EDELSON v. CHEUNG

Filing 83

AMENDED OPINION fld. Signed by Judge Jose L. Linares on 9/10/15. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COUR
T
DISTRICT OF NEW JERSEY

LEONARD EDELSON,

Civil Action No. 13-5870 (JLL)

Plaintiff,
V.

AMENDED OPINION

STEPHEN CHEUNG,
Defendant.
LINARES, District Judge.
This matter comes before the Court on Leonard
Edelson’s (“Plaintiff”) application for a
preliminary injunction pursuant to Fed. R. Civ.
P. 65 and a writ of attachment pursuant to Fed.
R.
Civ, P. 64(a) and New Jersey Court Rule 4:60
-5(a). Plaintiff seeks a writ of attachment and
a
preliminary injunction against Defendant Step
hen Cheung (“Defendant”). The Court has
considered the papers submitted, as well as
the oral argument of the Parties heard on June
9,
2015. For the reasons that follow, Plaintiff’s
application for a writ of attachment and a
preliminary injunction is DENIED.

I. Factual Background
Plaintiff Leonard Edelson has owned Westch
ester Lace & Textiles, Inc. (“Westchester”),
located in North Bergen, New Jersey, since
1976. (P1. Br. at 3.) Westchester sells lace
to a
number of large undergarment manufactur
ers in the United States. (P1. Br. at 3.) Westches
ter’s
lace was manufactured in its North Bergen
factory until 2003, when it became econom
ically
unfeasible for production to continue in Nor
th Bergen. (P1. Br. at 3.) In 2004, Edelson
and
Cheung formed Eastchester Lace & Textiles
(“Eastchester”) with two additional partners,

Stephen Ma and C.K. Chiu, to manufa
cture lace in China. (P1. Br. at 3-4.) Eas
tchester, according
to Defendant, was known as Yishida in
China. (Def. Br. at I.) Plaintiff obtaine
d 50% ownership
interest in Eastchester, while Ma, Chi
u, and Cheung shared the remaining
50%, such that each
owned 16.6%. (P1. Br. at 4, Tr. at 9.)
The new manufacturing facility and its
main office were
located in Jiangmen, China. (P1. Br.
at 4.)
Ma, Chiu, and Cheung were tasked wit
h establishing the Chinese corporatio
n due to their
familiarity with business procedures
in China, while Edelson provided We
stchester’s name,
contacts, proprietary methods, copyrig
ht-protected lace designs, and his exp
ertise in the lace
manufacturing industry. (P1. Br.at
4.) Edelson also contributed capital to
establish Eastchester,
including 34 machines, parts, and equ
ipment, as well as over 133,000 pounds
of yarn. (P1. Br. at
4.) Additionally, Edelson paid Matthe
w Ranieri, a consultant, over $250,00
0 to move to China to
set up the Eastchester facility and hire
and teach employees to use the mac
hinery. (P1. Br. at 4.)
Defendant and his sister-in-law, Lis
o Lee, managed Eastchester. They also
own Frontier, a
related company that managed Eastche
ster billing. (P1. Br. at 5.)
In 2005, Defendant sent a letter to Pla
intiff, Ma, and Chiu, indicating that
the Bank of
China was seeking repayment for
loans Eastehester had taken out, tota
ling approximately
$237,000. (P1. Br. at 5, Def. Br. at 2.)
As a result of Eastchester’s debt, the
Bank of China seized
several of Eastchester’ s machines,
which Defendant purchased back at
auction with personal
funds, (Tr. at 38.) Defendant offered
to handle Eastchester’ s financial issu
es in exchange for
acquiring full ownership of the com
pany. (P1. Br. at 5.) Plaintiff, Ma, and
Chiu each signed a
contract (“2005 Conveyance Agreem
ent”) agreeing to convey their inte
rests in Eastchester to
Cheung. (P1. Br. at 6.) Cheung then
transferred 10% of his interest in Eas
tchester to his son
Marcus, allegedly in order to com
ply with a Chinese law. (P1. Br. at
7, Def. Br. at 2, Tr. at 30.)

