Plaza Motors of Brooklyn, Inc. v. Bogdasarov

MEMORANDUM AND ORDER GRANTING PRELIMINARY INJUNCTION

Kiyo A. Matsumoto United States District Judge

This memorandum and order memorializes the court's oral ruling at the hearing on November 30, 2021 regarding Plaintiffs' motion for a temporary restraining order or preliminary injunction, during which the court granted Plaintiffs' motion for a preliminary injunction from the bench.

FACTUAL FINDINGS

Having considered the materials in the record, the court makes the following factual findings.

Since 1975, Plaza Auto Mall (“Plaza”) has been the trade name of a group of automobile dealerships on Nostrand Avenue in Brooklyn, New York. (ECF No. 6 (“Rosatti Decl.”) ¶ 4.) At various times, these dealerships have included and conducted business as Plaza Honda, Plaza Toyota, Plaza Kia, Plaza Hyundai, and Acura of Brooklyn. (Id.) Plaintiff Plaza Motors of Brooklyn, Inc. currently does business as Plaza Honda, and Plaintiff Crystal Bay

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Imports, Ltd. currently does business as Acura of Brooklyn. (Id. ¶ 9.)

Plaza Auto Mall has become well known to consumers of automobiles in Brooklyn, Queens, and Staten Island. (Id. ¶ 5.) For decades, Plaza has marketed the Plaza brand and cultivated relationships with its customers, many of whom purchase or lease a new vehicle every few years. (Id. ¶ 6.) These customer relationships are critical to Plaza's business. (Id. ¶ 7.)

Plaza maintains databases of customer information in order to cater to customers' preferences and anticipate customers' needs. (See Id. ¶¶ 6, 10.) In particular, Plaza's CDK and Elead databases contain the names and contact information for all of its customers. (Id. ¶¶ 10, 17.) The databases also contain details about all vehicles sold or leased to each customer, including the type of vehicle, the model year of the vehicle, and the lease amount or sales price of the vehicle. (Id.) Plaza takes measures to keep this information secret, including by restricting access to its databases to managerial employees who access the information using their own log-on credentials. (Id. ¶ 11.) Plaintiffs employed Defendant Andron Bogdasarov as a Fleet Manager from February 21, 2012, until his resignation on June 21, 2021. (Id. ¶ 9.) Throughout his tenure at Plaza, Defendant brokered sales to corporate customers and did not work with individual consumers. (Id. ¶ 19.) Because he was a manager

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rather than a salesperson, Defendant had access to Plaza's CDK and Elead databases that contain information about all of Plaza's customers and the vehicles leased or sold to each customer. (Id. ¶¶ 10, 17.)

On February 24, 2012, Bogdasarov signed a Confidentiality and Nondisclosure Agreement. (ECF No. 6-1 (“NDA”).) Among other things, Bogdasarov agreed that he would hold Plaza's confidential and proprietary information in trust and confidence and would use the information only for Plaza's contemplated business purposes. (Id. ¶ 1.) Bogdasarov also agreed that he would not make or retain any copies of Plaza's proprietary information without permission, and would return such information to Plaza at the conclusion of his employment. (Id. ¶¶ 2-3.) The NDA provided that it would be governed by New York law. (Id. ¶ 5.)

Since his resignation from Plaza in June 2021, Bogdasarov has continued working as an automobile broker. (Rosatti Decl. ¶ 20.) On October 6, 2021, Bogdasarov sent an email from the address “plazahondaandronbogdasarov@gmail.com” to Plaza customer Matthew Lacks regarding a 2019 Honda Odyssey “that you are currently leasing from us.” (ECF No. 7 (“Lacks Decl.”) ¶ 7; ECF No. 7-1 (“Email Exchange”) at 2.) Lacks had leased a Honda Odyssey from Plaza Honda in 2019 and regularly brought his vehicle to Plaza for maintenance. (Lacks Decl. ¶¶ 2, 4.) Before receiving

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the October 6, 2021 email, however, Lacks had never met or communicated with Bogdasarov. (Id. ¶¶ 5-6.)

Based on the email address and the reference to the Honda Odyssey that Lacks was “currently leasing from us, ” Lacks believed that Bogdasarov was employed by Plaza and was soliciting Lacks to lease a new vehicle from Plaza. (Id. ¶ 7.) In his October 6, 2021 email, Bogdasarov identified the monthly payments and maturity date for Lacks's lease; wrote that “we would like to take you out of your current lease right now”; requested the mileage on Lacks's vehicle “so that we can customize and tailor a new lease for you today”; and offered to “pick [Lacks's vehicle] up from your place of choice and make your remaining payments.” (Email Exchange at 2.) In subsequent emails from October 2021, Lacks provided his vehicle's mileage and VIN No. at Bogdasarov's request and Bogdasarov offered to “keep your payments the same” on a new lease “with no money out of pocket from you.” (Id. at 3-4.)

