Gluco Perfect, LLC et al v. Perfect Gluco Products, Inc. et al

Filing 25

TEMPORARY RESTRAINING ORDER. Ordered by Judge Kiyo A. Matsumoto on 3/19/2014. (Keefe, Reed)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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GLUCO PERFECT, LLC, U.S. HEALTH &
HOME CARE, INC., and JOY MERNONE,
Individually and in her capacity as Executor of
the Estate of Kevin R. Mernone, and
derivatively on behalf of PERFECT CARE,
INC.,
Plaintiffs,
ORDER
14-CV-1678 (KAM) (RER)

-againstPERFECT GLUCO PRODUCTS, LLC, USHH
PRODUCTS, INC., FRANCINE FREIMAN,
WILLIAM J. GILLEN, ANDRE RAMNAUTH
and JOHN AND JANE DOES 1 THROUGH 10,
Defendants.
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TEMPORARY RESTRAINING ORDER
On March 13, 2014, plaintiffs Gluco Perfect, LLC, U.S. Health and Home Care,
Inc., and Joy Mernone, Individually and in her capacity as Executor of the Estate of Kevin
R. Mernone, and derivatively on behalf of Perfect Care, Inc. (collectively “plaintiffs”)
commenced this action by the filing of a complaint, an application for an Order to Show
Cause, affidavits of Joy Mernone and Michael J. Garibaldi, CPA, both sworn to on March
12, 2014, a certification of Stephen Heiser, Esq. as to why notice of the application for an
Order to Show Cause for Temporary Restraining Order was not provided to Defendants, and
a supporting Memorandum of Law in Support of Plaintiffs’ Motion for a Temporary
Restraining Order and Preliminary Injunction, and supporting exhibits. Because plaintiffs
had demonstrated a substantial likelihood of success on the merits, that they had suffered
immediate and irreparable injury, loss and damages before the defendants could be heard,
and sufficient reasons that notice to the defendants should not be required in light of the

plaintiffs’ injuries, losses and damages, and because plaintiffs made repeated and
unsuccessful efforts to gain access to the plaintiffs’ place of business, assets, books and
records, the court issued an Order to Show Cause at 4:30 p.m. on March 13, 2014, which,
inter alia, directed service on the defendants, a date by which defendants were to respond,
temporarily restrained specific conduct by the defendants, and ordered that plaintiffs be
granted immediate access to their place of business, assets, books and records.
Following two telephone conferences with the parties on Friday, March 14, at
approximately 4:30 p.m., and Sunday, March 16, at approximately 2:30 p.m., the court
received submissions on March 17, 2014 from (1) defendants Perfect Gluco Products, LLC,
USHH Products, Inc., Francine Freiman, and William Gillen (collectively “Perfect Gluco
defendants”), including an affidavit of Francine Freiman with attached exhibits and a letter
memorandum; and (2) interested party Glenn Mernone, the 50% owner of plaintiff Perfect
Care, Inc., in the form of a letter with attached correspondence from Mitchell Devack, Esq.,
who also purported to represent plaintiff Perfect Care, Inc. Because Mr. Devack could not
explain the factual circumstances and the legal authority for his appearance on behalf of the
already represented plaintiff Perfect Care, Inc. of which plaintiff Joy Mernone and
interested party Glenn Mernone are each 50% owners of the shares, the court recognizes
Mr. Devack as counsel only for interested party Glenn Mernone until such time as Mr.
Devack adequately establishes his authority to appear for Perfect Care, Inc.
On March 18, 2014, the court heard more than three hours of argument at the Order
to Show Cause hearing after counsel for the parties agreed to defer the preliminary
injunction hearing so that the parties could engage in expedited discovery. Michelle Rice,
Esq. and Stephen Heiser, Esq. appeared for plaintiffs, Joshua Siegel, Esq., appeared for the