2

In 2006, Plaintiff and Defendant
created a one-paragraph document
that pur

ported to
allow Plaintiff to exercise an opt
ion for 50% interest in Eastchester
(“2006 Option Agreement”).
(P1. Br. at 6.) Plaintiff alleges tha
t Defendant drafted the 2006 Op
tion Agreement, while
Defendant alleges it was drafte
d by Plaintiff. (P1. Br. at 6, Tr. at
35.) The 2006 Option
Agreement, dated September 14,
2006 and signed by Defendant and
witnessed by a notary
public, indicated that:
Leonard Edelson has transferred
machinery and yarn and
consultant services in excess of
$600,000 to Eastchester Lace of
Jiangmen, China. In as much as
[Defendant] will own 100% of
the
shares after the company is reorga
nized, [Defendant] agree[s] to
give 50% interest in that compan
y or a successor company to
Leonard Edelson at a date specif
ied by him. He may exercise thi
s
option at any time.
(P1. Br. at 6, Ex. 9).
Plaintiff alleges that from 2006
through mid-2013, Defendant and
Lee managed
Eastchester and took profits and
salaries therefrom. (P1. Br. at 7.)
Defendant alleges that, while
he owned Eastchester, he did not
make any profits and he invested
more than $200,000 in
operating Eastchester. (Def. Br.
at 4.) Plaintiff further alleges tha
t Defendant, though he
continued to work from 2010 thr
ough 2013, claimed to be retired
and failed to report his income
from Eastchester and Frontier
during that period. (P1. Br. at 7,
n. 3.) Throughout this period,
Edelson continued to pay Ranie
ri for his consulting services and
to purchase lace from
Eastchester, allegedly providing
Eastchester with an average of
$1.6 million in annual revenue
between 2010 and 2012. (P1. Br.
at 8.)
In March 2009, Defendant pre
sented Plaintiff with a potent

ial investor. (P1. Br. at 8.)
After Plaintiff expressed con
cern, Defendant indicated to Pla
intiff that he was the only “partn
er”
at Eastchester. (P1. Br. at 8.) Pla
intiff alleges that Defendant beg
an negotiations to sell

3

Eastchester to Hang Chen in 2012 and
did not inform Plaintiff. (P1. Br. at
8.)
In April 2013, Defendant established
Eastchester Lace Corp. in New Yor
k (“Eastchester
NY”) to sell lace and textiles. (P1. Br.
at 8.) Defendant did not inform Plainti
ff he was opening
this new business. (P1. Br. at 8.) Pla
intiff alleges that Defendant hired a
Westchester employee,
Geremy Bernstein, to assist in openin
g Eastchester and competing with We
stchester. (P1. Br. at
9.) In June of 2013, Defendant forw
arded Plaintiff an email from Lee,
detailing financial
problems allegedly afflicting Eas
tchester, and asked for Plaintiffs opi
nion. (P1. Br. at 9.)
Plaintiff provides several emails ind
icating his requests to meet with Def
endant regarding these
financial problems and the sale of Eas
tchester. (P1. Br. at 9.) These reques
ts to meet were all
rebuffed. (P1. Br. at 9.)
Plaintiff alleges that Defendant sold
Eastchester on June 3, 2013 without
informing
Plaintiff or allowing him to exercis
e the 2006 Option Agreement. (P1. Br.
at 9.) Defendant
indicates that he sold Eastchester to
Chen for $100,000. (Def. Br. at 4.)
Plaintiff also alleges that
Defendant sent him several emails
after June 3 requesting advice regard
ing the potential sale of
Eastchester, though the sale had alre
ady taken place. (P1. Br. at 10.) Wh
ile Plaintiff and
Defendant discussed the potential for
sale, Plaintiff requested that Defend
ant ensure that Plaintiff
receive compensation for his contrib
utions if Eastchester were sold. (P1.
Br. at 11.) Plaintiff
asserts that he tried to enforce the
2006 Option Contract at the end of
July. (P1. Br. at 11.)
Plaintiff further alleges that Defend
ant sought to sabotage Westchester
in a number of
ways, including cutting off his sup
ply of lace from Eastchester, acquiri
ng Westchester’s
customers, hiring Bernstein, advisin
g the new owner of Eastchester not
to do business with
Westchester, copying Westcheste
r’s lace patterns, selling necessary
machinery, and refusing to
take orders from Westchester. (P1.
Br. at 12-13.) Plaintiff also alleges
that Defendant advised that

