Preview
FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023
NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
MORDECHAI KLIGER,
Index No. 505356/2023
Plaintiff,
Justice Reginald A. Boddie
v.
Motion Seq. No. 3
FAIRMONT INSURANCE BROKERS LLC,
formerly known as FAIRMONT INSURANCE
BROKERS, LTD.,
Defendant.
PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT’S
MOTION FOR A PRELIMINARY INJUNCTION
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TABLE OF CONTENTS
PRELIMINARY STATEMENT .................................................................................................... 1
FACTUAL BACKGROUND ......................................................................................................... 2
A. In February 2023, Kliger is Forced to Bring this Action Because Fairmont Refuses to
Honor its 2005 Agreement with Him.......................................................................................... 2
1. Under his Associate Producer Agreement with Fairmont, if Fairmont terminates
Kliger without cause, Kliger is entitled to maintain his book of business and to receive 40%
commission.............................................................................................................................. 2
2. After terminating Kliger without cause, Fairmont deprives Kliger of access to the
information necessary to maintain his book of business and takes other steps to deprive
Kliger of his rights under the Associate Producer Agreement ............................................... 3
3. Kliger commences this action and obtains a court order requiring Fairmont to restore
his access to the information necessary to maintain his book of business ............................. 4
4. Before the preliminary injunction hearing, Fairmont stipulates to provide Kliger
access to the necessary information pending the outcome of this lawsuit .............................. 4
B. Shortly After Entering the Stipulation, Fairmont Counter-Sues Alleging that Kliger Had
Breached His Duty of Loyalty, and Obtains a Draconian Temporary Restraining Order (“Ex
Parte TRO”) Barring Kliger From, Inter Alia, Speaking to His Clients ..................................... 5
C. Kliger Immediately Filed an Order to Show Cause to Vacate the Ex Parte TRO, Which Is
Still Pending Before this Court ................................................................................................... 5
D. The Appellate Division, Second Department Modifies the Ex Parte TRO Pursuant to a
Limited CPLR 5704 Review to Exclude Actions “Necessary for Kliger to Maintain Contact
with Insurance Clients Pursuant to the Associate Producer Agreement ..................................... 6
E. Continuing its Campaign to Destroy Kliger, Fairmont Issues Thirteen (13) Subpoenas on
Kliger’s Clients with the Apparent Purpose of Poisoning Kliger’s Client Relationships Under
the Guise of “Discovery” and then Stops Making Any Contractual Payments under the
Associate Producer Agreement ................................................................................................... 6
F. Ratcheting Up the Pressure on Kliger, Fairmont has Wrongfully Stopped Making
Payments to Him—Even According to Fairmont’s Interpretation of the Agreement—Without
Explanation or Justification ........................................................................................................ 7
ARGUMENT .................................................................................................................................. 7
I. PRELIMINARILY, FAIRMONT’S MOTION SHOULD BE DENIED BECAUSE IT
SEEKS TO ALTER THE STATUS QUO AND DETERMINE THE ULTIMATE RIGHTS
OF THE PARTIES BEFORE THIS ACTION HAS BEEN AJUDICATED ............................. 7
II. COURTS IMPOSE A HEAVY EVIDENTIARY BURDEN ON PARTIES SEEKING
THE DRASTIC REMEDY OF A PRELIMINARY INJUNCTION, AND FAIRMONT DOES
NOT MEET THAT BURDEN ................................................................................................... 8
A. Fairmont, Relying Entirely on Hearsay and Self-Interested Testimony, Does Not Meet
Its Burden to Demonstrate A Likelihood Of Success On The Merits .................................... 9
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B. Fairmont’s Motion Should Be Denied Because, at Best, The Facts are in Sharp Dispute
12
C. Fairmont is Unlikely to Succeed on the Merits of its Claims ....................................... 13
1. Breach of Contract/Stipulation ................................................................................. 13
2. Breach of the Implied Covenant of Good Faith and Fair Dealing ............................ 15
3. Tortious Interference ................................................................................................. 16
III. FAIRMONT’S MOTION SHOULD BE DENIED BECAUSE IT FAILS TO
ESTABLISH IRREPARABLE INJURY ................................................................................. 17
IV. FAIRMONT’S MOTION SHOULD BE DENIED BECAUSE IT FAILS TO
ESTABLISH THAT THE EQUITIES WEIGH IN ITS FAVOR ............................................ 18
V. IF THE COURT DOES GRANT AN INJUNCTION, IT SHOULD REQUIRE
FAIRMONT TO POST AN UNDERTAKING IN THE AMOUNT OF AT LEAST
$65,000,000.00, THE VALUE OF KLIGER’S BOOK OF BUSINESS.................................. 20
CONCLUSION ............................................................................................................................. 21
WORD COUNT CERTIFICATION ............................................................................................. 22
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TABLE OF AUTHORITIES
CASES
1234 Broadway LLC v. W. Side SRO Law Project, Goddard Riverside Community Ctr., 86
A.D.3d 18 (1st Dep’t 2011)
................................................................................................................................................... 13
BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999)
................................................................................................................................................... 18
Berkoski v. Bd. of Trustees of Inc. Vil. of Southampton, 67 A.D.3d 840 (2d Dep’t 2009)
................................................................................................................................................... 22
Berman v. TRG Waterfront Lender, LLC, 181 A.D.3d 783 (2d Dep’t 2020)
................................................................................................................................................... 12
Brownstone Agency Inc. v. Distinguished Programs Grp., 2008 N.Y. Misc. LEXIS 8992 (N.Y.
Co. 2008)
................................................................................................................................................... 13
Canstar v. J.A. Jones Constr. Co., 212 A.D.2d 452 (1st Dep’t 1995)
................................................................................................................................................... 19
Centi v. McGillin, 34 N.Y.3d 1072 (2019)
................................................................................................................................................... 23
Destiny USA Holdings, LLC v. Citigroup Glob. Mkts. Realty Corp., 69 A.D.3d 212 (4th Dep’t
2009)
................................................................................................................................................... 24
Di Stefano v. PSFB Associates, 103 A.D.2d 839 (2d Dep’t 1984)
................................................................................................................................................... 21
DiFabio v. Omnipoint Communications, Inc., 66 A.D.3d 635 (2d Dep’t 2009)
............................................................................................................................................. 21, 22
Englehard Corp. v. Research Corp., 268 A.D.2d 358 (1st Dep’t 2000)
................................................................................................................................................... 19
Fasolino Foods Co. v. Banca Nazionale Del Lavoro, 961 F.2d 1052 (2d Cir. 1992)
................................................................................................................................................... 19
Fischer v. Deitsch, 168 A.D.2d 599 (2d Dep’t 1990)
................................................................................................................................................... 22
Harris v. Provident Life & Accident Ins. Co., 310 F.3d 73 (2d Cir. 2002)
................................................................................................................................................... 19
Holdsworth v. Doherty, 231 A.D.2d 930 (4th Dep’t 1996)
................................................................................................................................................... 13
John G. Ullman & Assoc., Inc. v. BCK Partners, Inc., 139 A.D.3d 1358 (4th Dep’t 2016)
................................................................................................................................................... 22
Lama Holding Co v. Smith Barney Inc., 88 N.Y.2d 413 (1996)
................................................................................................................................................... 17
M.H. Mandelbaum Orthotic & Prosthetic Servs., Inc. v. Werner, 126 A.D.3d 859 (2d Dep’t
2015)
................................................................................................................................................... 12
Mandelblatt v. Devon Stores, Inc., 132 A.D.2d 162 (1st Dep’t 1987)
................................................................................................................................................... 21
Margolies v. Encounter, Inc., 42 N.Y.2d 475 (1977)
................................................................................................................................................... 24
Matter of Related Props., Inc. v. Town Bd. of Town/Village of Harrison, 22 A.D.3d 587 (2d
Dep’t 2005)
................................................................................................................................................... 13
Merrill Lynch Realty Assoc., Inc. v Burr, 140 A.D.2d 589 (2d Dep’t 1988)
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................................................................................................................................................... 14
Mosseri v Fried, 289 A.D.2d 545 (2d Dep’t 2001)
............................................................................................................................................. 14, 16
Omakaze Sushi Rest., Inc. v. Ngan Kam Lee, 57 A.D.3d 497 (2d Dep’t 2008)
............................................................................................................................................. 12, 16
Radiology Assoc. of Poughkeepsie, PLLC v. Drocea, 87 A.D.3d 1121 (2d Dep’t 2011)
................................................................................................................................................... 12
Rosenberg Diamond Dev. Corp. v. Appel, 290 A.D.2d 239 (1st Dep’t 2002)
................................................................................................................................................... 24
Rourke Developers Inc. v. Cottrell-Hajeck Inc., 285 A.D.2d 805 (3d Dep't 2001)
................................................................................................................................................... 24
Soundview Cinemas, Inc. v. AC I Soundview, LLC, 149 A.D.3d 1121 (2d Dep’t 2017)
............................................................................................................................................. 12, 13
SportsChannel America Associates v. National Hockey League, 186 A.D.2d 417 (1st Dep’t
1992)
................................................................................................................................................... 22
TeeVee Toons, Inc. v. Prudential Sec. Credit Corp., LLC, 8 A.D.3d 134 (1st Dep’t 2004)
................................................................................................................................................... 19
The Hawthorne Group, LLC v. RRE Ventures, 7 A.D.3d 320 (1st Dep’t 2004)
................................................................................................................................................... 19
TMP Worldwide Inc. v. Franzino, 269 A.D.2d 332 (1st Dep’t 2000)
................................................................................................................................................... 12
Vigoda v. DCA Prods. Plus Inc., 293 A.D.2d 265 (1st Dep’t 2002)
................................................................................................................................................... 21
Water Quality Ins. Syndicate v. Safe Harbor Pollution Ins., LLC, 2014 N.Y. Misc. LEXIS 33
(N.Y. Co. 2014)
................................................................................................................................................... 13
WebMD Health Corp. v. Martin, 2006 NYLJ LEXIS 4372 (N.Y. Co. Aug. 7, 2006)
................................................................................................................................................... 16
White Plains Coat & Apron Co., Inc v. Cintas Corp., 8 N.Y.3d 422 (2007)
................................................................................................................................................... 20
v
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Plaintiff Mordechai Kliger (“Kliger” or “Plaintiff”), through his undersigned counsel,
respectfully submits this Memorandum of Law in Opposition to Defendant Fairmont Insurance
Brokers LLC, f/k/a Fairmont Insurance Brokers, Ltd.’s (“Fairmont” or “Defendant”) motion,
brought by order to show cause, seeking a preliminary injunction (the “Motion”). (Mot. Seq. No.
