Asbury MS Gray-Daniels, L.L.C. v. Daniels

812 F. Supp. 2d 771, 2011 U.S. Dist. LEXIS 93716, 2011 WL 3684529
CourtDistrict Court, S.D. Mississippi
DecidedAugust 22, 2011
Docket1:11-cv-00028
StatusPublished
Cited by2 cases

This text of 812 F. Supp. 2d 771 (Asbury MS Gray-Daniels, L.L.C. v. Daniels) is published on Counsel Stack Legal Research, covering District Court, S.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Asbury MS Gray-Daniels, L.L.C. v. Daniels, 812 F. Supp. 2d 771, 2011 U.S. Dist. LEXIS 93716, 2011 WL 3684529 (S.D. Miss. 2011).

Opinion

ORDER GRANTING PRELIMINARY INJUNCTION

HENRY T. WINGATE, District Judge.

Before this court is the motion of plaintiffs Asbury MS Gray-Daniels, L.L.C. and Asbury Automotive Arkansas, L.L.C., for a temporary restraining order, preliminary injunction and permanent injunction [docket no. 3]. Plaintiffs filed said motion pursuant to Fed.R.Civ.P. 65. 1

*774 The interrogatory for resolution owes its existence to the sale and purchase of a car dealership, a concomitant asset purchase agreement with a non-competition clause, and a difference of opinion whether that provision has been violated. This skeletal overview is incomplete without identification of the principals: Asbury Automotive Arkansas, L.L.C.; Asbury MS Gray-Daniels, L.L.C.; Robert E. Gray; Steven M. Inzinna; Noel E. Daniels; and Joe M. Usry, Jr., of Usry Enterprises, L.L.C., d/b/a Joe Usry Chrysler Jeep Dodge.

Plaintiff Asbury Automotive Arkansas, L.L.C. bought a car dealership sold by Robert E. Gray, Steven M. Inzinna, and defendant Noel E. Daniels pursuant to an Asset Purchase Agreement, which contained a non-competition provision [docket no. 1-2]. Daniels left employment with plaintiff Asbury MS Gray-Daniels, L.L.C. and soon thereafter began working for defendant Joe M. Usry, Jr., at Usry Enterprises, L.L.C. d/b/a Joe Usry Chrysler Jeep Dodge. Plaintiffs ask this court to find that Daniels has violated the non-competition provision of the Asset Purchase Agreement and to require Daniels and the other defendants to act in compliance with that provision. Upon due consideration, this court finds that the motion should be granted.

I. Relevant Factual Findings

On April 4, 2001, Brandon Ford, Inc. d/b/a Gray-Daniels Ford (“Gray-Daniels”), along with its principals, Robert E. Gray, Noel E. Daniels, and Steven M. Inzinna (“the sellers”), entered into an Asset Purchase Agreement (“APA”) with Asbury Automotive Arkansas, L.L.C. (“Asbury Arkansas”) by which Asbury Arkansas purchased the Ford dealership known as Gray-Daniels Ford located in Brandon, Mississippi. Daniels remained employed by Asbury MS Gray-Daniels, L.L.C. (“Asbury MS”) at Gray-Daniels until he terminated his employment there in late November 2010. By December 1, 2010, Daniels had begun employment with Joe Usry at Usry Enterprises, L.L.C. d/b/a Joe Usry Chrysler Jeep Dodge (“Usry dealership”) in Jackson, Mississippi.

Plaintiffs Asbury MS and Asbury Arkansas allege that Daniels’ ongoing employment with the Usry dealership violates the non-competition clause in Section 11.11 of the APA, which states:

(a) As a material inducement to the Buyer’s execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, each of the Sellers agrees not to directly or indirectly engage in, or have any ownership interest in any firm, corporation, partnership, proprietorship or other entity that engages (directly or indirectly) in any activities which are the same as, or in competition with, the business and activities carried on by the Buyer or its Affiliates or being planned by the Buyer or its Affiliates on the Closing Date, within a fifty (50) mile radius of the Dealership’s location at 201 Octavia Drive, Brandon, Mississippi ...
(d) The ... restrictions set forth in [subsection 11.11(a) ] shall .... in the case of Daniels, continue until the longer of (i) the fifth (5th) anniversary of the Closing Date or (ii) one (1) year from the termination (for any reason) of such Principal’s employment with the Buyer or its Affiliates ...

*775 All parties agree that: (1) the Usry dealership is within fifty miles of Gray-Daniels; (2) Daniels’ business activity with the Usry dealership began within one year of his termination of employment with Gray-Daniels; and (3) Daniels’ activity with the Usry dealership is ongoing.

Based on Daniels’ alleged violation of the non-competition clause in the APA, plaintiffs filed suit in this court on January 18, 2001. Plaintiffs have brought the following causes of action: breach of contract, unfair competition pursuant to both the Lanham Act, Title 15 U.S.C. §§ 1051 et seq. and Mississippi common law; 2 , 3 trademark infringement pursuant to Mississippi common law; interference with contract and business relationships; and unjust enrichment. 4 This court finds that it has jurisdiction pursuant to Title 28 U.S.C. §§ 1331, 5 1332, 6 1338(a) and (b), 7 and 1367(a). 8

*776 II. Standard

Plaintiffs served defendants with their motion for injunctive relief as evidenced by a certificate of service therein [docket no. 3], and this court has held hearings, allowing arguments and presentation of evidence, on four occasions. Because defendants have received notice and all parties have been heard, the court will treat this motion as one for a preliminary injunction.

A preliminary injunction should issue if the movant establishes: (1) a substantial likelihood of success on the merits, (2) a substantial threat of irreparable injury if the injunction is not issued, (3) that the threatened injury if the injunction is denied outweighs any harm that will result if the injunction is granted, and (4) that the grant of an injunction will not disserve the public interest. Janvey v. Alguire, 628 F.3d 164, 174 (5th Cir.2010). The plaintiff bears the burden of establishing each element. Id.

This court has examined the four factors to determine the propriety of issuing a preliminary injunction and finds the factors weigh in favor of issuance. This court emphasizes that its ruling on plaintiffs’ request for preliminary injunctive relief is not to be construed as a determination on the merits of this case.

III. Propriety of an Injunction

A. Substantial Likelihood of Success on the Merits

In order to satisfy the first element, likelihood of success on the merits, plaintiffs must provide evidence sufficient to support a prima facie case, but the evidentiary standard is not as high as would be required to entitle them to summary judgment. Janvey, 628 F.3d at 175 (citation omitted). To assess the likelihood of success on the merits, this court looks to “standards provided by the substantive law.” Id. (citing Roho, Inc. v. Marquis,

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812 F. Supp. 2d 771, 2011 U.S. Dist. LEXIS 93716, 2011 WL 3684529, Counsel Stack Legal Research, https://law.counselstack.com/opinion/asbury-ms-gray-daniels-llc-v-daniels-mssd-2011.