Cornerstone Staffing Solutions, Inc. v. James et al

Filing 24

STIPULATION AND ORDER RE 23 FOR PRELIMINARY INJUNCTION. Signed by Judge Richard Seeborg on 4/23/12. (cl, COURT STAFF) (Filed on 4/23/2012)

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Paul Marron, Esq., State Bar No. 128245
Steven C. Rice, Esq., State Bar No. 109659
Mark J. Polland, Esq., State Bar No. 210657
MARRON LAWYERS
320 Golden Shore, Suite 410
Long Beach, CA 90802
Tel.: [phone]
Fax: [phone]
E-mail: [e-mail]
E-mail: [e-mail]
E-mail: [e-mail]
Attorneys for Defendants LARRY THAXTER
JAMES an individual; DEPLOYHR, INC.,
a California corporation

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IN THE UNITED STATES DISCTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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SAN FRANCISCO DIVISION

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CORNERSTONE STAFFING SOLUTIONS, INC.,
a California Corporation,

Assigned to Hon. Richard Seeborg

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Plaintiff,
STIPLUATION AND [PROPOSED]
ORDER FOR PRELIMINARY
INJUNCTION

vs.

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Case No.: 3:12-cv-01527-RS

LARRY THAXTER JAMES an individual; DAVID
R. BATTON, an individual; TED MANNELLO, an
individual; ANDRE DOUZDJIAN, an individual;
MICHAEL SANTOS, an individual; MARCOS
BARRERA, an individual; BATTON TECHNICAL
ENGINEERING CONSULTANTS, INC., a
Michigan Corporation; BATTON DIVERSIFIED
STAFFING SOLUTIONS, a Michigan Corporation;
HANBONCARO I, LLC, a Michigan Limited
Liability Company a/k/a CARO I, LLC; HANBON - MI I, LLC, a Michigan Limited Liability Company
d/b/a TECHNICAL ENGINEERING
CONSULTANTS; HANBON - MI II, INC., a
Michigan Corporation d/b/a BATTON
TECHNICAL ENGINEERING CONSULT-ANTS;
HANBON -- MARLETTE, LLC, a Michigan
Limited Liability Company; HANBON -- PA I, LLC
a Pennsylvania Limited Liability Company;
HANBON - CT I, LLC a Connecticut Limited
Liability Company; TEC GROUP INC., a Michigan
Corporation d/b/a TEC GROUP ALSO d/b/a TEC-

Hearing
Date: April 23, 2012
Time: 10:00 a.m.
Courtroom: 3
Location: 17th Floor, Phillip Burton
Federal Building & United States
Courthouse, 150 Golden Gate Avenue,
San Francisco 94102
Complaint Filed: March 27, 2012

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Case #3:12-cv-01527-RS
[PROPOSED] ORDER FOR PRELIMINARY INJUNCTION
022993/2012-1070

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CHRYSLER; DEPLOY HR, INC., a Pennsylvania
Corpor-ation d/b/a DEPLOY HR STAFFING, INC.;
DEPLOYHR, INC., a California Corporation d/b/a
TEC ALSO d/b/a BATTON; and DOES 1- 100,
Defendants.

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STIPULATION

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A.

above entitled action on March 27, 2012;

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WHEREAS Plaintiff CornerStone Staffing Solutions Inc. (“CornerStone”) filed the

B.

WHEREAS CornerStone obtained a Temporary Restraining Order on April 9,

C.

WHEREAS CornerStone filed papers in support of a Preliminary Injunction on

2012;

April 13, 2012;
D.

WHEREAS Defendant Larry Thaxter James (“James”) filed a Response to the

Preliminary Injunction on April 19, 2012;
E.