3) (NYSCEF Nos. 34-44).
PRELIMINARY STATEMENT
This case, and the Motion, are about Fairmont’s determination to ruin Kliger’s career and
destroy his livelihood because Kliger had the chutzpah not to forgo his valuable contractual
rights just so the owners of Fairmont could make tens of millions of dollars for themselves from
the sale of the company to the detriment of Kliger. Infuriated by Kliger’s refusal to capitulate to
their unreasonable demands, the owners of Fairmont have continued to punish Kliger during the
pendency of this action by: (1) allowing clients that comprise Kliger’s “book of business”—to
which he is entitled to a 40% commission—to take their business elsewhere without Kliger’s
knowledge or input; (2) denying him access to client information necessary to earn a living; (3)
targeting Kliger’s clients with a barrage of subpoenas; and, most recently (4) stopping all
payments under the parties’ contract, even those payments to which Fairmont concedes Kliger is
entitled as part of a buyout.
As detailed herein, the Motion—which relies entirely on inadmissible hearsay—should
be denied because: (1) Fairmont is unlikely to succeed on the merits of its claims in this case,
with hotly disputed facts; (2) Fairmont will suffer no irreparable harm; and the (3) equities way
heavily in Kliger’s favor. In sum, Fairmont should not be allowed to use its financial leverage
over Kliger as a cudgel any longer while the parties litigate the merits of their respective claims.
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FACTUAL BACKGROUND
A. In February 2023, Kliger is Forced to Bring this Action Because Fairmont Refuses to
Honor its 2005 Agreement with Him
1. Under his Associate Producer Agreement with Fairmont, if Fairmont terminates Kliger
without cause, Kliger is entitled to maintain his book of business and to receive 40%
commission
This action concerns Kliger’s rights under his agreement with Fairmont, an insurance
brokerage agency. NYSCEF No. 1, Verified Complaint (“Compl”); NYSCEF No. 20, Verified
Amended Complaint (“Am. Compl.”).
Over eighteen (18) years ago, on or about February 18, 2005, Kliger, as “Associate
Producer,” entered into an Associate Producer Agreement (the “Agreement”) with Defendant, as
“Agency.”1 Among other things, the agreement provided that Kliger was an independent
contractor for Fairmont, and that that, inter alia, he was obligated to place his insurance clients
with Fairmont to procure insurance policies, and would receive 40% of Fairmont’s gross
commission for each such placement. NYSCEF No. 21, Associate Producer Agreement at §§ 2,
17. If Kliger was terminated without cause (which he ultimately was), the Agreement provided
that “[Kliger] can still maintain [his] book of business and receive 40% commission from
this book.” Id. at § 24 (emphasis added).
1 A copy of the Agreement is annexed to NYSCEF No. 20, the Verified Amended Complaint
(“Am. Compl.”), as Exhibit A (NYSCEF No. 21). It is separately annexed to the Kliger
Affirmation dated July 11, 2023 as Exhibit A. The Am. Compl. is annexed to the Seddio Affirm.
as Exhibit A.
2
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2. After terminating Kliger without cause, Fairmont deprives Kliger of access to the
information necessary to maintain his book of business and takes other steps to deprive
Kliger of his rights under the Associate Producer Agreement
In early January 2023, Kliger was advised that Fairmont intended to sell substantially all
of its assets to a third-party. Kliger Affirm. at ¶ 6. Shortly thereafter, Kliger was presented with a
series of draft agreements intended to delineate the terms of the proposed post-sale relationship
between the third-party and Kliger. Id. Kliger declined to enter into any of these draft agreements
because they required that he forgo valuable contractual and financial rights he contracted for at
arms lengths years earlier before he built his significant book of business. Id. Frustrated by
Kliger’s refusal to kowtow to Fairmont’s demand to walk away from the fruits of his book of
business that he had built over two decades, by letter to Kliger dated February 14, 2023 (the
“Termination Letter”), Fairmont’s President, Moishe Mishkowitz, advised that Fairmont was
terminating the Agreement without cause. NYSCEF No. 23, Termination Letter.2
Almost immediately after the termination, Fairmont began to systematically curtail
Kliger’s access to information critical to the servicing of his insurance clients and, by extension,
his entire book of business. NYSCEF No. 20, Am. Compl. at ¶ 28. For example, Kliger requires
full access to historical client-owned information stored on the Agency Management System
(AMS) maintained by Fairmont to properly service his insurance clients. Although Kliger was
initially still able to access basic information on the system, he had been denied access to more
detailed information (such as copies of prior insurance policies) that were previously accessible
to him and necessary to maintain his book of business. Id. at ¶ 29. Kliger made repeated requests
to Fairmont to restore to him full access to AMS but those requests went unanswered, thereby
2
A copy of the Termination Letter is also annexed to the Kliger Affirm. as Exhibit B.
3
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impeding Kliger’s ability to service his insurance clients and jeopardizing his relationships with
those clients. Id. at ¶¶ 29-30.
3. Kliger commences this action and obtains a court order requiring Fairmont to restore
his access to the information necessary to maintain his book of business
Kliger commenced this action on February 17, 2023. NYSCEF No. 1, Compl. On
February 21, 2023, through counsel, Kliger filed an order to show cause seeking a temporary
restraining order and a preliminary injunction barring Fairmont from depriving him of access to
information necessary for him to service his book of business. NYSCEF Nos. 4-14. On February
24, 2023, the Court issued an order that required Defendant to “restore Plaintiff’s full and
complete access to information relating to Plaintiff’s insurance clients stored electronically on
the Agency Management System (AMS) maintained by Defendant,” pending the hearing on
Kliger’s motion for a preliminary injunction. NYSCEF No. 15, Initial TRO at 2.
4. Before the preliminary injunction hearing, Fairmont stipulates to provide Kliger access
to the necessary information pending the outcome of this lawsuit
On March 22, 2023, Kliger filed the Amended Verified Complaint. NYSCEF No. 20.
