotiations to work out this dispute amicably even for a
temporary period.
1. Elegran Has Not Shown A Likelihood of Success on the Merits of its Breach of
Contract or Tortious Interference Claims
As is standard in the real estate industry and as Plaintiff's own papers admit, Mr.Angelides'
was
an indepeñdent contractor with Elegran - not an employee. Mr. Angelides signed an Independent
Contractor Agreement ("ICA") with Elegran in March 18, 2019 which governs the relationship.
The ICA contains no non-solicit, non-disclosure or confidentiality provisions of its own. It does
provide that there is an intent to enter into restrictive covenants in another document. ICA 19.
Mr. Angelides does not dispute that there may have been an intent to enter into such an
agrccmcñt, but there is no evidence that after signing the ICA he was ever presented with any
such additional restrictive covenants to sign or that there was any meeting of the minds as to
what those covenants might have been.
Elegran submits an unsigned form agreement containing onerous restrictive covcñañts and
claims that Mr. Angelides should be bound to those terms. However, Elegran cannot provide anyevidence tending to show (let alone establish a likelihood of success on the merits) that: (a) Mr.
Angelides ever signed the form restrictive covenant agreement; (b) Mr. Angelides ever saw the
form restrictive covenant agreement; (c) Mr. Angelides had any knowledge ofthe form
restrictive covcñañt agreement; or (d) the form restrictive covenant agreement was actually in
existence and/or use by Elegran in March 2019 and/or was ever signed by anyone with Elegran.
Accordingly, even if there were an intent to enter into some form of restrictive covenant, Mr.
Angelides cannot be held obligated on an agreement he never so much as saw or heard of. The
intent to enter into restrictive covenants is impossible to enforce because there are no material
terms identified. It is unknown whom Mr. Angelides is not supposed to solicit (employees?
Customers? Prospective customers? Contractors?) or for how long (6 months? One year? Some
other period of time?) or whether there is some geographic scope that makes such a restrictive
covenant reasonable - or not. Put another way, there is no indication of any basic terms (who,
what, where or when) according to which the Court could possibly assess the propriety or
lawfulness of what Mr. Angelides has done or not done. This is the very definition of an
unenforceable agreement. Elegran has not met its heavy burden of showing it is likely to succeed
on the merits of any breach of contract agreement against Mr. Angelides.
But even if Mr. Angelides were somehow held obligated to terms of a form that he never saw,
Elegran certainly has not met its extraordinary burden of showing that it is likely to succeed on
the merits of its tortious interference claim against Compass. Because it has failed to show that
valid, enforceable non-solicit agreement between Mr. Angelides and Elegran exists, it has failed
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to show that Compass could have known about any such alleged non-solicit agrccmcat. Nor has
Elegran met its burdeñ of establishing any likelihood of success in establishing that Compass
knowingly or actively induced Mr. Angelides to breach any such agreement, should one have
existed. Elegran has not met its heavy burden of showing it is likely to succeed on the merits of
any tortious interference with contract claim against Mr. Angelides.
2. Elegran Has Not Met Its Burden With Respect to its Misappropriation of Trade
Secrets Claims or Unfair Competition Claims
Elegran has also failed to show likelihood of success on the merits of its misappropriation of
trade secret and Unfair Competition claims. A list in the many thousands of possible residendal
real estate buyers or renters alone without more does not reach that level of protectability. Not
only are these lists easily compiled from the many publicly available resources (e.g., StreetEasy,
Zillow, other social media sites disclosing identities and desires of potential residential real estate
buyers and sellers) but they do not necessarily reflect real, live, timely leads of value (i.e., people
who are actually serious buyers or sellers with the intent and means to enter into a real estate
transacti0ñ in the short term). Not does it even seem possible, let alone has it been shown, that
such a customer list is not known to other brokers in the industry. A buyer or seller may wish to
use more than one real estate agent and almost always does.
Second, a misappropriation claim requires evidence of"use"
of the information. Even if Elegran
can be deemed to have shown that the information at issue is protectable, it has no evidence to
suggest that any protectable information has been used or will be used by Mr. Angelides, let
alone Compass. Critically, it has zero evidence that Compass has had, has now, or ever will
have any access to any of this information it claims is protectable. Its surmise ofCompass'
ill will to do so is without a shred of evidence is improper and cannot possibly support the
drastic remedy of a TRO.
To the extent Elegran is also taking the position that Mr. Añgclides has protectable information
about other Elegran independent contractors, Elegran has failed to make any showing there as
well. Elegran claims only that Mr. Angelides had knowledge ofagents' "prodüetivity"
and
compcasation. Real estateagents'
prodnetivity is publicly available information as their Gross
Commissions Income ("GCI", i.e., the total dollar amaüñt earned as a broker's commission on
transactions in which they participated in any given year) is published on any number of industiy
web sites such as BrokerMetrics.com. As for their compensation, there is no reason to believe
one agent would be privy to the split of another agent. In any event, agents do not guard that
information jealously because they must reveal it in order to negotiate for a better deal with a
new broker.
B. Elegran has not met its burden on the other factors.
The sine qua non of iñjüñctive relief is irreparable harm. Faively Transp. Malmo AB v. Wabtec.
Corp., 559 F.3d 110, 118 (2d Cir. 2009). Elegran has made no credible arguments that it will
suffer irreparable harm. The residential real estate business is transactional. If defendants were to
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consummate any real estate trañsaction in violation of Elegran's rights, the only harm would be a
single commission and that commission can easily be disgorged as damages later. It is unclear
how Elegran argues that a few transactions would irreparably damage its business.