4

Eastchester would no longer do busines
s with Westchester and told Chen
to notify Westchester’s
customers about the end of their rela
tionship. (P1. Br. at 14.) According
to Plaintiff, Chen sent
emails to four of Westchester’s cus
tomers informing them that they sho
uld direct orders to
Eastchester and that they would no
longer accept orders through Westch
ester. (P1. Br. at 15.)
Plaintiff alleges that Defendant is in
the process of liquidating his assets
and removing
money to China (P1. Br. at 17.) Def
endant asserts that he recently sold
a property he owns and
transferred funds to his father-in-la
w in Hong Kong to repay a debt.
(Def. Br. at 1.)
II. Procedural History
Plaintiff filed this lawsuit on Octobe
r 2, 2013, alleging breach of con
tract and breach of
the implied covenant of good fait
h and fair dealing. (Compl. 4-5.) The
parties exchanged written
discovery requests and served resp
onses to the discovery requests on
May 14, 2014. (ECF No.
15). On May 16, 2014, Magistrate
Judge Dickson entered an Order refe
rring this case to
mediation and appointed Harold
I. Braff to serve as the mediator. (EC
F No. 17). The parties
engaged in mediation sessions wit
h Braff on June 27, 2014 and Januar
y 13, 2015, which were
both ineffective in reaching a reso
lution. (ECF Nos. 19, 25).
On March 12, 2015, Plaintiff moved
to amend his complaint to allege
two additional
causes of action: fraud and unjust
enrichment. (ECF No. 30). On Apr
il 2, 2015, Magistrate Judge
Dickson granted the motion. (EC
F No. 41). Defendant was given
an extension to answer the
Amended Complaint from April
16, 2015 until May 4, 2015. (ECF
No. 45). On April 29, 2015,
Defendant’s counsel moved for
leave to withdraw as counsel and
requested an addition extension
to answer the Amended Complai
nt. (ECF No. 43.) Magistrate Jud
ge Dickson extended
Defendant’s time to answer to Ma
y 11, 2015 (ECF No. 49.) On Ma
y 1, 2015, Magistrate Judge
Dickson granted Plaintiffs counse
l leave to file for prejudgment atta
chment. (ECF No. 49.) On

5

May 5, 2015, Magistrate Judge Dickson
entered an order granting Defendant’s cou
nsel’s motion
to withdraw. (ECF No. 49.) On May 6,
2015, Plaintiff moved for a preliminary
injunction and/or
a writ of attachment preventing Defend
ant from moving his assets overseas bas
ed on the
allegation that Defendant was “liquid
ating his assets and removing money
to China,” making
Defendant judgment-proof. (ECF No.
53, P1. Br. at 17.)
Ill. Legal Standard
A. Writ of Attachment
Fed. R. Civ. P. 64(a) provides that “ev
ery remedy is available that, under the
law of the
state where the court is located, provid
es for seizing a person or property
to secure satisfaction of
the potential judgment.” For a court
to issue a writ of attachment pursuant
to New Jersey Court
Rule 4:60-5(a), a plaintiff must show
that (1) there is a probability that fina
l judgment will be
rendered in favor of the plaintiff, (2)
there are statutory grounds for the issu
ance of the writ, and
(3) there is real or personal property
of the defendant at a specific location
within this State
which is subject to attachment.
With respect to the first prong, a fina
l judgment in favor of the plaintiff
is “probable if it
can reasonably and fairly convincing
ly be accepted as true, factual, or pos
sible without being
undeniably so.” Sentry Ins. V. Sky
Mgmt., Inc., 34 F. Supp. 2d 900, 905
(D.N.J 1999). This
means that a plaintiff seeking a wri
t of attachment must demonstrate a
prima facie case against
the defendant. Tanner Assoc., Inc
. v. Ciraldo, 33 N.J. 51, 62 (1960).
NJ.S,A § 2A:26-2(a) provides stat
utory grounds for attachment “where
the facts would
entitle plaintiff to an order of arrest
before judgment in a civil action,”
a procedure known as
capias ad respondendum. N.J.S.A
. § 2A:15-41, 2A:15-42. A capias
ad respondendum can issue
in an action founded in contract or
in tort. In a tort action, 2A:15-41
provides that:
§