Subsequently, the parties negotiated a stipulation, dated April 10, 2023 (the “Stipulation”),
whereby the parties agreed that, inter alia, “pending the final resolution of the disputes existing
between them as alleged in the Amended Complaint, or the earlier entry of a Court order to the
contrary, (a) Plaintiff will: (i) withdraw the Motion without prejudice; and . . . [Defendant would
provide Kliger] with “access to all emails (without exception) sent to his Fairmont email address
. . .[and] “provide Plaintiff with full and complete access to information relating to Plaintiff with
full and complete access to information relating to Plaintiff’s insurance clients . . .” NYSCEF
No. 24, Stipulation, at p. 2, ¶¶ (c)(1) and (4). The Stipulation was conditioned on Kliger not
disparaging Fairmont or interfering with its business. Id. at 3.
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B. Shortly After Entering the Stipulation, Fairmont Counter-Sues Alleging that Kliger
Had Breached His Duty of Loyalty, and Obtains a Draconian Temporary Restraining
Order (“Ex Parte TRO”) Barring Kliger From, Inter Alia, Speaking to His Clients
Eleven days later, on April 21, 2023, Fairmont filed counterclaims alleging that Kliger
breached his duty of loyalty. NYSCEF No. 25, Answer. On May 25, 2023, Fairmont filed
amended counterclaims alleging, inter alia, that Kliger had supposedly “disparaged” Fairmont
by, for example, telling “Fairmont’s clients . . . that Fairmont’s clients belonged to Kliger.”
NYSCEF No. 32, Amended Answer at 22. Then, on May 31, 2023, Fairmont filed the Ex Parte
Application for a preliminary injunction and Ex Parte TRO against Kliger. NYSCEF Nos. 34-44.
In support of its Ex Parte Application that led to the Ex Parte TRO, (NYSCEF No. 47), Fairmont
submitted May 31, 2023 affidavits from Moshe Mishkowitz (“Mishkowitz”) and Sam Katz
(“Katz”), long time executives of Fairmont, who relied entirely on hearsay statements and self-
interested testimony alleging that Kliger has disparaged Fairmont or otherwise improperly
interfered in Fairmont’s business. See NYSCEF No. 35 and 39. On May 31, 2023, the Court
signed the Ex Parte TRO. NYSCEF No. 47.
C. Kliger Immediately Filed an Order to Show Cause to Vacate the Ex Parte TRO,
Which Is Still Pending Before this Court
Faced with the draconian restrictions in the Ex Parte TRO and having not had an
opportunity to be heard before its entry, Kliger immediately filed an Order to Show Cause on
June 2, 2023 to vacate the Ex Parte TRO. That Order to Show Cause has remained unsigned
since its filing more than five (5) weeks ago. Unable to earn a livelihood with the Ex Parte TRO
in place, ten (10) days after filing his application for vacatur of the Ex Parte TRO, Kliger filed an
emergency CPLR 5704 application with the Appellate Division, Second Department seeking
review of the Ex Parte TRO.
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D. The Appellate Division, Second Department Modifies the Ex Parte TRO Pursuant to
a Limited CPLR 5704 Review to Exclude Actions “Necessary for Kliger to Maintain
Contact with Insurance Clients Pursuant to the Associate Producer Agreement
On June 14, 2023, the Appellate Division, Second Department modified the Ex Parte
TRO based upon a limited CPLR 5704 review, carving out actions “necessary for Kliger to
maintain contact with insurance clients pursuant to the Associate Producer Agreement” from
each of the restrictions of the Ex Parte TRO. See NYSCEF No. 64. Despite the dictates of the
Appellate Division’s Order—and Kliger’s counsel’s immediate demand that Fairmont comply
with the Appellate Division’s Order—Fairmont continues to refuse to allow Mr. Kliger any
access to the client-owned information on AMS or otherwise. Kliger Affirm. at ¶ 14.
E. Continuing its Campaign to Destroy Kliger, Fairmont Issues Thirteen (13) Subpoenas
on Kliger’s Clients with the Apparent Purpose of Poisoning Kliger’s Client
Relationships Under the Guise of “Discovery” and then Stops Making Any
Contractual Payments under the Associate Producer Agreement
On June 9, 2023, June 12, 2023, and June 19, 2023, Fairmont issued a total of thirteen
(13) non-party subpoenas on Mr. Kliger’s clients, specifically non-parties: (1) Joseph Deutsch of
the Fidella Agency Limited Liability Company; (2) Yitzchak Scheinerman of Rushmore
Management; (3) Yanky Gelbwachs of AJH Management LLC; and (4) Yonason Steif of
Wardell Gardens Rehab Center, LLC; (5) Aron Bistritsky; (6) FoodCo Distributors; (7) Dovy
Schwadel; (8) Bayrock Insurance Agency; (9) Rushmore Management LLC; (10) The Fidella
Agency Limited Liability Company; (11) AJH Management Limited Liability Company; (12)
Shraga Schorr; and (13) the Walden Group (collectively, the “Non-Party Subpoenas). These
entities and individuals are part of Kliger’s “book of business” and many of them submitted
affidavits in support of Kliger’s still-unsigned Order to Show Cause in which they categorically
denied that Kliger disparaged Fairmont or interfered with Fairmont’s business. Kliger Affirm. at
¶¶ 15, 25.
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F. Ratcheting Up the Pressure on Kliger, Fairmont has Wrongfully
Stopped Making Payments to Him—Even According to Fairmont’s Interpretation
of the Agreement—Without Explanation or Justification
Since Kliger’s termination without cause, Fairmont had been making “buyout” payments
to Kliger according to its interpretation of the Agreement, and Kliger has been accepting the
payments in the interim without prejudice to his interpretation, for months. Without warning or
justification, on or about July 3, 2023, just after Kliger moved to quash the subpoenas (NYSCEF
Nos. 73-81), Fairmont stopped making payments to Kliger despite owning him additional
compensation even under its own theory of the case. Kliger Affirm. at ¶ 17. When questioned
about the abrupt and unexplained withholding of payment, Fairmont’s counsel stonewalled and
disingenuously pretended not to understand the issue, even when presented with a past copy of a
payment cover letter from Fairmont to Kliger. Id.
ARGUMENT
I. PRELIMINARILY, FAIRMONT’S MOTION SHOULD BE DENIED
BECAUSE IT SEEKS TO ALTER THE STATUS QUO AND DETERMINE
THE ULTIMATE RIGHTS OF THE PARTIES BEFORE THIS ACTION HAS
BEEN AJUDICATED
The Motion should be denied because the injunction it seeks alters the status quo and has
the effect of deciding the merits before this action has been adjudicated, as implicitly recognized
by the Appellate Division, Second Department. The core issue in this litigation is Kliger’s right
to his book of business post-termination as expressly provided in the Agreement, and an
injunction barring Kliger from communicating with, or dealing with, his book of business
ensures that he will lose his book of business before this action is adjudicated on the merits. See
Kliger Affirm. at ¶¶ 18-20, 26. “[A]bsent extraordinary circumstances [none of which are even
alleged to be present in this case], a preliminary injunction will not issue where to do so would
grant the movant the ultimate relief to which he or she would be entitled in a final judgment.”
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Berman v. TRG Waterfront Lender, LLC, 181 A.D.3d 783, 784-785 (2d Dep’t 2020) (citations
and quotations omitted). The purpose of a preliminary injunction is to preserve the status quo,
(Soundview Cinemas, Inc. v. AC I Soundview, LLC, 149 A.D.3d 1121, 1123 (2d Dep’t 2017)),
not effectively decide ultimate issues.
II. COURTS IMPOSE A HEAVY EVIDENTIARY BURDEN ON PARTIES
SEEKING THE DRASTIC REMEDY OF A PRELIMINARY INJUNCTION,
AND FAIRMONT DOES NOT MEET THAT BURDEN
Unlike a temporary restraining order, which merely requires the movant to show
irreparable injury before the preliminary injunction motion is heard, (CPLR 6313), the burden to
obtain a preliminary injunction is significantly higher. “To obtain a preliminary injunction, a
movant must demonstrate, by clear and convincing evidence, (1) a likelihood of success on
the merits, (2) irreparable injury if a preliminary injunction is not granted, and (3) a balance of
equities in his or her favor.” M.H. Mandelbaum Orthotic & Prosthetic Servs., Inc. v. Werner, 126
A.D.3d 859, 860 (2d Dep’t 2015) (citations omitted) (emphasis added). “A party seeking the
drastic remedy of a preliminary injunction must establish a clear right to that relief under the law
and the undisputed facts.” Radiology Assoc. of Poughkeepsie, PLLC v. Drocea, 87 A.D.3d 1121,
1123 (2d Dep’t 2011) (quoting Omakaze Sushi Rest., Inc. v. Ngan Kam Lee, 57 A.D.3d 497, 497
(2d Dep’t 2008)). Fairmont’s affidavits in support of the Motion do not even approach presenting
“clear and convincing” evidence.
