Setter Capital, Inc. v Chateauvert

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Setter Capital, Inc. v Chateauvert 2020 NY Slip Op 32341(U) July 15, 2020 Supreme Court, New York County Docket Number: 651992/2020 Judge: Andrea Masley Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] NEW YORK COUNTY CLERK 07/16/2020 04:56 PM NYSCEF DOC. NO. 58 INDEX NO. 651992/2020 RECEIVED NYSCEF: 07/16/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART IAS MOTION 48EFM -------------------------------------------------------------------------------X SETTER CAPITAL, INC. INDEX NO. Plaintiff, 651992/2020 MOTION DATE N/A MOTION SEQ. NO. 001 -vMARIA CHATEAUVERT, DECISION+ ORDER ON MOTION Defendant. -----------------------------------------------------------------------------------X HON. ANDREA MASLEY: The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,21, 22, 23,24,26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39,40, 41,42,43,44,45,46,47,48,49, 50, 51, 52, 53, 54, 55, 56, 57 were read on this motion to/for INJUNCTION/RESTRAINING ORDER Upon the foregoing documents, it is DENIED Plaintiff Setter Capital, Inc. (Setter) moves, pursuant to CPLR 6301, for a preliminary injunction enjoining its former employee defendant Maria Chateauvert from "directly or indirectly soliciting, inducing or recruiting or attempting to interfere with the relationship between plaintiff and any customer, client supplier, licensee or other business relation of plaintiffs or otherwise disrupt, damage, impair or interfere in any manner with the business of plaintiff until February 3, 2022." (NYSCEF Doc. No. [NYSCEF] 7, Proposed Order to Show Cause.) Plaintiff has the burden to establish: (1) a likelihood of success on the merits of the action; (2) the danger of irreparable injury in the absence of preliminary injunctive relief; and (3) a balance of equities in favor of the moving party. (Nobu Next Door, LLC v Fine Arts Housing, Inc., 4 NY3d 839, 840 [2005].) Setter describes itself as serving a "niche market" using its "proprietary second~ryw 65199212020 SEITER CAPITAL, INC. vs. CHATEAUVERT, MARIA Motion No. 001 1 of 6 Page 1 of6 [*FILED: 2] NEW YORK COUNTY CLERK 07/16/2020 04:56 PM NYSCEF DOC. NO. 58 INDEX NO. 651992/2020 RECEIVED NYSCEF: 07/16/2020 market network, Secondarylink™ - a go-to hub for over 5,000 institutional investors, maqagers and industry participants to follow the ever-evolving secondary market and to connect and collaborate on diligence and secondaries on over 9,000 private equity, real estate, infrastructure, real asset and hedge fund families and over 20,000 funds." (NYSCEF 1, Complaint 1I 13.) Setter's proprietary information is located on Secondarylink™, including "the Setter Liquidity Rating" which ranks thousands of funds according to their liquidity, sale~bi!ity --:·:. ,v.i,; 'f, and popularity. (ld.1J 14.) Setter updates and keeps Setter Liquidity Rating current atnsroWn expense." (Id.) For 14 years, Setter has collected "current and past pricing of funds ancPffonpublic details about various buyers and sellers such as their goals, general and trade preferences, transaction history, assets, current and past investments, investments sizes, plans, strategies, assets desired to sell, assets desired to buy, preferred geographical · ;ng "ti •:.: investment locations, and other information not available to the public and essential to ~~i!tlay '/ to day operation of Setter Capital's business." (Id. 1J 15.) At issue are confidentiality and non-compete provisions in a September 16, 2013r agreement (NYSCEF 2) that defendant signed two years after graduation from college in exchange for a salary of $45,000 (Agreement). (NYSCEF 29, Chateauvert aff 1I1J 3, 6, 12, 14, 16, 18.)1 The Agreement states the scope of defendant's employment is to provide "a hl~ihly personal service on a sustained and recurring basis to the Clients of Setter Capital." {N'¥S'he'F 8, Agreement at 1.) Specifically, defendant describes her job as making cold calls using script and sending emails to identify buyers and sellers in the secondary market which would pass off to a more senior Setter employee. (Id. 1I1J 26, a· sh~;; 29, 31, 52.) 1 All parties shall meaningfully identify exhibits and other documents in NYSCEF. For . example, identifying an affidavit as "Affidavit" is insufficient and useless. Please reviewr~f(e?~l Part 48 Rules and Procedures. 