6

[a) capias ad respondendum sha
ll issue.. only when the action
is
founded upon (a) an outrageou
s battery or mayhem, (b) a cla
im of
damages for the misconduct or
neglect of a public officer, or
(c) a
willful or malicious act and the
defendant is a nonresident or
is
about to remove from the state.
.

In a contract action, whether the
contract is express or implied,

§ 2A: 15-42 provides that:

A capias ad respondendum sha
ll issue. only when the pro
of
establishes. (a) that defend
ant is about to remove any of
his
property out of the jurisdiction
of the court in which the action
is
about to be commenced or is the
n pending with intent to defrau
d
his creditors, or (b) that defend
ant has property or choses in
action
which he fraudulently conceals,
(c) that defendant has assigned,
removed, disposed of, or is
about to assign, remove, or dis
pose of
any of his property with intent
to defraud his creditors, or (d)
that
defendant fraudulently contra
cted the debt or incurred the
demand.
To satisfy the third prong, a pla
intiff must show that the Defen
dant has real property that
the Court can reach and attach.
.

.

.

.

B. Preliminary Injunction
Although the Court typically
applies state law in diversity
actions, the Court utilizes a
federal standard in examining
requests to federal courts for
preliminary injunctions. Instan
t Air
Freight, Co. v. C.F. Air Freigh
t, Inc., 882 F.2d 797, 799 (3d
Cir. 1989). A preliminary inj
unction
is a “drastic and extraordinary
remedy that is not to be routin
ely granted.” Intel Corp. v.
ULSI
Sys. Tech., Inc., 995 F.2d 1566,
1568 (Fed. Cir.1993). Whether
to issue a preliminary injunctio
n
is within the trial court’s discre
tion. New Eng. Braiding Co
., v. A.W. Chesterton Co., 970
F.2d
878, 882 (Fed Cir. 1992). Th
e United States Court of Appea
ls for the Third Circuit has hel
d that
“a district court has the author
ity to grant injunctive relief in
an arbitrable dispute, provid
ed that
the traditional prerequisites for
such relief are satisfied.” Or
tho Pharm. Corp. v. Amgen,
Inc.,
882 F.2d 806. 812 (3d Cir.19
89). The court identified tho
se “traditional prerequisites”
as
follows: (1) whether the mo
vant has demonstrated reason
able probability of eventual suc
cess in
7

the litigation; (2) the probability of
irreparable har

m to movant if immediate relief
is not granted;

(3) the potential harm to the non-m
oving party; and (4) the public int
erest. 4 at 8 12-13. $çç
also Allegheny Energy, Inc. v.
DOUE, Inc., 171 F.3d 153, 158 (3d
Cir. 1999). A plaintiff must
establish more than a risk of irre
parable injury. He must demonstra
te “a clear showing of
immediate irreparable injury.” Ho
xworth v. Blinder, Robinson & Co
., 903 F.2d 186, 205 (3d
Cir. 1990) (quoting ECRI v. McGr
aw-Hill, Inc., 809 F.2d 223, 225
(3d Cir. 1987)). The Third
Circuit has placed particular we
ight on the probability of irrepar
able harm and the likelihood of
success on the merits, stating tha
t “we cannot sustain a prelimina
ry injunction ordered by the
district court where either or bot
h of these prerequisites are abs
ent.”
at 197 (quoting c
Arthur Treacher’s Franchisee Lit
ig., 689 F.2d 1137, 1143 (3d Cir
.1982));
also Instant Air
Freight Co. v. C.F. Air Freigh
t, Inc., 882 F.2d 797, 800 (3d Cir
. 1989); Morton v. Beyc, 822
F.2d 364, 367 (3d Cir. 1987); Fre
ixenet, S.A. v. Admiral Wine
& Liquor Co., 731 F.2d 148, 151
(3d Cir. 1984).