A motion for a preliminary injunction will be denied if it is not supported by competent
evidence. TMP Worldwide Inc. v. Franzino, 269 A.D.2d 332, 332 (1st Dep’t 2000) (“Plaintiff's
motion for a preliminary injunction was properly denied in light of plaintiff's failure to show, by
means of competent evidence, a likelihood of success on the merits and irreparable injury should
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the relief sought be denied.”); Holdsworth v. Doherty, 231 A.D.2d 930, 930 (4th Dep’t 1996)
(denying motion because it was unsupported by “competent proof.”).
Thus, “[c]onclusory statements lacking factual evidentiary detail warrant denial of a
motion seeking a preliminary injunction.” 1234 Broadway LLC v. W. Side SRO Law Project,
Goddard Riverside Community Ctr., 86 A.D.3d 18, 23 (1st Dep’t 2011).
Similarly, hearsay allegations—like those on which Fairmont relies here—are insufficient
to obtain the remedy of a preliminary injunction. Water Quality Ins. Syndicate v. Safe Harbor
Pollution Ins., LLC, 2014 N.Y. Misc. LEXIS 33 *12 (N.Y. Co. 2014) (holding “the court cannot
grant the extreme remedy of a preliminary injunction based on such hearsay”); Brownstone
Agency Inc. v. Distinguished Programs Grp., 2008 N.Y. Misc. LEXIS 8992 *1 (N.Y. Co. 2008)
(holding proof offered in support of a motion for a preliminary injunction “is insufficient because
it consists primarily of hearsay, conjecture and/or conclusory allegations").
And “[s]ince a preliminary injunction prevents litigants from taking actions that they
would otherwise be legally entitled to take in advance of an adjudication on the merits, it is
considered a drastic remedy which should be issued cautiously.” Matter of Related Props., Inc. v.
Town Bd. of Town/Village of Harrison, 22 A.D.3d 587, 590 (2d Dep’t 2005) (citations omitted).
Thus, “[a]lthough the purpose of a preliminary injunction is to preserve the status quo pending a
trial, the remedy is considered a drastic one, which should be used sparingly.” Soundview
Cinemas, Inc., 149 A.D.3d at 1123. As such, the Motion should be denied.
A. Fairmont, Relying Entirely on Hearsay and Self-Interested Testimony, Does Not
Meet Its Burden to Demonstrate A Likelihood Of Success On The Merits
“To sustain its burden of demonstrating a likelihood of success on the merits, the movant
must demonstrate a clear right to relief which is plain from the undisputed facts.” Matter of
Related Props., Inc., 22 A.D.3d at 590 (citations omitted); See also Mosseri v. Fried, 289 A.D.2d
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545, 546 (2d Dep’t 2001) (same); Merrill Lynch Realty Assoc., Inc. v. Burr, 140 A.D.2d 589,
592-593 (2d Dep’t 1988) (same).
Fairmont’s application for a preliminary injunction is instead predicated entirely on
hearsay, conjecture, and self-interested testimony that Kliger has “disparaged” or “interfered”
with Fairmont. Notably missing from Fairmont’s motion is any third-party testimony that might
support Fairmont’s self-interested, hearsay claims. In other words, long on hyperbole but short
on competent evidence, this is a “hail mary” attempt to quash and pressure Kliger and wrest him
of his contractual rights to his book of business before this action can be decided.
Indeed, in support of its application, Fairmont submitted only two May 31, 2023
affirmations from Moshe Mishkowitz (“Mishkowitz”) and Sam Katz (“Katz”) (the “Mishkowitz
Affirm.” and the “Katz Affirm.”, together the “Fairmont Affirmations”), long time executives of
Fairmont. NYSCEF No 35 and 39.
Virtually all of their claims are hearsay—second hand, unspecified complaints:
As further set forth in the Mishkowitz Affirmation we [Mishkowitz and Katz]
have also heard about numerous other instances in which Kliger has misused
Fairmont's confidential information, interfered with Fairmont's business, and
unlawfully solicited its clients.
NYSCEF No. 39, Katz Affirm. at ¶ 20 (emphasis added).
And in each instance where they make a particular allegation, these allegations are based
on hearsay statements, unfounded, conclusory statements, or conjecture:
• Hearsay: Fairmont alleges it lost a client, Living Emunah of Texas, which “informed
Fairmont that Kliger had (falsely) advised Fairmont’s client that the client would need
to add 10% to Fairmont’s quote because Kliger was not being compensated and would
need to charge the client his own additional 10% fee.” NYSCEF No. 35, Mishkowitz
Affirm. at ¶ 30.
• Conjecture: Fairmont alleges that Cue Residential said it was changing brokers because
it received a cheaper quote, but that this lower quote was Fairmont’s quote and
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“somehow . . . someone took the quote and sent it to the client under the guise of it
being from another broker” and this must be Kliger because he is the “only . . . non-
Fairmont employee with access to the quote.” Id. at ¶¶ 31-35.
• Hearsay: Fairmont alleges that Twin Lakes Realty told them that it was told by a
competing broker who said that going forward Kliger would be placing his renewals
through a competing broker. Id. at ¶ 36.
• Hearsay/Conclusory: Fairmont alleges that Kliger told FoodCo that it needed to move
its account away from Fairmont, without providing the basis for this allegation. Id. at ¶
37.
• Hearsay/Conclusory: Fairmont alleges “[W]e have heard from numerous clients who
have been falsely informed that Fairmont stopped making payments owed to Kliger
under the Agreement.” Id. at ¶ 38. Fairmont does not allege from whom it heard this
hearsay.
• Hearsay/Conclusory: Fairmont alleges “[W]e have also learned at least on some
occasions, Kliger has presented clients with a quote without Fairmont’s full fee.” Id. at ¶
39. Again, Fairmont does not even allege from whom it heard this hearsay.
• Hearsay/Conclusory: Fairmont alleges “[M]any times Kliger includes the carriers and
wholesalers in his shenanigans, reaching out to them directly or instructing clients to
reach out directly for cheaper quotes.” Id. at ¶ 40. Yet again, Fairmont does not even
allege from whom it heard this hearsay.
• Hearsay/Conclusory: Fairmont alleges “Kliger has provided clients with Fairmont’s
entire work product (or instructed the client to ask for the work product) so that the
client can take the entire file and simply hand Fairmont’s work to a third-party broker to
bind coverage.” Id. at ¶ 41. Fairmont provides no evidence or basis for this claim.
• Unsubstantiated/Hearsay: Fairmont alleges that “Kliger forwarded a Fairmont client’s
email nonsensically requesting that a commission be lowered to under 2 percent directly
to a wholesaler (which is a fraction of typical commissions), again without authority.”
NYSCEF No. 39, Katz Affirm. at ¶ 13. Fairmont provides no evidence or basis for this
claim.
In addition to this and other hearsay claims, Respondent relies on its own self-interested—
and convenient—testimony of a purported telephone call Mr. Katz allegedly had with Kliger on
May 10, 2023 wherein Kliger allegedly told Fairmont’s executive “he was going to start causing
accounts to move away from Fairmont to other brokers . . .” Id. at ¶ 6. Kliger has testified that
this is “completely false.” Kliger Affirm. at ¶ 24. A review of the single email chain Fairmont
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attaches—it attaches no documentary evidence otherwise—does not show any wrongdoing by
Kliger, but rather shows that Kliger included Mr. Katz of Fairmont in all of the discussions with
the client (which predated the Stipulation in which Fairmont agreed to give Kliger access to
AMS), and Kliger’s sin appears to be that he said “please bind” on behalf of the insured a few
weeks later. See NYSCEF No. 40.
None of this is competent evidence or competent proof sufficient to warrant an injunction,
let alone “clear and convincing.” Fairmont had to provide “detailed, competent evidence, not
merely conclusory assertions.” WebMD Health Corp. v. Martin, 2006 NYLJ LEXIS 4372, *12-
13 (N.Y. Co. Aug. 7, 2006) (citation omitted).
