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Maximum Quality Foods, Inc. v. DiMaria

United States District Court, D. New Jersey

December 10, 2014

MAXIMUM QUALITY FOODS, INC., Plaintiffs,
v.
JOSEPH DIMARIA & WILLOW PROVISIONS, INC., Defendants

For MAXIMUM QUALITY FOODS, INC., Plaintiff: SALVATORE GABRIEL ROCCARO, LEAD ATTORNEY, CASTANO QUIGLEY LLC, FAIRFIELD, NJ.

For JOSEPH DIMARIA, WILLOW PROVISIONS INC., Defendants: DARIN BILLIG, LEAD ATTORNEY, Park & Nguyen, Newark, NJ.

OPINION

Jose L. Linares, United States District Judge.

This matter comes before the Court by way of the application of Plaintiff Maximum Quality Foods, Inc. (" Plaintiff")'s Order to Show Cause pursuant to Federal Rule of Civil Procedure 65 and Local Rule of Civil Procedure 65.1 as to why Defendants Joseph DiMaria (" DiMaria") and Willow Provisions Inc. (" Willow") (Collectively " Defendants") should not be temporarily and preliminarily enjoined from, inter alia, using or disclosing confidential and proprietary information and/or trade secrets of Plaintiff. The Court has considered the submissions of both parties in support and in opposition to the present application, as well as the arguments presented by the parties at oral argument held on November 24, 2014. Based on the foregoing reasons, Plaintiff's application is denied.

I. BACKGROUND

Plaintiffs filed the instant Complaint and application for an Order to Show Cause in this matter in the Superior Court of New Jersey, Chancery Division, Union County on October 16, 2014. (ECF No. 1:1-2). Defendants removed this matter to this Court on October 22, 2014. (Id.) Plaintiff is a regional food distribution business located primarily in Linden, New Jersey. (Comp. at ¶ 2). DiMaria is the sole owner and operator of Willow, as well as a former employee of Plaintiff. (Id. at ¶ 3). Willow is a regional food distribution business located in New York. (Id. at ¶ 4). On August 26, 2014, Plaintiff executed an " Asset Purchase Agreement" (" APA") with DiMaria and Willow in which Plaintiff purchased all customer lists, and all files, records, and documents relating to the customers of Willow, as well as Willow's good will in connection with Defendants' business. (Id. at ¶ 7). Plaintiffs also paid Defendants $250, 000 and entered into an " Employment Agreement" with DiMaria, pursuant to which he would be a salesman for Plaintiff and aid in the transition of customers. (Id.) Both the APA and the Employment Agreement contain non-competition covenants. (Id.)

Plaintiff alleges that DiMaria intentionally disregarded the APA and Employment agreement by continuing to service, through Willow, the very same customers Plaintiff acquired through the APA. (Id. at ¶ ¶ 8-10). DiMaria diverted product sales from Plaintiff to Willow, collected revenues related to such sales without remitting them to Plaintiff, and serviced said customers by purchasing products from vendors and providing deliveries to the customers through Willow. (Id.)When Plaintiff reached out to these customers regarding their pending or anticipated orders, Plaintiff was informed that the customers already received their products and no longer needed delivery from Plaintiff. (Id. at ¶ 11). Plaintiff contends that when Plaintiff's owner and president Gary Roccaro confronted DiMaria regarding his alleged breach, DiMaria admitted to servicing the customers through Willow. (Id.)

On October 12, 2014, Plaintiff reached out to thirty six (36) customers whose sales relationships were acquired by Plaintiff through the APA, for Monday orders. (Id. at 12). Many of those customers informed Plaintiff that they would call DiMaria directly or that DiMaria would call them directly for an order, thereby circumventing Plaintiff. (Id.) Out of the thirty six customer who normally purchase products weekly on Sunday, Plaintiff only received three (3) orders, two of which were returned when the customers informed Plaintiff that DiMaria had already delivered the products. (Id ). Plaintiffs also allege that on September 24, 2014, DiMaria improperly retained and has continued to use the customer list, which Plaintiff acquired from Defendants as part of the customer information and records listed in the APA. (Id. at ¶ 53). On October 17, 2014, DiMaria received a letter from Plaintiff terminating his employment. (DiMaria Cert. ¶ 29).

On October 31, 2014, this Court granted Plaintiff's application for temporary restraints, requiring Defendants to:

1. Return all of Plaintiff's proprietary information immediately, and any information derived therefrom, including all copies thereof whether in hard copy, electronic form or computer readable form; and
2. Preserve all documents and other evidence, including files, data, or communications in electronic form.

(ECF No. 6 at 3).

II. LEGAL STANDARD

Federal Rule of Civil Procedure 65 permits District Courts to grant temporary restraining orders. Fed.R.Civ.P. 65(b). Injunctive relief is an " 'extraordinary remedy' and 'should be granted only in limited circumstances.'" Kos Pharms. Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir.2004) (quoting Am. Tel. & Tel. Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1427 (3d Cir.1994)). A court may grant an injunction only if a party shows: " (1) a likelihood of success on the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) that the public interest favors such relief." Kos Pharms., 369 F.3d at 708. A party must produce sufficient evidence of all four factors--and a district court should weigh all four--prior to granting injunctive relief. Winback, 42 F.3d ...


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