IV. Discussion
A. Plaintiff is not entitled to a wr
it of attachment on Defendant’s
property in New Jersey
based on any of his claims.
Plaintiff asserts that his request
for a writ of attachment satisfies
the three prongs required
by New Jersey Court Rule 4:60-5
(a). He argues that there is a pro
bability that final judgment on
his breach of contract, breach
of duty of good faith and fair dea
ling, fraud, and unjust enrichme
nt
claims will be rendered in his
favor. To satisfy the second pro
ng, Plaintiff asserts that New
Jersey’s capias ad respondendum
statutes provide grounds for the
issuance of a writ. Finally, he
argues that Defendant has proper
ty in New Jersey that can be atta
ched.
Plaintiff has not shown there is
a probability that final judgment
8

will be rendered in his

favor with respect to any of
his claims. In order to show
there is a probability that fin
al judgment
will be rendered in Plaintif
fs favor, he must state aprim
afacie case on one or more
of his
claims.
1, Breach of Contract
To state a prima facie claim
for breach of contract, Plain
tiff must show that (1) a con
tract
existed, (2) Defendant breach
ed that contract, (3) the bre
ach caused damage to Plaint
iff, and (4)
Plaintiff performed his own
contractual obligations. Fre
derico v. Home Depot, 507
F.3d 188, 203
(3d. Cir. 2007). In order to
establish that a contract existe
d, Plaintiff must prove the bas
ic
elements of a contract: (1) off
er, (2) acceptance, and (3)
consideration. Boro Constr.,
Inc. v.
Lenape Reg’l High Sch. Bd
. Of Educ,, 2010 U.S. Dist.
LEXIS 135822, 15 (D.N.J. 201
0).
Additionally, the contract
must be “sufficiently defini
te that the performance to be
rendered by
each party can be ascertained
with reasonable certainty.”
Schulz v. United States Boxin
g Ass’n,
105 F.3d 127 (3d. Cir. 1997).
Though Plaintiff baldly ass
erts that “there is no questio
n that Edelson and Cheung
entered into a valid contract,”
this Court disagrees. (P1. Br.
at 22). Plaintiff alleges that
Defendant
breached the 2006 Option
Agreement, but fails to sho
w that a contract existed. Th
ough it appears
from the one-paragraph agr
eement that there was offer
and acceptance, whether the
re was
consideration is in dispute.
A contract is unenforceable
without consideration. Bla
ir v. Scott
Specialty Gases, 283 F.3d
595, 604. (3d. Cir. 2002). Th
e 2006 Option Agreement
states that
Plaintiff “has transferred ma
chinery and yarn and consul
tant services in excess of
$600,000 to
Eastchester” prior to the pro
mise. It is well-established
that “past consideration, as
opposed to
true consideration. cannot
form the basis for a binding
contract.” J.C. Trading Lim
ited v. Wa!
Mart Stores, Inc., 947 F.
Supp. 2d 449, 456 (D. Del.
2013) (citing Continental Ins
. Co. v.
. .

9

Rutledge & Co., 750 A.2d
1219, 1232 (Del. Cli. 2000))
. According to the Restatem
ent (Second)
of Contracts, § 86 Commen
t a, “past consideration is inc
onsistent with the meaning
of
consideration.” See also Sta
rr v. Katz, 1994 U.S. Dist.
LEXIS 14437 (D.N.J. 199
4); Van Brunt
yjcheeg, 799 F. Su
pp. 1467, 1471 (S.D.N.Y.
1992). Thus, it is not clear
that Edelson
and Cheung entered into
a valid contract.
Alternatively, Plaintiff ass
erts that at least one of the
following constitutes consid
eration:
(a) Plaintiffs transfer of his
ownership of Eastchester to
Defendant, (b) Plaintiffs co
ntinued
purchasing relationship wit
h Eastchester, and (c) Plain
tiffs continued payment
of Ranieri’s
consultant fee. For purposes
of the extraordinary remed
y sought, plaintiff has not
made a
sufficient showing of cons
ideration. Because past pro
mises cannot constitute cons
ideration, the
transfer of interest in the
2005 Conveyance Agreeme
nt may not constitute conside
ration for the
2006 Option Agreement.
Because it appears that Plain
tiff is unable to show there
was a valid contract at this
time,
he has failed to show there
is a probability that final jud
gment will be rendered in
his favor with
respect to his breach of co
ntract claim. Thus, he has
failed to satisfy the first req
uirement for
obtaining a writ of attachm
ent on this claim.