B. Fairmont’s Motion Should Be Denied Because, at Best, The Facts are in Sharp
Dispute
Putting aside that the Fairmont Affirmations contain almost exclusively Mishkowitz’s
and Katz’s versions of what other people supposedly told them and are insufficient to support the
imposition of this injunction, what they claim about things Kliger said or did is false. Kliger
Affirm. at ¶¶ 24-25. Where “the facts of [the] case are sharply disputed,” the Court should deny a
motion for a preliminary injunction. Mosseri, 289 A.D.2d at 546; see als
Preview
FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS MORDECHAI KLIGER, Index No. 505356/2023 Plaintiff, Justice Reginald A. Boddie v. Motion Seq. No. 3 FAIRMONT INSURANCE BROKERS LLC, formerly known as FAIRMONT INSURANCE BROKERS, LTD., Defendant. PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT’S MOTION FOR A PRELIMINARY INJUNCTION 1 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 TABLE OF CONTENTS PRELIMINARY STATEMENT .................................................................................................... 1 FACTUAL BACKGROUND ......................................................................................................... 2 A. In February 2023, Kliger is Forced to Bring this Action Because Fairmont Refuses to Honor its 2005 Agreement with Him.......................................................................................... 2 1. Under his Associate Producer Agreement with Fairmont, if Fairmont terminates Kliger without cause, Kliger is entitled to maintain his book of business and to receive 40% commission.............................................................................................................................. 2 2. After terminating Kliger without cause, Fairmont deprives Kliger of access to the information necessary to maintain his book of business and takes other steps to deprive Kliger of his rights under the Associate Producer Agreement ............................................... 3 3. Kliger commences this action and obtains a court order requiring Fairmont to restore his access to the information necessary to maintain his book of business ............................. 4 4. Before the preliminary injunction hearing, Fairmont stipulates to provide Kliger access to the necessary information pending the outcome of this lawsuit .............................. 4 B. Shortly After Entering the Stipulation, Fairmont Counter-Sues Alleging that Kliger Had Breached His Duty of Loyalty, and Obtains a Draconian Temporary Restraining Order (“Ex Parte TRO”) Barring Kliger From, Inter Alia, Speaking to His Clients ..................................... 5 C. Kliger Immediately Filed an Order to Show Cause to Vacate the Ex Parte TRO, Which Is Still Pending Before this Court ................................................................................................... 5 D. The Appellate Division, Second Department Modifies the Ex Parte TRO Pursuant to a Limited CPLR 5704 Review to Exclude Actions “Necessary for Kliger to Maintain Contact with Insurance Clients Pursuant to the Associate Producer Agreement ..................................... 6 E. Continuing its Campaign to Destroy Kliger, Fairmont Issues Thirteen (13) Subpoenas on Kliger’s Clients with the Apparent Purpose of Poisoning Kliger’s Client Relationships Under the Guise of “Discovery” and then Stops Making Any Contractual Payments under the Associate Producer Agreement ................................................................................................... 6 F. Ratcheting Up the Pressure on Kliger, Fairmont has Wrongfully Stopped Making Payments to Him—Even According to Fairmont’s Interpretation of the Agreement—Without Explanation or Justification ........................................................................................................ 7 ARGUMENT .................................................................................................................................. 7 I. PRELIMINARILY, FAIRMONT’S MOTION SHOULD BE DENIED BECAUSE IT SEEKS TO ALTER THE STATUS QUO AND DETERMINE THE ULTIMATE RIGHTS OF THE PARTIES BEFORE THIS ACTION HAS BEEN AJUDICATED ............................. 7 II. COURTS IMPOSE A HEAVY EVIDENTIARY BURDEN ON PARTIES SEEKING THE DRASTIC REMEDY OF A PRELIMINARY INJUNCTION, AND FAIRMONT DOES NOT MEET THAT BURDEN ................................................................................................... 8 A. Fairmont, Relying Entirely on Hearsay and Self-Interested Testimony, Does Not Meet Its Burden to Demonstrate A Likelihood Of Success On The Merits .................................... 9 ii 2 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 B. Fairmont’s Motion Should Be Denied Because, at Best, The Facts are in Sharp Dispute 12 C. Fairmont is Unlikely to Succeed on the Merits of its Claims ....................................... 13 1. Breach of Contract/Stipulation ................................................................................. 13 2. Breach of the Implied Covenant of Good Faith and Fair Dealing ............................ 15 3. Tortious Interference ................................................................................................. 16 III. FAIRMONT’S MOTION SHOULD BE DENIED BECAUSE IT FAILS TO ESTABLISH IRREPARABLE INJURY ................................................................................. 17 IV. FAIRMONT’S MOTION SHOULD BE DENIED BECAUSE IT FAILS TO ESTABLISH THAT THE EQUITIES WEIGH IN ITS FAVOR ............................................ 18 V. IF THE COURT DOES GRANT AN INJUNCTION, IT SHOULD REQUIRE FAIRMONT TO POST AN UNDERTAKING IN THE AMOUNT OF AT LEAST $65,000,000.00, THE VALUE OF KLIGER’S BOOK OF BUSINESS.................................. 20 CONCLUSION ............................................................................................................................. 21 WORD COUNT CERTIFICATION ............................................................................................. 22 iii 3 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 TABLE OF AUTHORITIES CASES 1234 Broadway LLC v. W. Side SRO Law Project, Goddard Riverside Community Ctr., 86 A.D.3d 18 (1st Dep’t 2011) ................................................................................................................................................... 13 BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999) ................................................................................................................................................... 18 Berkoski v. Bd. of Trustees of Inc. Vil. of Southampton, 67 A.D.3d 840 (2d Dep’t 2009) ................................................................................................................................................... 22 Berman v. TRG Waterfront Lender, LLC, 181 A.D.3d 783 (2d Dep’t 2020) ................................................................................................................................................... 12 Brownstone Agency Inc. v. Distinguished Programs Grp., 2008 N.Y. Misc. LEXIS 8992 (N.Y. Co. 2008) ................................................................................................................................................... 13 Canstar v. J.A. Jones Constr. Co., 212 A.D.2d 452 (1st Dep’t 1995) ................................................................................................................................................... 19 Centi v. McGillin, 34 N.Y.3d 1072 (2019) ................................................................................................................................................... 23 Destiny USA Holdings, LLC v. Citigroup Glob. Mkts. Realty Corp., 69 A.D.3d 212 (4th Dep’t 2009) ................................................................................................................................................... 24 Di Stefano v. PSFB Associates, 103 A.D.2d 839 (2d Dep’t 1984) ................................................................................................................................................... 21 DiFabio v. Omnipoint Communications, Inc., 66 A.D.3d 635 (2d Dep’t 2009) ............................................................................................................................................. 21, 22 Englehard Corp. v. Research Corp., 268 A.D.2d 358 (1st Dep’t 2000) ................................................................................................................................................... 19 Fasolino Foods Co. v. Banca Nazionale Del Lavoro, 961 F.2d 1052 (2d Cir. 1992) ................................................................................................................................................... 19 Fischer v. Deitsch, 168 A.D.2d 599 (2d Dep’t 1990) ................................................................................................................................................... 22 Harris v. Provident Life & Accident Ins. Co., 310 F.3d 73 (2d Cir. 2002) ................................................................................................................................................... 19 Holdsworth v. Doherty, 231 A.D.2d 930 (4th Dep’t 1996) ................................................................................................................................................... 13 John G. Ullman & Assoc., Inc. v. BCK Partners, Inc., 139 A.D.3d 1358 (4th Dep’t 2016) ................................................................................................................................................... 