NY Real Estate v Edelman C.

[*1] NY Real Estate v Edelman C. 2006 NY Slip Op 52589(U) [15 Misc 3d 1119(A)] Decided on September 12, 2006 Supreme Court, New York County DeGrasse, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through April 27, 2007; it will not be published in the printed Official Reports.

Decided on September 12, 2006
Supreme Court, New York County

NY Real Estate,

against

Edelman C.



602760/06

Leland G. DeGrasse, J.

Plaintiff, the operator of a real estate school, moves for an order preliminarily enjoining defendant from participating in the operation of any competing entity. Defendant cross-moves for an order dismissing the complaint pursuant to CPLR 3211 (a) (1) and (4). By purchase agreement dated December 16, 2003, plaintiff acquired the real estate school business of an entity which had been owned by defendant. In conjunction with the transaction, the parties entered into an agreement not to compete also dated December 16, 2003. The agreement provided that defendant would not engage in a similar business "for a period of four (4) years within a 50 (fifty) mile radius of 132 West 36th Street, New York, NY (but only two (2) years within Long Island)." It is alleged in the complaint that defendant breached the agreement not to compete by engaging himself in the business of American Real Estate School, an entity located in Hauppauge, New York. The relief prayed for in the instant complaint includes a permanent injunction and money damages.

Plaintiff previously sued defendant in this court in an action captioned RFAL, Inc. v Edelman (index number 602067/05).[FN1]The breaches alleged in the instant complaint are also alleged in the RFAL complaint which plaintiff verified on April 22, 2005. However, the relief prayed for in the RFAL complaint was limited to money damages. On or about February 14, 2006, this court transferred the RFAL action to the Civil Court of the City of New York pursuant to CPLR 325 (d). Civil Court (Kenney, J.) granted plaintiff's motion to discontinue the RFAL action by order dated August 17, 2006.

Defendant seeks a dismissal of the injunction causes of action on the ground that two-year Long Island restriction set forth in the agreement not to compete has expired. However, Goldberg Co. v Stern (53 AD2d 246, 250 [1976]) supports the proposition that a restrictive covenant may be extended for the duration of a breach upon proof that such a breach occurred during its term. Plaintiff has submitted the affidavit of Richard Levine, its principal, and a course approval application filed with the Department of State by American. The application is dated February 2, 2004 and lists defendant as American's coordinator. Plaintiff has also submitted a copy of a September 9, 2004 email to defendant from an entity named Thomson CompuTaught, a provider of online courses. The email references defendant's interest in becoming an approved provider for Thomson. Accordingly, the injunction cause of action appears to be viable. In addition, the discontinuance of the RFAL action refutes defendant's argument that another action between the parties involving the same claims is pending.

Plaintiff was aware of the facts underlying defendants alleged breach of the agreement not to compete as early as April 2005 when it verified the RFAL complaint. Yet plaintiff did not seek a preliminary injunction until August 8, 2006 when the instant order to show cause was signed. Under the circumstances, the unexplained 16-month delay constitutes a ground for the denial of preliminary injunctive relief (cf. De Candido v Young Stars, 10 AD2d 922 [1960]; Schwarz v Ferrara, 63 Misc 2d 135, 137 [1970]). Moreover, the function of a preliminary injunction is to maintain the status quo until there can be a full hearing on the merits (Olympic Tower [*2]Condominium v Cocoziello, 306 AD2d 159, 160 [2003]). To grant the requested preliminary injunction at this late date would disrupt the status quo. For the foregoing reasons, the motion and cross motion are denied. A preliminary conference shall be conducted on October 23, 2006 at 2:00 p. m.

Footnotes

Footnote 1: Plaintiff entered into the purchase agreement under RFAL's name.

Dated: September 12, 2006 J. S. C.



J. S. C.

HON. LELAND DeGRASSE