651992/2020 SETTER CAPITAL, INC. vs. CHATEAUVERT, MARIA Motion No. 001 2 of 6 Page2 of6 r [*FILED: 3] NEW YORK COUNTY CLERK 07/16/2020 04:56 PM NYSCEF DOC. NO. 58 INDEX NO. 651992/2020 RECEIVED NYSCEF: 07/16/2020 "The Secondary Market (a.k.a., the Private Equity Secondary Market) is a marketplace for buying and selling Limited Partners' ('LPs') interests in private equity funds, and other alternative investments. The LP's interests come in different shapes and forms (e.g., private equity, venture capital, real estate, etc.) and are desirable to 'institutional investors,' and accredited investors."' (/d.1'f47.) According to defendant, the secondary market differs from wealth management, general accounting or other professional services industries because there are no exclusive relationships. (Id. mf 38-46.) While defendant admits that plaintiff gave her a list, she asserts -~}:(:{~~:-,-,:·:< \ that such information is publicly available and describes how and where it is available:£{~1MT d\ ....~ :-- 1-- ~ \...J- 34, 35.) Eventually, in 2017, defendant was promoted to match buyers and sellers for wfi1ch i'•::··;n<~J she was paid a commission (Id. mr 53, 64.) Defendant resigned in February 2020; at which time, she was earning $85,000 plus commission. (NYSCEF 1, Complaint 111; NYSCEF 29, defendant, a Canadian resident. Although the Agreement includes a choice of law and selection clause in which the parties agreed to submit to this court's jurisdiction, it is uncfE¥at 1• that such tender is enforceable under the NY General Obligations Law (GOL). GOL § 5-1401 provides for the enforcement of choice of law provisions in contracts over $250,000 and GOL § 5-1402 provides for the enforcement of forum selection provisions in contracts over $1,000,000. (/RB-Brasil Resseguros, S.A. v lneparlnvestments, S.A., 20 NY3d310, 3 . [2012] ("The goal of General Obligations Law§ 5-1401 was to promote and preserve 'j _::-";;:>,<. ~;~ NJWw1 , : ,-,-· York's status as a commercial center and to maintain predictability for the parties."}, certrf!';tW denied 569 US 994 [2013]}. However, GOL §5-1401 does not apply to contracts "for labor or personal services," and the Agreement here states that the employee is "to provide a highly personal service on a sustained and recurring basis to the Clients of Setter Capital." {NYSCEF 8, 651992/2020 SETTER CAPITAL, INC. vs. CHATEAUVERT, MARIA Motion No. 001 3 of 6 Agreemenf~{{) Page 3 of 6 · [*FILED: 4] NEW YORK COUNTY CLERK 07/16/2020 04:56 PM NYSCEF DOC. NO. 58 INDEX NO. 651992/2020 RECEIVED NYSCEF: 07/16/2020 ~t i . -; Further, "NY-GOL § 5-1402 provides that an action based on a contract may be maintaine9in a New York court against a non-resident where: (1) the contract contains a choice of law clause pursuant to NY-GOL § 5-1401 .... " (CPI NA Pamassub B. V. v Omelas-Hemandez, 2009 NY Slip Op 30259[U], *7 [Sup Ct, NY County 2009].) Thus, if GOL §5-1401 is not applicable here, in tum neither is GOL §5-1402. (Barden Solutions, Inc. v Bassetti, 18 Misc 3d 1144[A], 1144A, 2005 NY Slip Op 52351[U], *2 [Sup Ct, Monroe County 2005].) Moreover, the court questions whether defendant, two years out of college when she signed the Agreeilil~rlf. was the sophisticated business person the legislature envisioned in 1985 when GOL §5':'.1401 and §5-1402 were enacted. (See_IRB-Brasil Resseguros, S.A., 20 NY3d 310, 314 [2012] (The Sponsor's Memorandum states, "In order to encourage the parties of significant commercial, mercantile or financial contracts to choose New York law, it is important ... that the parti~s1 6e J certain that their choice of law will not be rejected by a New York Court" [id. at 8]. The ~ Legislature desired for parties with multi-jurisdictional contacts to avail themselves of ~~~rk law if they so designate in their choice-of-law provisions, in order to eliminate uncertairity!aJi\B to permit the parties to choose New York's "well-developed system of commercial jurisprudence." [id. at 7]). If the court cannot exercise jurisdiction pursuant to the Agreement, then plaintiff m6gf ·. \,\::;· ..-Jr establish jurisdiction. (High St. Capital Partners, LLC v ICC Holdings, LLC, 2019 N.Y. Slip Op. ; ',;A;_~·,~·:;- ·'r·.