On October 26, 2021, Lacks informed Bogdasarov that he was bringing his vehicle to Plaza Honda for service the following day. (Id. at 4.) In response, Bogdasarov told Lacks to “see my manager Ornan, ” who worked as “the used car manager” in “the Toyota building.” (Id.) Bogdasarov wrote to Lacks that “Ornan” would “get your vehicle assessed then we can get your new odyssey ordered and then delivered.” (Id.) When Lacks arrived at Plaza Honda the

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following day, he showed the email exchange to a salesperson, who expressed surprise and informed Lacks that Bogdasarov was no longer employed by Plaza. (Lacks Decl. ¶¶ 10-11.)

Plaintiffs commenced this action on November 23, 2021, bringing federal claims for false designation of origin under the Lanham Act, 15 U.S.C. § 1125(a)(1), and misappropriation of trade secrets under the Defend Trade Secrets Act, 18 U.S.C. § 1836. (ECF No. 1 (“Compl.”) at 7-10.) Plaintiffs also assert claims under New York law for breach of contract, misappropriation, unfair competition, breach of fiduciary duty, breach of the duty of loyalty, and violation of the faithless servant doctrine. (Id. at 6-7, 10-14.) On November 23, 2021, Plaintiffs filed a motion for a temporary restraining order and a preliminary injunction. (ECF Nos. 4-5.)

The court issued an order to show cause the same day, directing Bogdasarov to respond to Plaintiffs' motion by November 29, 2021 at 2:00 PM and to appear for a hearing on November 30, 2021 at 10:00 AM. (ECF No. 12 at 1-3.) On November 24, 2021, Plaintiffs served Defendant via email and FedEx as directed by the order to show cause. (Id. at 2; ECF No. 13.) Defendant did not respond to Plaintiffs' motion and did not personally appear for the show cause hearing on November 30, 2021 as ordered.

Approximately thirty-five minutes after the show cause hearing was scheduled to begin, Todd Kremin, Esq., entered the

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courtroom and stated that he represented Defendant, having been retained on the evening of November 29, 2021. Mr. Kremin stated that he was late to the hearing due to traffic and offered no valid explanation for Defendant's failure to appear. The court directed Mr. Kremin to immediately file a notice of appearance in this case, but he did not do so until 11:44 PM on November 30, 2021.

At the hearing, Mr. Kremin argued that his client has never communicated with Mr. Lacks and does not use or have access to “plazahondaandronbogdasarov@gmail.com.” However, Mr. Kremin has not filed any papers on Defendant's behalf and offered no evidence at the show cause hearing to support his arguments. Thus, Defendant has failed to show cause why an injunction should not issue.

CONCLUSIONS OF LAW

“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.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Because the court concludes that all four factors weigh in favor of the plaintiffs, the motion for a preliminary injunction is GRANTED.

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A. Irreparable Harm

First, plaintiffs are likely to suffer irreparable harm in the absence of a preliminary injunction. “The loss of reputation and goodwill constitutes irreparable harm.” Really Good Stuff, LLC v. BAP Investors, L.C., 813 Fed.Appx. 39, 44 (2d Cir. 2020) (citing Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 404 (2d Cir. 2004)). “Furthermore, loss of business opportunities and relationships with clients who could produce an indeterminate amount of business over years to come are . . . hard to measure in dollars and are properly considered irreparable harm.” Ericmany Ltd. v. Agu, 2016 WL 8711361, at *3 (E.D.N.Y. June 3, 2016) (quotations and citation omitted); see also, e.g., Regeneron Pharms., Inc. v. U.S. Dep't of Health & Human Servs., 510 F.Supp.3d 29, 40 (S.D.N.Y. 2020) (“Courts have determined that a loss of existing business and a decline in the opportunity for new business may qualify as irreparable harm.”).

Here, Bogdasarov's impersonation of a Plaza employee and his use of Plaza's name and customer databases to solicit Plaza's customers threaten irreparable harm to Plaza's reputation, goodwill, and business as a whole. Plaza's databases include not only the names and contact information for all of its customers, but also contain detailed information about every car that those customers have ever purchased or leased from Plaza. (Rosatti Decl. ¶¶ 10, 17.) Using the information cultivated over decades to build

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and maintain Plaza's relationships with customers is critical to Plaza's business, particularly in an industry where individuals and families frequently shop at the same location over a period of years. (Id. ¶¶ 6-8.) By impersonating a Plaza employee and using Plaza's name and databases to solicit Plaza customers like Mr....