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Perfect Gluco defendants, and Mitchell J. Devack, Esq. and Christine A. Chester, Esq.
appeared for interested party Glenn Mernone. Defendant Andre Ramnauth did not appear,
despite all defendants having received service of the papers and adequate notice of the
hearing.
Upon the court’s consideration of the submissions of the parties and the oral
arguments at the Order to Show Cause hearing, the court made findings on the record at the
conclusion of the March 18, 2014 hearing and issued a temporary restraining order at
approximately 6:05 p.m, as set forth in further detail below.
Upon the admissible evidence before the court, the court finds that plaintiffs have
established (and defendants have not provided sufficient admissible evidence to the
contrary):
(1) that plaintiffs have suffered and/or are in imminent danger of suffering continued
immediate and irreparable injury, loss, or damage in the absence of this order based on
plaintiffs’ showing of the defendants’ unauthorized use of the plaintiffs’ marks and names;
the diversion, misappropriation and taking of plantiffs’ assets, funds, inventory and accounts
receivables from plaintiffs’ customers and suppliers through the use of misleading and
inaccurate representations regarding the ownership and name changes of plaintiffs; the
unauthorized writing of checks and transferring of funds from and through plaintiffs’
accounts; the failure of Francine Freiman as a servant, operations manager and purported
vice-president of the plaintiffs to perform her responsibilities in a manner consistent with
her duties as a servant and/or fiduciary of the plaintiffs; all of which have caused injury, loss
and damage to plaintiffs’ business and has caused customer confusion and the loss and
threatened loss of plaintiffs’ customers, suppliers, goodwill, financial viability of the

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plaintiff entities, and interference with plaintiff Joy Mernone’s ability to have access to the
premises, assets, books and records of, and be involved in, the plaintiff businesses of which
she is the one hundred per cent or fifty per cent shareholder.
(2) that plaintiffs have demonstrated that there is a substantial likelihood of success
on the merits of:
(a) their 1st, 2nd, and 4th claims against all defendants for Trade Name
Infringement,

Trademark

Infringement,

Unfair

Competition

and

Misappropriation under the Lanham Act and New York common law,
(b) their 3rd claim against all defendants for use of plaintiffs’ names with
intent to deceive,
(c) their 5th and 6th claims for breach of fiduciary duty against Freiman and
faithless servant claim against defendants Freiman and Ramnauth, and
(d) their 7th and 8th claims for conversion against defendants Freiman and
Gillen.
(3)

given the parties’ request that they be given time to engage in expedited

discovery and that they be permitted to make supplemental submissions in advance of the
preliminary injunction hearing, the court further finds that good cause exists to extend this
order until and including April 10, 2014, on which date the parties shall appear for a
preliminary injunction hearing.
THEREFORE, UPON THE COURT’S FINDING that temporary relief is
necessary to prevent further immediate and irreparable harm to plaintiffs pending the
preliminary injunction hearing, IT IS ORDERED that defendants are restrained from:
(1) engaging in any business through, or conducting any transactions with, the
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plaintiff entities, except that defendant Ramnauth shall continue his payroll
and other duties for Perfect Care, Inc., under the supervision of Glenn
Mernone and Joy Mernone;
(2) engaging in any business, including any purchases or sales, with respect or
relating to any products originally procured by plaintiffs or produced by
plaintiffs' suppliers or vendors;
(3) representing by any means whatsoever, whether directly or indirectly, that
defendants, or any products or services offered by defendants, or any
activities undertaken by defendants, are in any way associated with or
related in any way with plaintiffs, or any products or services offered by
plaintiffs;
(4) representing by any means whatsoever, whether directly or indirectly, that
defendants manage, operate or participate in the management or operation
of the plaintiffs or any entities associated with plaintiffs;
(5) representing by any means whatsoever, whether directly or indirectly, that
defendants acquired or were given business(es) or products by Kevin
Mernone;
(6) representing by any means whatsoever, whether directly or indirectly, that
any of the plaintiff entities have changed their names or have otherwise
ceased operations, including by the forwarding of any telephone calls made
to the plaintiff entities to the personal telephone of defendant Freiman; and
defendant Freiman shall forthwith remove all forwarding of calls to
plaintiffs’ telephone numbers and cause the return all of plaintiffs’ phone