~ 31361 [U] [Sup Ct, NY County 2019].) Here, the court finds this as an issue of fact thatf:'~vt"ft undermines plaintiffs likelihood of success. "While the existence of issues of fact alone\~irWHot justify denial of a motion for a preliminary injunction, the motion should not be granted where there are issues that "subvert the plaintiffs likelihood of success on the merits ... to such a degree that it cannot be said that the plaintiff established a clear right to relief." (Matter ~~st' 651992/2020 SETTER CAPITAL, INC. vs. CHATEAUVERT, MARIA Motion No. 001 4 of 6 Page4of6 [*FILED: 5] NEW YORK COUNTY CLERK 07/16/2020 04:56 PM NYSCEF DOC. NO. 58 INDEX NO. 651992/2020 RECEIVED NYSCEF: 07/16/2020 Advanced Digital Sec. Sols., Inc. v Samsung Techwin Co., Ltd., 53 AD3d 612, 613 [2d Dept 2008] [internal quotation marks and citations omitted].) In addition to the issue of jurisdiction, plaintiff fails as to likelihood of success on the merits as its presentation is insufficient to establish a protectable trade secret. The elements of a protectable trade secret are: "{1) the extent to which the information is known outside,of [the] business; (2) the extent to which it is known by employees and others involved in [the] business; (3) the extent of measures taken by [the business] to guard the secrecy of t~~k:pt information; (4) the value of the information to [the business] and [its] competitors; (5) the amount of effort or money expended by [the business] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others." (Ashland Mgt. Inc. v Janien, 82 NY2d 395, 407 [1993], quoting Restatement of TqA:s § 757, comment b.) Plaintiff fails to counter Chateauvert's description of her job which was'fb make thousands of cold calls. 2 Likewise, plaintiff fails to respond to whether the lists, 'incfuCling personal contact information, are publicly available or not. Rather, defendant's explanation for why buyers and sellers want their contact information to be public makes sense and undermines plaintiff's unsupported assertion otherwise. Further, the admitted availability of plaintiff's liquidity rating online undermines an'ybf{~; argument that it is confidential. Plaintiff's submission is silent as to efforts taken to prote~~ithis <' - secret contact information. Plaintiff relies on NDAs mentioned in defendant's emails t' -, ' -"'-,'. '~ buftMffs fb provide copies of such NDAs. From the emails, it appears that the NDAs concern deal defalis' Despite being invited to submit a reply brief, and the court asking again at the argumen(on July 14, 2020, plaintiff failed to describe the industry any differently. The court incorpo.rnt~~the transcript of the argument on this motion in this decision. Plaintiff is directed to submit the transcript to be so ordered. , 2 651992/2020 SETTER CAPITAL, INC. vs. CHATEAUVERT, MARIA Motion No. 001 5 of 6 Page 5 of 6 ::tl;llt:; [*FILED: 6] NEW YORK COUNTY CLERK 07/16/2020 04:56 PM NYSCEF DOC. NO. 58 INDEX NO. 651992/2020 RECEIVED NYSCEF: 07/16/2020 and not plaintiff's secret database. Therefore, preliminarily, plaintiff has failed to satisfyillfny of -- '...; -. - ~ ' ;; ; ~\ ;: the necessary elements for a protectable trade secret. Plaintiff also fails to establish irreparable harm. While plaintiff fails to address irreparable harm or even mention damages that does not preclude the fact that money damages are available. Indeed, the harm that plaintiff asserts is the diversion of future deals which is hardly irreparable. Finally, the balance of equities favors defendant. The requested injunction is impermissibly broad such that defendant will lose her livelihood. 3 The purpose of a noncompete is to prevent unfair competition; not competition altogether. (BOO Seidman v Hirshberg, 93 NY2d 382 [1999].) Accordingly, it is ORDERED that the motion is denied, and all TROs are vacated; and it is further . ORDERED that no party has requested permission to redact, yet the parties filed numerous redacted documents in NYSCEF. All parties are directed to follow the law and this part's rules concerning sealing and redacting documents filed in NYSCEF within 10 days of this decision and order. Otherwise, parties shall be ordered to file all documents with no redactions, may be subject to financial penalties or any other appropriate remedy. CHECK ONE: CASE DISPOSED APPLICATION: SETTLE ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN GRANTED 0 NON-FINAL DISPOSITION DENIED 8 GRANTED IN PART SUBMIT ORDER FIDUCIARY APPOINTMENT D D 3 OTHER REFERENCE The court notes that Justice Marcy Friedman, who heard this motion when it was initially filed on June 8, 2020, rejected plaintiff's requested TRO as overly broad. (NYSCEF 45 Transcript 14:1-7.) ' . '.· 651992/2020 SETTER CAPITAL, INC. vs. CHATEAUVERT MARIA Motion No. 001 ' 6 of 6 Page 6of6

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