22 Lama Holding Co v. Smith Barney Inc., 88 N.Y.2d 413 (1996) ................................................................................................................................................... 17 M.H. Mandelbaum Orthotic & Prosthetic Servs., Inc. v. Werner, 126 A.D.3d 859 (2d Dep’t 2015) ................................................................................................................................................... 12 Mandelblatt v. Devon Stores, Inc., 132 A.D.2d 162 (1st Dep’t 1987) ................................................................................................................................................... 21 Margolies v. Encounter, Inc., 42 N.Y.2d 475 (1977) ................................................................................................................................................... 24 Matter of Related Props., Inc. v. Town Bd. of Town/Village of Harrison, 22 A.D.3d 587 (2d Dep’t 2005) ................................................................................................................................................... 13 Merrill Lynch Realty Assoc., Inc. v Burr, 140 A.D.2d 589 (2d Dep’t 1988) iv 4 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 ................................................................................................................................................... 14 Mosseri v Fried, 289 A.D.2d 545 (2d Dep’t 2001) ............................................................................................................................................. 14, 16 Omakaze Sushi Rest., Inc. v. Ngan Kam Lee, 57 A.D.3d 497 (2d Dep’t 2008) ............................................................................................................................................. 12, 16 Radiology Assoc. of Poughkeepsie, PLLC v. Drocea, 87 A.D.3d 1121 (2d Dep’t 2011) ................................................................................................................................................... 12 Rosenberg Diamond Dev. Corp. v. Appel, 290 A.D.2d 239 (1st Dep’t 2002) ................................................................................................................................................... 24 Rourke Developers Inc. v. Cottrell-Hajeck Inc., 285 A.D.2d 805 (3d Dep't 2001) ................................................................................................................................................... 24 Soundview Cinemas, Inc. v. AC I Soundview, LLC, 149 A.D.3d 1121 (2d Dep’t 2017) ............................................................................................................................................. 12, 13 SportsChannel America Associates v. National Hockey League, 186 A.D.2d 417 (1st Dep’t 1992) ................................................................................................................................................... 22 TeeVee Toons, Inc. v. Prudential Sec. Credit Corp., LLC, 8 A.D.3d 134 (1st Dep’t 2004) ................................................................................................................................................... 19 The Hawthorne Group, LLC v. RRE Ventures, 7 A.D.3d 320 (1st Dep’t 2004) ................................................................................................................................................... 19 TMP Worldwide Inc. v. Franzino, 269 A.D.2d 332 (1st Dep’t 2000) ................................................................................................................................................... 12 Vigoda v. DCA Prods. Plus Inc., 293 A.D.2d 265 (1st Dep’t 2002) ................................................................................................................................................... 21 Water Quality Ins. Syndicate v. Safe Harbor Pollution Ins., LLC, 2014 N.Y. Misc. LEXIS 33 (N.Y. Co. 2014) ................................................................................................................................................... 13 WebMD Health Corp. v. Martin, 2006 NYLJ LEXIS 4372 (N.Y. Co. Aug. 7, 2006) ................................................................................................................................................... 16 White Plains Coat & Apron Co., Inc v. Cintas Corp., 8 N.Y.3d 422 (2007) ................................................................................................................................................... 20 v 5 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 Plaintiff Mordechai Kliger (“Kliger” or “Plaintiff”), through his undersigned counsel, respectfully submits this Memorandum of Law in Opposition to Defendant Fairmont Insurance Brokers LLC, f/k/a Fairmont Insurance Brokers, Ltd.’s (“Fairmont” or “Defendant”) motion, brought by order to show cause, seeking a preliminary injunction (the “Motion”). (Mot. Seq. No. 3) (NYSCEF Nos. 34-44). PRELIMINARY STATEMENT This case, and the Motion, are about Fairmont’s determination to ruin Kliger’s career and destroy his livelihood because Kliger had the chutzpah not to forgo his valuable contractual rights just so the owners of Fairmont could make tens of millions of dollars for themselves from the sale of the company to the detriment of Kliger. Infuriated by Kliger’s refusal to capitulate to their unreasonable demands, the owners of Fairmont have continued to punish Kliger during the pendency of this action by: (1) allowing clients that comprise Kliger’s “book of business”—to which he is entitled to a 40% commission—to take their business elsewhere without Kliger’s knowledge or input; (2) denying him access to client information necessary to earn a living; (3) targeting Kliger’s clients with a barrage of subpoenas; and, most recently (4) stopping all payments under the parties’ contract, even those payments to which Fairmont concedes Kliger is entitled as part of a buyout. As detailed herein, the Motion—which relies entirely on inadmissible hearsay—should be denied because: (1) Fairmont is unlikely to succeed on the merits of its claims in this case, with hotly disputed facts; (2) Fairmont will suffer no irreparable harm; and the (3) equities way heavily in Kliger’s favor. In sum, Fairmont should not be allowed to use its financial leverage over Kliger as a cudgel any longer while the parties litigate the merits of their respective claims. 1 6 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 FACTUAL BACKGROUND A. In February 2023, Kliger is Forced to Bring this Action Because Fairmont Refuses to Honor its 2005 Agreement with Him 1. Under his Associate Producer Agreement with Fairmont, if Fairmont terminates Kliger without cause, Kliger is entitled to maintain his book of business and to receive 40% commission This action concerns Kliger’s rights under his agreement with Fairmont, an insurance brokerage agency. NYSCEF No. 1, Verified Complaint (“Compl”); NYSCEF No. 20, Verified Amended Complaint (“Am. Compl.”). Over eighteen (18) years ago, on or about February 18, 2005, Kliger, as “Associate Producer,” entered into an Associate Producer Agreement (the “Agreement”) with Defendant, as “Agency.”1 Among other things, the agreement provided that Kliger was an independent contractor for Fairmont, and that that, inter alia, he was obligated to place his insurance clients with Fairmont to procure insurance policies, and would receive 40% of Fairmont’s gross commission for each such placement. NYSCEF No. 21, Associate Producer Agreement at §§ 2, 17. If Kliger was terminated without cause (which he ultimately was), the Agreement provided that “[Kliger] can still maintain [his] book of business and receive 40% commission from this book.” Id. at § 24 (emphasis added). 1 A copy of the Agreement is annexed to NYSCEF No. 20, the Verified Amended Complaint (“Am. Compl.”), as Exhibit A (NYSCEF No. 21). It is separately annexed to the Kliger Affirmation dated July 11, 2023 as Exhibit A. The Am. Compl. is annexed to the Seddio Affirm. as Exhibit A. 2 7 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 2. After terminating Kliger without cause, Fairmont deprives Kliger of access to the information necessary to maintain his book of business and takes other steps to deprive Kliger of his rights under the Associate Producer Agreement In early January 2023, Kliger was advised that Fairmont intended to sell substantially all of its assets to a third-party. Kliger Affirm. at ¶ 6. Shortly thereafter, Kliger was presented with a series of draft agreements intended to delineate the terms of the proposed post-sale relationship between the third-party and Kliger. Id. Kliger declined to enter into any of these draft agreements because they required that he forgo valuable contractual and financial rights he contracted for at arms lengths years earlier before he built his significant book of business. Id. Frustrated by Kliger’s refusal to kowtow to Fairmont’s demand to walk away from the fruits of his book of business that he had built over two decades, by letter to Kliger dated February 14, 2023 (the “Termination Letter”), Fairmont’s President, Moishe Mishkowitz, advised that Fairmont was terminating the Agreement without cause. NYSCEF No. 23, Termination Letter.2 Almost immediately after the termination, Fairmont began to systematically curtail Kliger’s access to information critical to the servicing of his insurance clients and, by extension, his entire book of business. NYSCEF No. 20, Am. Compl. at ¶ 28. For example, Kliger requires full access to historical client-owned information stored on the Agency Management System (AMS) maintained by Fairmont to properly service his insurance clients. Although Kliger was initially still able to access basic information on the system, he had been denied access to more detailed information (such as copies of prior insurance policies) that were previously accessible to him and necessary to maintain his book of business. Id. at ¶ 29. Kliger made repeated requests to Fairmont to restore to him full access to AMS but those requests went unanswered, thereby 2 A copy of the Termination Letter is also annexed to the Kliger Affirm. as Exhibit B. 3 8 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 impeding Kliger’s ability to service his insurance clients and jeopardizing his relationships with those clients. Id. at ¶¶ 29-30. 