2. Breach of the implied co
venant of good

faith andfair dealing

The covenant of good faith
and fair dealing is implicit
in all contracts in New Jer
sey.
Pepe v. Riva Co., 85 F. Su
pp. 2d 349, 390 (D.N.J. 199
9). However, in the absen
ce of a valid
contract, there can be no
implied covenant of good
faith and fair dealing.
Since Plaintiff has
not adequately establishe
d that there was a valid con
tract, he has failed to sho
w that there is a
probability that final judgm
ent will be rendered in his
favor on this claim. There
fore, he has not
10

satisfied the first requirem
ent for obtainin

g a writ of attachment with
respect

implied covenant of good
faith and fair dealing claim.

to his breach of the

3. Unjust enrichment
Plaintiff asserts that Defen
dant received a benefit and de
prived Edelson of valuable
equity, property, services,
and money without providing
Edelson his share of Eastc
hester. (P1.
Br. at 24.) To show that De
fendant was unjustly enric
hed, Plaintiff must prove tha
t Defendant
received some benefit, and
that retaining that benefit wo
uld be unjust. Iwanowa v.
Ford Motor
67 F. Supp. 2d 424, 471 (D
.N.J. 1999). Plaintiff has not
adequately shown that De
fendant
received any benefit and doe
s not rebut Defendant’s ass
ertion that he sustained signif
icant losses
in maintaining Eastcheste
r’s operations. Additionally,
it seems that Edelson was
not entitled to
any share of Eastchester aft
er the 2005 Conveyance Ag
reement. Though the 2006
Option
Agreement purports to allow
Edelson to obtain 50% of Ea
stchester upon exercise of
the option,
Plaintiff has not adequatel
y shown that the 2006 Optio
n Agreement was a valid
contract.
4. Fraud

To state a claim for fraud
under New Jersey law, Plain
tiff must allege (1) a mater
ial
misrepresentation of fact,
(2) knowledge or belief by
the defendant of its falsity,
(3) intention
that the other person rely on
it, (4) reasonable reliance
thereon by the other perso
n, and (5)
resulting damage. Gennari
v. Weichert Co. Realtors,
148 N.J. 582, 610 (1997).
Under Fed. R.
Civ. P. 9(b), a party alleg
ing fraud “must state with
particularity the circums
tances constituting
fraud or mistake.”
With respect to the 2005
Conveyance Agreement, Pl
aintiff suggests that De