WHEREAS James and the Defendant Entities (which include Batton Technical

Engineering Consultants, Inc; Batton Diversified Staffing Solutions Corp., Hanbon Caro, I, LLC;
Hanbon Michigan I, LLC, Hanbon MI II,INC., Hanbon-Marlette, LLC, Hanbon PA I LLC,
Hanbon CT I, LLC, TEC Group, Inc., DeployHR Staffing, Inc. and DeployHR, Inc. and
individuals associated with and employed by James and/or his companies) dispute that
CornerStone is entitled to a Preliminary Injunction, and specifically deny that there was any
computer tampering, theft of CornerStone property, efforts to interfere with CornerStone
employees, or efforts to transfer or solicit CornerStone customers, and assert that the evidence is
insufficient to support any of the relief sought by the Proposed Preliminary Injunction; however,
the parties mutually wish to avoid the inconvenience, expense, and uncertainty of further litigation
with respect to the preliminary injunction;
F.

WHEREAS the parties mutually wish to preserve the status quo as of April 9,

2012 and avoid destabilizing the operations of the respective entities and staffing companies that

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Case #3:12-cv-01527-RS
[PROPOSED] ORDER FOR PRELIMINARY INJUNCTION
022993/2012-1070

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are parties to this suit (in order to, among other things, maintain the status quo pending final
determination on the merits and in order to provide the entities with stable operations that will
discourage financial instability and predatory tactics from third party competitors that may solicit
the parties’ customers to transfer business away from CornerStone or the Defendants);
G.

WHEREAS this Stipulation and Proposed Order do not determine the respective

ownership rights of the parties with respect to the various entities that are parties to this suit, nor
adjudicate or resolve other claims or remedies such as constructive trust, damages, or claims for
unpaid annual profits and sales proceeds (all such claims and defenses being reserved by the
parties), but the parties do wish to utilize this and perhaps other stipulations and proposed orders
as a vehicle to work in good faith to clarify and define their relations pendente lite, with an aim
towards reducing issues that require court intervention;
IT IS STIPULATED TO AND AGREED AS FOLLOWS:
This Stipulation and Proposed Order is not intended to be, and shall not be construed as, an
admission of fact or liability for any purpose, and it shall have no effect on any subsequent
determination by the Court with respect to the merits of the claims of the parties.
This Stipulation and Proposed Order was drafted equally by CornerStone and James.
James and his agents, representatives, employees and all other persons acting in concert
with, at the direction of, on behalf of, or in combination with James and the Defendant Entities are
hereby enjoined and restrained from:
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Tampering with CornerStone’s computer systems, removing physical property

from any premises occupied or leased by CornerStone, or seeking to dissuade CornerStone
employees from reporting to work, subject to the following exceptions:
(a) CornerStone leases certain real property from Hanbon Caro I, LLC in Caro,

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Michigan, and such lease shall remain in force as in effect on April 9, 2012. For

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purposes of clarity, nothing herein shall prohibit Hanbon Caro I, LLC or its

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employees or representatives from communicating with CornerStone personnel

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regarding issues relating to such lease.

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Case #3:12-cv-01527-RS
[PROPOSED] ORDER FOR PRELIMINARY INJUNCTION
022993/2012-1070

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(b) The Connecticut operation, ownership of which is claimed by both CornerStone

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and Hanbon CT, will continue to be operated consistent with past practice as a

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branch of CornerStone for all funding and accounting purposes under the day to

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day operation of Ted Mannello. For purposes of clarity, nothing herein shall

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prohibit James from communicating with Ted Mannello, but James shall not have

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any authority to direct or manage any aspect of the Connecticut operation.

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(c) Except as provided in paragraph 1 b) above, the parties further stipulate and agree

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that the status quo as of April 9, 2012 with James and his respective co-principals

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in the Defendant Entities exercising executive, managerial and operational control

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over the Defendant Entities shall continue.

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(d) There is currently personal property belonging to James on CornerStone’s

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premises. James will not remove those items without the consent of CornerStone,

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however, removal of such items with CornerStone’s consent will not constitute a

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violation of this order. If there are any such items that are in dispute as to

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ownership, the parties will work in good faith to try to resolve those issues. If the

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parties cannot resolve those issues on their own, the court will make the final

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determination.
2.