3. Kliger commences this action and obtains a court order requiring Fairmont to restore his access to the information necessary to maintain his book of business Kliger commenced this action on February 17, 2023. NYSCEF No. 1, Compl. On February 21, 2023, through counsel, Kliger filed an order to show cause seeking a temporary restraining order and a preliminary injunction barring Fairmont from depriving him of access to information necessary for him to service his book of business. NYSCEF Nos. 4-14. On February 24, 2023, the Court issued an order that required Defendant to “restore Plaintiff’s full and complete access to information relating to Plaintiff’s insurance clients stored electronically on the Agency Management System (AMS) maintained by Defendant,” pending the hearing on Kliger’s motion for a preliminary injunction. NYSCEF No. 15, Initial TRO at 2. 4. Before the preliminary injunction hearing, Fairmont stipulates to provide Kliger access to the necessary information pending the outcome of this lawsuit On March 22, 2023, Kliger filed the Amended Verified Complaint. NYSCEF No. 20. Subsequently, the parties negotiated a stipulation, dated April 10, 2023 (the “Stipulation”), whereby the parties agreed that, inter alia, “pending the final resolution of the disputes existing between them as alleged in the Amended Complaint, or the earlier entry of a Court order to the contrary, (a) Plaintiff will: (i) withdraw the Motion without prejudice; and . . . [Defendant would provide Kliger] with “access to all emails (without exception) sent to his Fairmont email address . . .[and] “provide Plaintiff with full and complete access to information relating to Plaintiff with full and complete access to information relating to Plaintiff’s insurance clients . . .” NYSCEF No. 24, Stipulation, at p. 2, ¶¶ (c)(1) and (4). The Stipulation was conditioned on Kliger not disparaging Fairmont or interfering with its business. Id. at 3. 4 9 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 B. Shortly After Entering the Stipulation, Fairmont Counter-Sues Alleging that Kliger Had Breached His Duty of Loyalty, and Obtains a Draconian Temporary Restraining Order (“Ex Parte TRO”) Barring Kliger From, Inter Alia, Speaking to His Clients Eleven days later, on April 21, 2023, Fairmont filed counterclaims alleging that Kliger breached his duty of loyalty. NYSCEF No. 25, Answer. On May 25, 2023, Fairmont filed amended counterclaims alleging, inter alia, that Kliger had supposedly “disparaged” Fairmont by, for example, telling “Fairmont’s clients . . . that Fairmont’s clients belonged to Kliger.” NYSCEF No. 32, Amended Answer at 22. Then, on May 31, 2023, Fairmont filed the Ex Parte Application for a preliminary injunction and Ex Parte TRO against Kliger. NYSCEF Nos. 34-44. In support of its Ex Parte Application that led to the Ex Parte TRO, (NYSCEF No. 47), Fairmont submitted May 31, 2023 affidavits from Moshe Mishkowitz (“Mishkowitz”) and Sam Katz (“Katz”), long time executives of Fairmont, who relied entirely on hearsay statements and self- interested testimony alleging that Kliger has disparaged Fairmont or otherwise improperly interfered in Fairmont’s business. See NYSCEF No. 35 and 39. On May 31, 2023, the Court signed the Ex Parte TRO. NYSCEF No. 47. C. Kliger Immediately Filed an Order to Show Cause to Vacate the Ex Parte TRO, Which Is Still Pending Before this Court Faced with the draconian restrictions in the Ex Parte TRO and having not had an opportunity to be heard before its entry, Kliger immediately filed an Order to Show Cause on June 2, 2023 to vacate the Ex Parte TRO. That Order to Show Cause has remained unsigned since its filing more than five (5) weeks ago. Unable to earn a livelihood with the Ex Parte TRO in place, ten (10) days after filing his application for vacatur of the Ex Parte TRO, Kliger filed an emergency CPLR 5704 application with the Appellate Division, Second Department seeking review of the Ex Parte TRO. 5 10 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 D. The Appellate Division, Second Department Modifies the Ex Parte TRO Pursuant to a Limited CPLR 5704 Review to Exclude Actions “Necessary for Kliger to Maintain Contact with Insurance Clients Pursuant to the Associate Producer Agreement On June 14, 2023, the Appellate Division, Second Department modified the Ex Parte TRO based upon a limited CPLR 5704 review, carving out actions “necessary for Kliger to maintain contact with insurance clients pursuant to the Associate Producer Agreement” from each of the restrictions of the Ex Parte TRO. See NYSCEF No. 64. Despite the dictates of the Appellate Division’s Order—and Kliger’s counsel’s immediate demand that Fairmont comply with the Appellate Division’s Order—Fairmont continues to refuse to allow Mr. Kliger any access to the client-owned information on AMS or otherwise. Kliger Affirm. at ¶ 14. E. Continuing its Campaign to Destroy Kliger, Fairmont Issues Thirteen (13) Subpoenas on Kliger’s Clients with the Apparent Purpose of Poisoning Kliger’s Client Relationships Under the Guise of “Discovery” and then Stops Making Any Contractual Payments under the Associate Producer Agreement On June 9, 2023, June 12, 2023, and June 19, 2023, Fairmont issued a total of thirteen (13) non-party subpoenas on Mr. Kliger’s clients, specifically non-parties: (1) Joseph Deutsch of the Fidella Agency Limited Liability Company; (2) Yitzchak Scheinerman of Rushmore Management; (3) Yanky Gelbwachs of AJH Management LLC; and (4) Yonason Steif of Wardell Gardens Rehab Center, LLC; (5) Aron Bistritsky; (6) FoodCo Distributors; (7) Dovy Schwadel; (8) Bayrock Insurance Agency; (9) Rushmore Management LLC; (10) The Fidella Agency Limited Liability Company; (11) AJH Management Limited Liability Company; (12) Shraga Schorr; and (13) the Walden Group (collectively, the “Non-Party Subpoenas). These entities and individuals are part of Kliger’s “book of business” and many of them submitted affidavits in support of Kliger’s still-unsigned Order to Show Cause in which they categorically denied that Kliger disparaged Fairmont or interfered with Fairmont’s business. Kliger Affirm. at ¶¶ 15, 25. 6 11 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 F. Ratcheting Up the Pressure on Kliger, Fairmont has Wrongfully Stopped Making Payments to Him—Even According to Fairmont’s Interpretation of the Agreement—Without Explanation or Justification Since Kliger’s termination without cause, Fairmont had been making “buyout” payments to Kliger according to its interpretation of the Agreement, and Kliger has been accepting the payments in the interim without prejudice to his interpretation, for months. Without warning or justification, on or about July 3, 2023, just after Kliger moved to quash the subpoenas (NYSCEF Nos. 73-81), Fairmont stopped making payments to Kliger despite owning him additional compensation even under its own theory of the case. Kliger Affirm. at ¶ 17. When questioned about the abrupt and unexplained withholding of payment, Fairmont’s counsel stonewalled and disingenuously pretended not to understand the issue, even when presented with a past copy of a payment cover letter from Fairmont to Kliger. Id. ARGUMENT I. PRELIMINARILY, FAIRMONT’S MOTION SHOULD BE DENIED BECAUSE IT SEEKS TO ALTER THE STATUS QUO AND DETERMINE THE ULTIMATE RIGHTS OF THE PARTIES BEFORE THIS ACTION HAS BEEN AJUDICATED The Motion should be denied because the injunction it seeks alters the status quo and has the effect of deciding the merits before this action has been adjudicated, as implicitly recognized by the Appellate Division, Second Department. The core issue in this litigation is Kliger’s right to his book of business post-termination as expressly provided in the Agreement, and an injunction barring Kliger from communicating with, or dealing with, his book of business ensures that he will lose his book of business before this action is adjudicated on the merits. See Kliger Affirm. at ¶¶ 18-20, 26. “[A]bsent extraordinary circumstances [none of which are even alleged to be present in this case], a preliminary injunction will not issue where to do so would grant the movant the ultimate relief to which he or she would be entitled in a final judgment.” 