fendant

11

materially misrepresented Eastc

hester’s financial situation. (P1
. Br. at 6.) Plaintiff also sugges
ts
that Defendant represented to him
that the business relationship
between Eastchester and
Westchester would not change
, and that this was false. (P1.
Br. at 6.) However, Plaintiff
has
provided no evidence that De
fendant misrepresented Eastc
hester’s financial situation. Pla
intiff
has also failed to provide any
evidence indicating that, at the
time the 2005 Conveyance
Agreement was signed, Defen
dant represented to him that
the business relationship betwe
en
Eastchester and Westchester
would not change.
With respect to the 2006 Optio
n Agreement, Plaintiff conten
ds that Defendant made a
matenal misrepresentation to
Plaintiff in asserting that he
owned 100% of Eastchester,
when he
owned 90% and his son owned
10%. (P1. Br. at 7). Though it app
ears that Defendant’s assertion
that he owned 100% of Eastc
hester was a misrepresentation,
there is no evidence that it wa
s
material or that Plaintiff relied
upon it. Whether Defendant
owned 100% or 90% of Eastc
hester,
he would still be able to convey
50% of Eastchester to Plaint
iff.
Plaintiff also alleges that De
fendant was dishonest about
Eastchester’s financial situatio
n
in June of 2013. (P1. Br. at 9).
However, Plaintiff has failed
to show that Defendant’s des
cription
of Eastchester’s finances wa
s a misrepresentation. Plaintiff
makes a conclusory statement
.
Plaintiff asserts that “Cheung
forwarded an e-mail to Edels
on that presented a false pic
ture of
Eastchester Lace’s financial
condition” without providing
any factual basis for concludin
g that
his representation of Eastches
ter’s financial condition wa
s false. (P1. Br. at 9). Further,
there is no
evidence that Cheung intended
for Edelson to rely on this inf
ormation; he merely asked
for
Edelson’s opinion regarding
Eastchester’s financial situatio
n. (P1. Br. at 9, Ex. 13). Pla
intiff
asserts that “Cheung intended
to deceive Edelson.. .so as
to discourage Edelson from
exercising
his option for 50%” of Easte
hester, but again provides no
factual basis for this conclusio
n. (P1.

12

Br. at 9).
Plaintiff further alleges tha
t Defendant made a mater
ial misrepresentation wi
th respect to
the timing of the sale of
Eastchester, and that Plain
tiff relied on this misrepre
sentation in
choosing not to exercise
his option for 50% of the
company. (P1. Br. at 9).
If the 2005
Conveyance Agreement
is enforceable, Plaintiff
no longer had any interest
in Eastchester prior to
its sale, and Plaintiff has
not produced sufficient ev
idence to show that the
2005 Conveyance
Agreement is unenforceab
le. Plaintiff has also not
sufficiently shown that the
2006 Option
Agreement constitutes a
contract, so even if Defen
dant had told Plaintiff
about the sale before it
occurred, there is no evide
nce that Plaintiff could
have exercised his alleged
right to 50% of
Eastehester. Therefore, the
alleged misrepresentation
seems immaterial and does
not justify the
extraordinary remedy so
ught. Since Plaintiff has
not provided facts supp
orting allegations of a
material misrepresentation
of fact, this Court finds tha
t he has failed to adequa
tely state a prima
jacie fraud claim.
Because Plaintiff has fai
led to state aprimafacie
case for any of his claim
s, he has failed
to satisfy the tirst prong
required for a writ of att
achment. Thus, this Co
urt declines to issue a
writ of attachment.
B. Plaintiff is not entitled
to a preliminary injuncti
on
Under Hoxworth, a prelim
inary injunction
demonstrates both a reaso
nable probability of
probability of Plaintiff

based on any of his cla
ims.

cannot be granted unless
Plaintiff

eventual success in the lit
igation and the

suffering irreparable harm

. Plaintiff argues that he
will suffer irreparable

harm if a preliminary inj
unction

is not granted, based on
allegations that Defenda
nt has begun
moving his assets to Ch
ina and will therefore be
judgment proof. Howeve
r, Plaintiff has failed to
demonstrate a reasonable
probability of eventual su
ccess in the litigation for
the reasons
13

described above with res
pect to the writ of attachm
ent. Because Plaintiff ha
s failed to state a
prima jàcie case for an
y of his claims, he has fai
led to satisfy an element
necessary for granting
a
preliminary injunction.
As a result, this Court de
clines to issue a prelim
inary injunction.
V.
CONCLUSION
Therefore, having deter
mined that

Plaintiff has not demons
trated a likelihood of su
ccess
on his breach of contrac
t, breach of the covena
nt of good faith and fai
r dealing, unjust
enrichment, and fraud cla
ims, the Court denies Pl
aintiffs request for the
issue of a writ of
attachment and a prelim
inary injunction.
An appropriate Order fol
low

s this Opinion.

DATED:

ofSepternber,2O5.

JoL LtNARS
u.S. DISTRICT JUDG

E

14