United States District Court, D. New Jersey
ESTATE OF CHRISTOPHER MAYNARD, deceased, by and through its administrator, ARTHUR MAYNARD Plaintiff,
ALLEN MACKLEY and CMIVFX, INC., an Oregon Corporation Defendants.
BRIAN R. MARTINOTTI United States District Judge.
this Court is an Order to Show Cause (ECF No. 7) why Plaintiff
Estate of Christopher Maynard (the “Estate” or
“Plaintiff”) should not be granted a preliminary
injunction enjoining Defendants Allen Mackley
(“Mackley”) and CMIVFX, Inc.
“Defendants”) “from, inter alia,
the continued misappropriation of the Estate's
intellectual property, unlawful access to the Estate's
computer data, and the conversion of the Estate's payment
accounts.” (Pl.'s Mot. for TRO (ECF No. 6-1) at 1.)
Pursuant to Federal Rule of Civil Procedure 78(a), the Court
heard oral argument on May 3, 2017. Upon reviewing the papers
submitted by the parties and considering the arguments of
counsel, for the reasons set forth below, Plaintiff's
application is DENIED.
matter involves Mackley's alleged appropriation of the
tangible and intangible assets of CMI Studios, LLC, d/b/a
“cmiVFX” (“CMI”), a visual effects
company. Arthur Maynard (“Arthur”) is
the administrator of the Estate, which owns all of CMI's
assets. According to Plaintiff, Mackley, a former contractor
of CMI, used the premise of a tentative agreement to buy CMI
to gain access to CMI's PayPal payment accounts,
intellectual property, and website. Plaintiff alleges Mackley
then repudiated the tentative agreement, changed the PayPal
account passwords and PIN numbers, and used a newly created
entity, CMIVFX, to seize control of CMI's assets.
contends the Estate and Mackley had negotiated the sale of
CMI to Mackley beginning in June 2016. (ECF No. 1
¶¶ 33-45.) After a series of proposals, Mackley and
the Estate tentatively agreed to a transaction in which a
newly formed corporation, CMIVFX, would acquire CMI.
(Id. ¶¶ 46-47.) Mackley would hold a 50%
interest in CMIVFX, Arthur would hold a 25% interest, and 25%
would be held as treasury stock. (Id. ¶ 47.)
requested access to CMI's PayPal account to review the
company's transactions, and Arthur granted access for the
limited purpose of that review. (Id. ¶¶
59-60.) Plaintiff alleges Arthur later tried to access the
account but could not, as the login information had been
changed. (Id. ¶ 67.) Arthur immediately
contacted Mackley about the change, and Mackley claimed he
had changed the login information because he had more rights
to CMI than Arthur or anyone else. (Id. ¶¶
68-69.) Arthur and Mackley began negotiations and appeared to
resolve this dispute, and Mackley provided Arthur with the
new login information to the PayPal account. (Id.
¶¶ 71-74.) However, the login information Mackley
provided to Arthur gave Arthur only limited access to review
the account and did not allow for any control over the
account. (Id. ¶ 74.)
alleges Defendants then filed an application with the United
States Patent and Trademark Office (“USPTO”)
seeking to register a mark for CMIVFX. (Id. ¶
75.) Plaintiff alleges the application was willfully false,
as it utilized CMI's tradename, “CMIVFX, ”
registered a mark substantially similar to CMI's, and
directed USPTO to CMI's website. (Id.
¶¶ 76-78.) Plaintiff contends neither Mackley nor
CMIVFX had the right or authority to use CMI's intangible
property in the application, as there was no formal agreement
regarding the transfer of CMI's assets. (Id.
¶¶ 79-80.) Plaintiff further maintains
Defendants' application to USPTO falsely claimed no other
party had rights to use CMI's mark. (Id. ¶
81.) Further, Plaintiff alleges, Mackley knew this claim was
false, as he had acknowledged Arthur's rights to CMI as
administrator of the Estate one day before filing the
application. (Id. ¶ 82.)
August through December of 2016, Mackley and the Estate
continued to negotiate the terms of the transaction, the
structure of the new corporation, and Mackley's
acquisition of certain storage devices containing CMI files.
(Id. ¶¶ 83-89.) Plaintiff alleges Mackley
repudiated any agreement and refused to return tangible and
intangible property belonging to the Estate. (Id.
¶¶ 89-90.) Plaintiff filed the Complaint and ex
parte motion for a temporary restraining order in this action
on March 10, 2017.
injunctive relief is an ‘extraordinary remedy, which
should be granted only in limited circumstances.'”
Ferring Pharms., Inc. v. Watson Pharms., Inc., 765
F.3d 205, 210 (3d Cir. 2014) (quoting Novartis Consumer
Health, Inc. v. Johnson & Johnson-Merck Consumer Pharms.
Co., 290 F.3d 578, 586 (3d Cir. 2002)). “A
plaintiff seeking a preliminary injunction must establish
that he is  likely to succeed on the merits,  that he
is likely to suffer irreparable harm in the absence of
preliminary relief,  that the balance of equities tips in
his favor, and  that an injunction is in the public
interest.” Ferring, 765 F.3d at 210 (quoting
Winter v. Natural Resources Defense Council, Inc.,
555 U.S. 7, 20 (2008)). The movant bears the burden of
showing these four factors weigh in favor of granting the
injunction, and a failure to establish any one factor will
render a preliminary injunction inappropriate. Id.
has not met the significant threshold for a preliminary
injunction. Plaintiff has the burden to prove the likelihood
of success on the merits and fails to demonstrate this
factor. A party proves a likelihood of success on the merits
by demonstrating a “reasonable probability of
eventual success in the litigation . . . .” South
Camden Citizens in Action v. N.J. Dep't of Envt'l.
Prot., 274 F.3d 771, 777 (3d Cir. 2001) (emphasis
added). Plaintiff has not shown its success is probable, as
Defendants refute much of Plaintiff's account with
similarly plausible arguments.
who acknowledge Plaintiff is a 25% shareholder in the
business (Decl. of Allen Mackley (ECF No. 12) ¶¶
14-19), characterize the dispute underlying this litigation
as one between business partners. (Defs Opp. (ECF No. 11) at
11.) Defendants maintain Mackley has abided by the terms
Arthur himself proposed and to which Mackley agreed on June
20, 2016. (Id. at 1-2.) The June 20-22, 2016 email
exchange between Mackley and Arthur suggests the parties
agreed to the basic elements of a deal: (1) Mackley would
have control over the operations of the company; (2) the
company would be known as CMIVFX; (3) the company would be
incorporated in Oregon, the state where Mackley resides; (4)
the stock would be split with 50% going to Mackley, 25% to
Christopher's estate, and 25% held as treasury stock; and
(5) Arthur would be listed as the company's
secretary/treasurer. (ECF No. 12-4 at 2-4.) While the parties
later disagreed about several issues (see, e.g., ECF
No. 1-5), the June 20-22, 2016 email exchange indicates the
parties had a meeting of the minds about going into business
together and how that business would operate.
contend this dispute arose after Mackley rejected
Arthur's proposal that CMIVFX pay Arthur an annual
royalty of 15% of CMIVFX's revenues. (ECF No. 11 at 10.)
Defendants maintain the parties never discussed such a
royalty and Arthur first proposed it in a November 29, 2016
email-more than five months after the parties agreed via
email to the terms of the new business. (ECF No. 12 ¶
32.) Defendants note Plaintiff's own submissions to the
Court reveal the proposed royalty was not among the ...