James and his agents, representatives, employees and all other persons acting in

concert with, at the direction of, on behalf of, or in combination with James and the Defendant
Entities shall not seek to (i) solicit (i.e., initiate contact with) any employees of CornesStone to
terminate their employment with CornerStone, or (ii) transfer CornerStone’s existing customers or
solicit the work of any CornerStone customer; provided, however, James and the Defendant

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Entities may continue to serve their existing customers as of March 23,, 2012. As used herein, the

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term “CornerStone customer” means any customer identified as such on CornerStone’s gross

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margin reports at any time during the 180 day period preceding March 23, 2012, but excluding
any existing customer of James and the Defendant entities as of March 23, 2012. In order to
facilitate communication between the parties on this issue, CornerStone shall on or prior to April

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[PROPOSED] ORDER FOR PRELIMINARY INJUNCTION
022993/2012-1070

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25, 2012 provide counsel for Defendants with a list of CornerStone customers (the “CornerStone

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Customer List”). The information in the CornerStone Customer List may be disclosed to James

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and the Defendant Entities; however, such list shall solely be used by James and the Defendant
Entities for the purpose of assisting to James and the Defendant Entities in identifying
CornerStone customers that may not be solicited or the subject of transfer efforts. The parties
shall meet and confer in good faith should there be disagreement regarding whether any particular
customer was a CornerStone customer or a customer of James or the Defendant Entities as of
March 23, 2012. It is also acknowledged between the parties that Defendants may actively solicit
the business of individuals and entities tha are not on the CornerStone Customer List.
Additionally, although the status of World Class Distribution, Inc. (“WCD”): as a customer of
CornerStone vs. a customer of Defendant DeployHR, Inc./Larry James is an issue in dispute in
this lawsuit, for purposes of this Proposed Stipulation and Order Thereon/injunction, WCD is
deemed to be a customer of Deploy/Larry James.
3.

James and the Defendant Entities are enjoined from disposing of any interest in any

of the Defendant Entities; however, James may investigate or respond to potential sales
opportunities for the Defendant Entities or CornerStone, so long as counsel for CornerStone is
informed. Issues short of final sale, such as preliminary discussions though draft sales documents,
letters of intent and the like are not prohibited by this Order. No sale may close without Court
consent or the agreement of the parties.
4. Nothing in this Stipulation and Proposed Order/Injunction shall prohibit any party from
seeking to modify the terms of the injunction upon motion and depending on the facts as they
develop. The preliminary injunction shall otherwise remain in effect until it is cancelled or
modified by application or order of the court, or until judgment is entered, whichever comes first.
CornerStone shall continue its $100,000 bond as security for the injunction, unless modified by
application or court order.
5. Subject to Court approval, the Order to Show Cause/Hearing on Preliminary Injunction
April
currently set for May 23, 2012 at 10 am need not proceed.

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Case #3:12-cv-01527-RS
[PROPOSED] ORDER FOR PRELIMINARY INJUNCTION
022993/2012-1070

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6.

The parties shall meet and confer in good faith before filing any additional

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motionsrelated to the subject matter of this Stipulation and Proposed Order/Injunction.

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IT IS SO STIPULATED.

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For CornerStone Staffing Solutions, Inc.:

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Date:

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Name:

Neil Martin, Esq.

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Signed:

/s/ Neil Martin

April 21, 2012

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For Larry James:

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Date:

April 21, 2012

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Name:

Paul Marron, Esq.

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Signed:

/s/ Paul Marron

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[PROPOSED] ORDER
PURSUANT TO THE FOREGOING STIPULATION, IT IS SO ORDERED.

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DATE: 4/23/12

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__________________________________________________
THE HONORABLE RICHARD SEEBORG
JUDGE OF THE NORTHERN DISTRICT OF CALIFORNIA

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Case #3:12-cv-01527-RS
[PROPOSED] ORDER FOR PRELIMINARY INJUNCTION
022993/2012-1070