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numbers to the location of plaintiffs’ businesses;
(7) using the names or otherwise infringing upon the trade names or
trademarks of any of the plaintiff parties, including Gluco Perfect, U.S.
Health & Home Care and Perfect Care, or any other similar names or
marks;
(8) using the names Perfect Gluco or USHH, or any other similar names or
marks; however, defendants may seek a modification of such restraint upon
defendants’ provision to plaintiffs of records of Perfect Gluco and USHH’s
inventory and pending contracts and orders by March 27, 2014, and
plaintiffs shall respond by April 3, 2014;
(9) soliciting any clients of plaintiffs and soliciting any suppliers or vendors of
plaintiffs; however, defendants may seek modifications of such conditions
following discussions and the exchanges of documents between the parties;
(10) transferring any assets or business interests to or from plaintiffs;
(11) engaging in any transactions whatsoever in any bank or other financial
account(s) owned by or associated with Defendants Perfect Gluco or
USHH; however, defendants may seek modification of such restraint after
defendants provide to plaintiffs certain records of Perfect Gluco’s and
USHH’s inventory, financial records, sales and purchases, contracts and
accounts, and other records regarding the source of funds deposited and/or
withdrawn, by March 27, 2014 and any response by plaintiffs being made
by April 3, 2014; and
(12) engaging in any transactions whatsoever in any bank or other financial

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account(s) owned by or associated with Plaintiffs Gluco Perfect, U.S.
Health & Home Care, or Perfect Care; and it is further
ORDERED that defendants Freiman and Gillen are not restrained from accessing
their personal bank accounts, absent a sufficient showing by plaintiffs; and it is further
ORDERED that Mitchell J. Devack, Esq. provide legal and factual authority for
his stated intention to represent plaintiff Perfect Care, Inc. in this action, if he seeks to
appear for plaintiff Perfect Care, Inc.; and it is further
ORDERED that plaintiff Joy Mernone file a verified complaint if she seeks to
bring suit on behalf of Perfect Care, Inc. as a shareholder of that entity, the court having
found, during the March 18, 2014 hearing, that plaintiff has otherwise met the pleading
requirements of Federal Rule of Civil Procedure 23.1(b); and it is further
ORDERED that Plaintiffs shall give security no later than Friday, March 21,
2014 in the amount of $50,000, an amount that the court considers proper to pay the
costs and damages if Ms. Freiman is found to be wrongfully enjoined or restrained,
given her annual salary from Perfect Care in the amount of $117,000 (Freiman Aff. ¶
32), divided by 12 months, and multiplied by what the court expects will be a
maximum of approximately five months to conduct the preliminary injunction hearing
and a trial on the merits; and it is further
ORDERED that this Order is deemed to be served on all parties and
interested party Glenn Mernone via electronic filing on the ECF system on
March 19, 2014; and it is further
ORDERED that as requested by the parties, any further submissions in
opposition to the plaintiffs’ motion for preliminary injunction be served and filed on or

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before March 31, 2014, and any reply papers be served on or before April 7, 2014, all
via electronic filing on the ECF system, with two courtesy copies to be delivered to
chambers on the above dates; and it is further
ORDERED that the parties engage in expedited discovery under the
supervision of the Honorable Ramon E. Reyes, U.S.M.J., and in good faith discussions
to resolve the disputes between them; and it is further
ORDERED that the parties shall appear at a preliminary injunction hearing on
April 10, 2014 at 9:00 a.m., before Kiyo A. Matsumoto, United States District Judge,
in Courtroom N6G, United States Courthouse, 225 Cadman Plaza East, Brooklyn, New
York 11201.
Dated: Brooklyn, New York
March 19, 2014

/s/
Kiyo A. Matsumoto, U.S.D.J.

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