Elegran seeks a restraint that will place an enormous burden on defeñdañts, stopping Mr.
Angelides from pursuing his livelihood and stopping Compass from conducting its business in
the ordinary course. If no restraint issues, Elegran may continue business as usual and will have
the opportunity to pursue damages should any alleged Elegran customer pay a commission to
Compass for a real estate transaction found to have been made in violation of Elegran's rights.
C. If an injunction is warranted, the Court should enter the order proposed by
defendants instead of the overbroad order proposed by Elegran.
Even if a TRO could be appropriate here - and none is - the order proposed by plaintiff is
grossly overbroad and seeks to leverage Mr.Angelides'
career move into an improper
competitive windfall forElegran.1
In contrast, at the Court's suggestion, defendants have
proposed to plaintiff a much narrower injunction, which plaintiff has refused to sign. The
stipulation that defendants have at all times been willing to sign is attackd hereto as Exhibit A.
There is no evidence that Compass owes any obligation to Elegran, so any restraint on Compass
can only be derivative of a restraint on Mr. Angelides or preserve the status quo, or else it is a
restraint that alters the status quo with an inexplicable adverse impact on Compass, its unrelated
real estate agents, and the unrelated Elegran agents who may wish to leave Elegran for Compass.
Your Honor was clear at the Court conference on Thursday that any relief would be limited in
scope to protect against any alleged harm originating with Mr. Angelides. Defendants have been
willing to consent to that ñarrowly tailored relief and anached hereto. Plaintiff has alternately
agreed, backed-off and tried to renegotiate since Friday afternoon. Plaintiff's wavering position
belies a lack of focus on what it purports to be the issue and a singular focus on extracting an
outsized restraint from its competitor.
Accordingly, defendants oppose the TRO sought by plaintiff in its entirety. Defendants remain
available at the Court's convenience to discuss this matter further.
Respectfully Submitted,
/s/ Emily Kirsch
Emily Kirsch
I On July 31, 2019 Elegran filed the C-hit in the instant action and moved for a TRO and Preliminary
L=jn.nction without notice to defendants in violation of Your Honor's individual rule 54 which provides that "TRO
applicents must email their epplication to opposing counsel, copied to the court at mand ..fcourts.gov, at least 24
hours in advance of the hearingsought."
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EXHIBIT A
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK - COMMERCIAL DIVISION
ELEGRAN LLC d/b/a ELEGRAN REAL
ESTATE,
Plaintiff,
- against - Index No. 654370/2019
URBAN COMPASS, INC. d/b/a/
COMPASS REAL ESTATE and ZINO
ANGELIDES,
Defendants.
Temporary Consent Order
The parties hereby consent and agree that from the date of entry hereof until such
time as the shorter of five (5) weeks or this Court’s issuance of an Order on plaintiff’s
motion for preliminary injunction currently pending before this Court, that:
1. Defendant Zino Angelides (“Angelides”) shall not:
a. use, copy, disseminate or disclose any confidential and proprietary
information belonging to Plaintiff Elegran, LLC (“Elegran”), including but
not limited to (a) lists, files, data and electronically stored information
relating to Elegran’s clients, prospective clients, employees, and independent
contractors; (b) information and data concerning Elegran’s business plans,
policies, operating procedures, pricing, profits, costs, supplies, margins,
merchandising, plans and strategies, finances, financial and accounting data
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and information, sales and marketing plans; and (c) any other information
which is confidential and proprietary to Elegran;
b. entice, solicit, encourage, or otherwise attempt to cause any current employee
or current independent contractor of Elegran to: (a) leave his or her employ
of or association with Elegran, or (b) violate or breach any contractual
relationships or agreements of any kind whatsoever with Elegran;
2. Defendant Urban Compass, Inc. d/b/a/ Compass (“Compass”) shall not:
a. use, copy, disseminate or disclose any confidential and proprietary
information belonging to Plaintiff Elegran, LLC (“Elegran”) that is obtained
from Mr. Angelides, directly or indirectly, including but not limited to (a)
lists, files, data and electronically stored information relating to Elegran’s
clients, prospective clients, employees, and independent contractors; (b)
information and data concerning Elegran’s business plans, policies,
operating procedures, pricing, profits, costs, supplies, margins,
merchandising, plans and strategies, finances, financial and accounting data
and information, sales and marketing plans; and (c) any other information
which is confidential and proprietary to Elegran.
b. permit Angelides to be involved in any way, directly or indirectly, with any
efforts to entice, solicit, encourage or otherwise attempt to cause any current
employee or current independent contractor of Elegran to leave his or her
employ of or association with Elegran.
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______________________________
Grant R. Cornhels
WARSHAW BURSTEIN, LLP
555 Fifth Avenue
New York, New York, 10017
Office: (212) 984-7700
Email: [email protected]
ATTORNEYS FOR PLAINTIFF
ELEGRAN LLC
______________________________
Emily Bab Kirsch
KIRSCH & NIEHAUS. LLC
150 East 58th Street, 22nd Floor
New York, NY 10155
Office: (212) 832-0170
Email: [email protected]
ATTORNEYS FOR DEFENDANTS,
URBAN COMPASS, INC. AND ZINO
ANGELIDES
SO ORDERED:
_____________________________________
Hon. Jennifer Schecter