United States District Court, D. New Jersey
Todd C. Rubenstein, Esquire, Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf, LLP, Lake Success, New York, Attorney for Plaintiff Scott Kacmarski.
James M. Carter, Esquire, Law Offices of Hoffman and DiMuzio, Turnersville, New Jersey, Attorney for Defendants John Eppehimer and Rising Tide, Media, LLC.
MEMORANDUM OPINION ORDER TO SHOW CAUSE
NOEL L. HILLMAN, District Judge.
WHEREAS, presently pending before the Court is the motion of Plaintiff, Scott Kacmarski, for the appointment of a temporary receiver for Sportfishermen.com and for a preliminary injunction to enjoin Defendants, John Eppehimer and Rising Tide Media, LLC ("Rising Tide Media"), from accessing, directly or indirectly, any funds, income or assets of Sportfishermen.com, or in any manner interfering with the ordinary day-to-day operations of Sportfishermen.com; and
Defendants having initially opposed Plaintiff's motion, but having since withdrawn their opposition; and
By way of background, it appearing that:
On July 11, 2011, Scott Kacmarski purchased a 50% ownership interest in Rising Tide Media for $228, 000. According to Plaintiff's complaint, Rising Tide Media is managed and operated by only one member, John Eppehimer, who owns the domain "Sportfishermen.com." The purchase was never formalized in a written agreement, but was confirmed through a series of messages between the parties, including a bank wire transfer from Plaintiff to Rising Tide Media. Despite numerous attempts, Plaintiff claims that he never received Rising Tide Media's Operating Agreement and he was never given access to its books and records. Further, Plaintiff claims that he never received any investment compensation and profits. Plaintiff has submitted bank statements and claims that Eppehimer used Rising Tide Media's financial holdings as a personal bank account, with purchases including transactions at hardware and crafts stores, watersport dealerships, and at casinos and ATMs in Atlantic City, New Jersey. Plaintiff also claims that Eppehimer threatened him to remain silent on his findings or else he would "get nothing..., " and via text message Eppehimer threatened to purge Rising Tide Media of its assets. Finally, Plaintiff claims that Eppehimer admitted that he never filed tax returns for Rising Tide Media.
WHEREAS, Plaintiff having brought this action asserting claims for breach of contract, unjust enrichment/quantum meruit, fraud, breach of fiduciary duty, accounting, and is seeking a declaratory judgment; and
Plaintiff having asked this Court to appoint a temporary receiver for Sportfishermen.com to prevent further corporate mismanagement and misuse of funds; and
Plaintiff having also asked this Court to issue a preliminary injunction to enjoin John Eppehimer and Rising Tide Media from accessing directly or indirectly, any funds, income or assets of Sportfishermen.com, or in any manner interfering with the ordinary, day-to-day operations of Sportfishermen.com; and
The Court noting that on October 2, 2014, Sportfishermen.com went "white" and only the forum page remained, and although Eppehimer responded in a letter acknowledging the problem and assuring the Court that he was working to fix it, as of the date of this Opinion, the website remains "white"; and
The Court further noting that on December 3, 2014, Eppehimer having filed Chapter 7 Bankruptcy, listing Plaintiff as an unsecured creditor (Docket No. 46); and
Federal Civil Procedure Rule 66 providing that the Court has the power to appoint a receiver in pending litigation, Stonebridge Bank v. Nita Properties, LLC, No. CIV. 09-5145 RBK/JS, 2011 WL 2173771, at *1 (D.N.J. June 1, 2011), and an evidentiary hearing is not needed prior to granting receivership if "the record discloses sufficient facts to warrant appointment of a receiver, " Leone Indus. v. Assoc. Packaging, Inc., 795 F.Supp. 117, 120 n.6 (D.N.J. 1992) (citation omitted), although the appointment of a temporary receiver is an extraordinary form of relief and should be granted only "in the face of compelling circumstances and in the absence of a less dramatic remedy, " id. at 120; and
A party seeking receivership must demonstrate: (1) a legally recognized equitable interest in the property that amounts to more than a mere claim against the defendant; and (2) an imminent danger of property being lost, injured, diminished in value or squandered, and where other legal remedies ...