7 12 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 Berman v. TRG Waterfront Lender, LLC, 181 A.D.3d 783, 784-785 (2d Dep’t 2020) (citations and quotations omitted). The purpose of a preliminary injunction is to preserve the status quo, (Soundview Cinemas, Inc. v. AC I Soundview, LLC, 149 A.D.3d 1121, 1123 (2d Dep’t 2017)), not effectively decide ultimate issues. II. COURTS IMPOSE A HEAVY EVIDENTIARY BURDEN ON PARTIES SEEKING THE DRASTIC REMEDY OF A PRELIMINARY INJUNCTION, AND FAIRMONT DOES NOT MEET THAT BURDEN Unlike a temporary restraining order, which merely requires the movant to show irreparable injury before the preliminary injunction motion is heard, (CPLR 6313), the burden to obtain a preliminary injunction is significantly higher. “To obtain a preliminary injunction, a movant must demonstrate, by clear and convincing evidence, (1) a likelihood of success on the merits, (2) irreparable injury if a preliminary injunction is not granted, and (3) a balance of equities in his or her favor.” M.H. Mandelbaum Orthotic & Prosthetic Servs., Inc. v. Werner, 126 A.D.3d 859, 860 (2d Dep’t 2015) (citations omitted) (emphasis added). “A party seeking the drastic remedy of a preliminary injunction must establish a clear right to that relief under the law and the undisputed facts.” Radiology Assoc. of Poughkeepsie, PLLC v. Drocea, 87 A.D.3d 1121, 1123 (2d Dep’t 2011) (quoting Omakaze Sushi Rest., Inc. v. Ngan Kam Lee, 57 A.D.3d 497, 497 (2d Dep’t 2008)). Fairmont’s affidavits in support of the Motion do not even approach presenting “clear and convincing” evidence. A motion for a preliminary injunction will be denied if it is not supported by competent evidence. TMP Worldwide Inc. v. Franzino, 269 A.D.2d 332, 332 (1st Dep’t 2000) (“Plaintiff's motion for a preliminary injunction was properly denied in light of plaintiff's failure to show, by means of competent evidence, a likelihood of success on the merits and irreparable injury should 8 13 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 the relief sought be denied.”); Holdsworth v. Doherty, 231 A.D.2d 930, 930 (4th Dep’t 1996) (denying motion because it was unsupported by “competent proof.”). Thus, “[c]onclusory statements lacking factual evidentiary detail warrant denial of a motion seeking a preliminary injunction.” 1234 Broadway LLC v. W. Side SRO Law Project, Goddard Riverside Community Ctr., 86 A.D.3d 18, 23 (1st Dep’t 2011). Similarly, hearsay allegations—like those on which Fairmont relies here—are insufficient to obtain the remedy of a preliminary injunction. Water Quality Ins. Syndicate v. Safe Harbor Pollution Ins., LLC, 2014 N.Y. Misc. LEXIS 33 *12 (N.Y. Co. 2014) (holding “the court cannot grant the extreme remedy of a preliminary injunction based on such hearsay”); Brownstone Agency Inc. v. Distinguished Programs Grp., 2008 N.Y. Misc. LEXIS 8992 *1 (N.Y. Co. 2008) (holding proof offered in support of a motion for a preliminary injunction “is insufficient because it consists primarily of hearsay, conjecture and/or conclusory allegations"). And “[s]ince a preliminary injunction prevents litigants from taking actions that they would otherwise be legally entitled to take in advance of an adjudication on the merits, it is considered a drastic remedy which should be issued cautiously.” Matter of Related Props., Inc. v. Town Bd. of Town/Village of Harrison, 22 A.D.3d 587, 590 (2d Dep’t 2005) (citations omitted). Thus, “[a]lthough the purpose of a preliminary injunction is to preserve the status quo pending a trial, the remedy is considered a drastic one, which should be used sparingly.” Soundview Cinemas, Inc., 149 A.D.3d at 1123. As such, the Motion should be denied. A. Fairmont, Relying Entirely on Hearsay and Self-Interested Testimony, Does Not Meet Its Burden to Demonstrate A Likelihood Of Success On The Merits “To sustain its burden of demonstrating a likelihood of success on the merits, the movant must demonstrate a clear right to relief which is plain from the undisputed facts.” Matter of Related Props., Inc., 22 A.D.3d at 590 (citations omitted); See also Mosseri v. Fried, 289 A.D.2d 9 14 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 545, 546 (2d Dep’t 2001) (same); Merrill Lynch Realty Assoc., Inc. v. Burr, 140 A.D.2d 589, 592-593 (2d Dep’t 1988) (same). Fairmont’s application for a preliminary injunction is instead predicated entirely on hearsay, conjecture, and self-interested testimony that Kliger has “disparaged” or “interfered” with Fairmont. Notably missing from Fairmont’s motion is any third-party testimony that might support Fairmont’s self-interested, hearsay claims. In other words, long on hyperbole but short on competent evidence, this is a “hail mary” attempt to quash and pressure Kliger and wrest him of his contractual rights to his book of business before this action can be decided. Indeed, in support of its application, Fairmont submitted only two May 31, 2023 affirmations from Moshe Mishkowitz (“Mishkowitz”) and Sam Katz (“Katz”) (the “Mishkowitz Affirm.” and the “Katz Affirm.”, together the “Fairmont Affirmations”), long time executives of Fairmont. NYSCEF No 35 and 39. Virtually all of their claims are hearsay—second hand, unspecified complaints: As further set forth in the Mishkowitz Affirmation we [Mishkowitz and Katz] have also heard about numerous other instances in which Kliger has misused Fairmont's confidential information, interfered with Fairmont's business, and unlawfully solicited its clients. NYSCEF No. 39, Katz Affirm. at ¶ 20 (emphasis added). And in each instance where they make a particular allegation, these allegations are based on hearsay statements, unfounded, conclusory statements, or conjecture: • Hearsay: Fairmont alleges it lost a client, Living Emunah of Texas, which “informed Fairmont that Kliger had (falsely) advised Fairmont’s client that the client would need to add 10% to Fairmont’s quote because Kliger was not being compensated and would need to charge the client his own additional 10% fee.” NYSCEF No. 35, Mishkowitz Affirm. at ¶ 30. • Conjecture: Fairmont alleges that Cue Residential said it was changing brokers because it received a cheaper quote, but that this lower quote was Fairmont’s quote and 10 15 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 “somehow . . . someone took the quote and sent it to the client under the guise of it being from another broker” and this must be Kliger because he is the “only . . . non- Fairmont employee with access to the quote.” Id. at ¶¶ 31-35. • Hearsay: Fairmont alleges that Twin Lakes Realty told them that it was told by a competing broker who said that going forward Kliger would be placing his renewals through a competing broker. Id. at ¶ 36. • Hearsay/Conclusory: Fairmont alleges that Kliger told FoodCo that it needed to move its account away from Fairmont, without providing the basis for this allegation. Id. at ¶ 37. • Hearsay/Conclusory: Fairmont alleges “[W]e have heard from numerous clients who have been falsely informed that Fairmont stopped making payments owed to Kliger under the Agreement.” Id. at ¶ 38. Fairmont does not allege from whom it heard this hearsay. • Hearsay/Conclusory: Fairmont alleges “[W]e have also learned at least on some occasions, Kliger has presented clients with a quote without Fairmont’s full fee.” Id. at ¶ 39. Again, Fairmont does not even allege from whom it heard this hearsay. • Hearsay/Conclusory: Fairmont alleges “[M]any times Kliger includes the carriers and wholesalers in his shenanigans, reaching out to them directly or instructing clients to reach out directly for cheaper quotes.” Id. at ¶ 40. Yet again, Fairmont does not even allege from whom it heard this hearsay. • Hearsay/Conclusory: Fairmont alleges “Kliger has provided clients with Fairmont’s entire work product (or instructed the client to ask for the work product) so that the client can take the entire file and simply hand Fairmont’s work to a third-party broker to bind coverage.” Id. at ¶ 41. Fairmont provides no evidence or basis for this claim. • Unsubstantiated/Hearsay: Fairmont alleges that “Kliger forwarded a Fairmont client’s email nonsensically requesting that a commission be lowered to under 2 percent directly to a wholesaler (which is a fraction of typical commissions), again without authority.” NYSCEF No. 39, Katz Affirm. at ¶ 13. Fairmont provides no evidence or basis for this claim. In addition to this and other hearsay claims, Respondent relies on its own self-interested— and convenient—testimony of a purported telephone call Mr. Katz allegedly had with Kliger on May 10, 2023 wherein Kliger allegedly told Fairmont’s executive “he was going to start causing accounts to move away from Fairmont to other brokers . . .” Id. at ¶ 6. Kliger has testified that this is “completely false.” Kliger Affirm. at ¶ 24. A review of the single email chain Fairmont 11 16 of 27 FILED: KINGS COUNTY CLERK 07/12/2023 12:18 PM INDEX NO. 505356/2023 NYSCEF DOC. NO. 89 RECEIVED NYSCEF: 07/12/2023 attaches—it attaches no documentary evidence otherwise—does not show any wrongdoing by Kliger, but rather shows that Kliger included Mr. Katz of Fairmont in all of the discussions with the client (which predated the Stipulation in which Fairmont agreed to give Kliger access to AMS), and Kliger’s sin appears to be that he said “please bind” on behalf of the insured a few weeks later. See NYSCEF No. 40. None of this is competent evidence or competent proof sufficient to warrant an injunction, let alone “clear and convincing.” Fairmont had to provide “detailed, competent evidence, not merely conclusory assertions.” WebMD Health Corp. v. Martin, 2006 NYLJ LEXIS 4372, *12- 13 (N.Y. Co. Aug. 7, 2006) (citation omitted). B. Fairmont’s Motion Should Be Denied Because, at Best, The Facts are in Sharp Dispute Putting aside that the Fairmont Affirmations contain almost exclusively Mishkowitz’s and Katz’s versions of what other people supposedly told them and are insufficient to support the imposition of this injunction, what they claim about things Kliger said or did is false. Kliger Affirm. at ¶¶ 24-25. Where “the facts of [the] case are sharply disputed,” the Court should deny a motion for a preliminary injunction. Mosseri, 289 A.D.2d at 546; see als