Euro-Cut, Inc. v. Futersak

476 F. Supp. 2d 218, 2007 U.S. Dist. LEXIS 17891, 2007 WL 666162
CourtDistrict Court, E.D. New York
DecidedJanuary 31, 2007
DocketCV 06-2219
StatusPublished
Cited by1 cases

This text of 476 F. Supp. 2d 218 (Euro-Cut, Inc. v. Futersak) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Euro-Cut, Inc. v. Futersak, 476 F. Supp. 2d 218, 2007 U.S. Dist. LEXIS 17891, 2007 WL 666162 (E.D.N.Y. 2007).

Opinion

MEMORANDUM AND ORDER

WEXLER, District Judge.

Plaintiff Euro-Cut, Inc. (“Euro-Cut”) brings this diversity action against defendants Meyer Futersak (“Futersak”) and Marketrend, Ltd. (“Marketrend”), a company Futersak owns and controls, asserting various contract and tort claims arising from Futersak’s alleged violation of an employment agreement with Euro-Cut. Euro-Cut moves for a preliminary injunction. For the reasons below, the motion is denied.

I. BACKGROUND

The relevant background, as shown by the record, including three days of testimony, can be summarized as follows:

A. The Parties

Euro-Cut is a New Jersey corporation that sells ready-to-eat shelf-stable kosher meals and self-heating shelf-stable kosher meals. Abe Halberstam (“Halberstam”) is Euro-Cut’s chief executive officer and president.

Futersak is a New York domiciliary, residing in Nassau County, New York. Marketrend is a New York corporation, through which Futersak sells shelf-stable meals.

B. Shelf-Stable Meals

Shelf-stable meals have a 24-month shelf life, making them suitable for use by the military and by various emergency relief agencies, such as the American Red Cross (“Red Cross”). Halberstam formed the idea of making “kosher” shelf-stable meals in 1999 after attending a Y2K conference. Euro-Cut began selling such meals in 2002 to various independent stores and distributors, kicking off those sales at “Kosher Fest 2002” — an industry trade show. Euro-Cut produces meals that are “glatt” kosher, a strict or high level of kosher food.

In 2002 or 2003, Halberstam met with William Beatty (“Beatty”) of the Red Cross regarding the Red Cross’s need for *220 shelf-stable meals. Euro-Cut made its first sale of kosher meals to the Red Cross in 2004. . ■

Kosher shelf-stable meals are more expensive to produce than comparable non-kosher meals. In addition, • shelf-stable meals containing items other than just an entree are more expensive than meals with solely an entree. Non-kosher shelf-stable meals that are not self-heating are priced between $2.00 and $3.00 at retail establishments, while the self-heating variety are priced between $3.00 and $4.00. By comparison, kosher shelf-stable meals that are not self-heating are priced between $3.50 and $3.99, while the self-heating variety are priced between $4.50 and $4.99. Euro-Cut sold kosher self-heating shelf-stable meals to the Red Cross for $5.00 per meal.

C. Futersak’s Employment With Euro-Cut and the Employment Agreement

In April 2004, Euro-Cut hired Futersak to act as director of marketing and sales. EuroCut paid Futersak a salary of $10,000 per month. Futersak worked from his home in Cedarhurst, New York, visiting Euro-Cut’s New Jersey office approximately every other month. Given his position, Euro-Cut maintains, Futersak was exposed to certain proprietary information about Euro-Cut’s customers, including pricing structure, past ordering history, and contact information, which he agreed to hold in strict confidence.

After one year, Euro-Cut purportedly became dissatisfied with Futersak for his failure to generate sufficient sales. As a result, in April 2005, the parties executed a written “Employment Agreement,” drafted by an attorney for Euro-Cut, which reduced Futersak’s salary to $5,000 per month and 3% commission on all sales upon presentation of a purchase order (the “Agreement”). The Agreement contains the following restrictive covenant:

Employee agrees not to solicit or attempt to take business away from Employer so long as Employee remains in the employ of Employer and for twenty four (24) months thereafter. [Emphasis omitted.]
Employer acknowledges that Employee may have secured a client base prior to Employee’s employment with Employer. As such, upon the termination of Employee’s employment with Employer and for a period of twenty four (24) months thereafter, Employee may utilize said client base in connection with the marketing and sales of products other than the type that Employer produces.

Hearing Exhibit Binder (“Hearing Ex.”), Ex. 4. The Agreement further provides that-it “shall be governed and construed in accordance with the laws of the State of New Jersey.” Id. Halberstam claims that Euro-Cut chose New Jersey law because “we knew that the State of New Jersey has more stringent kosher laws and our office is in the State of New Jersey.” Supplemental Transcript and Exhibit Binder (“Supp.Ex.”), Ex. B, at 159.

After. Futersak purportedly failed to increase sales, he was terminated in October or November ‘2005. Pursuant to the Agreement, Futersak was paid through December 2005.

D. The Disputed Transaction Between Defendants and the Red Cross

In January 2006, Futersak contacted Brittney Dupuy (“Dupuy”) at the Red Cross to solicit the sale of meals on defendants’ behalf. From this contact, defendants eventually contracted to sell the Red Cross 250,000 self-heating shelf-stable meals in or about March 2006 (the “disputed transaction”). The disputed transaction triggered the present action.

Initially, neither party called a Red Cross official to. testify at the hearing. *221 However, given the Red Cross’s involvement in the disputed transaction, the Court directed that a Red Cross representative be called as a witness. To this end, the Red Cross arranged for Dupuy to testify.

According to Dupuy, when Futersak contacted her in January 2006, she believed he was no longer working for Euro-Cut, but she assumed he was going to sell the Red Cross kosher meals. In response to Futersak’s solicitation, Dupuy contacted Red Cross vice-president Armand Mascelli for permission to spend money on the meals. However, Futersak did not specify to Dupuy whether he 'was selling kosher meals or non-kosher meals. Rather, he advised her, in a February 6, 2006 e-mail, that his company, Marketrend, “will be supplying the meals like last year.” Hearing Ex. 6. That e-mail, according to Dupuy, corrected an error she made, namely, she inadvertently sent Futersak a procurement document entitled “Procedures for Accessing LaBriute,” a reference to Euro-Cut. Futersak clarified that Marketrend was the supplier, and Dupuy corrected the form to read, “Procedures for Accessing Marketrend Products.” Hearing Ex. 7. Still, Futersak did not indicate whether he was selling kosher meals or non-kosher meals. In any event, Dupuy eventually arranged for the Red Cross to purchase 250,000 self-heating shelf-stable meals from Futersak and Marketrend- at $5.00 per meal, as per a purchase order dated February 15, 2006 and signed February 23, 2006. Hearing Ex. 8. As reflected in that purchase order, Dupuy and other Red Cross officials believed, at that time, that the Red Cross was purchasing kosher meals. Id.

Meanwhile, Halberstam learned from Tim Zimmerman of Heater Meals — a Red Cross non-kosher meal supplier — that the Red Cross would be seeking to purchase 250,000 kosher meals from Euro-Cut within a week or ten days.

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Bluebook (online)
476 F. Supp. 2d 218, 2007 U.S. Dist. LEXIS 17891, 2007 WL 666162, Counsel Stack Legal Research, https://law.counselstack.com/opinion/euro-cut-inc-v-futersak-nyed-2007.