USI Insurance Services LLC v. Wright

Background

USI Insurance Services LLC asked for a temporary restraining order and an order requiring Kenneth Dixon Wright to show why a preliminary injunction should not be issued. USI sought to restrict Wright from soliciting or contacting USI clients, competing with USI, soliciting USI employees, assisting others in competing, or working for a competing business. USI relied on non-solicitation and non-compete covenants in an April 2009 purchase agreement connected to the sale of Cailindsey Partnership. The agreement stated that the restrictions applied for two years after Wright’s termination at USI and covered specified activities throughout California.

Legal standard

The court explained that a temporary restraining order is governed by the same general standards as a preliminary injunction. A party seeking this extraordinary relief must show that it is likely to succeed on the merits, likely to suffer harm that cannot be adequately repaired without an order, that the balance of hardships favors it, and that an injunction would serve the public interest. The court focused on USI’s failure to establish a likelihood of success based on the evidentiary record.

Evidence and ruling

USI asserted that Wright had solicited JA Solar, a longtime USI client, for Wright’s company, SRC. But USI did not show what Wright actually did to solicit JA Solar, did not rule out that JA Solar moved voluntarily, and did not provide a foundation for its assertion that Wright controlled SRC.

USI also asserted that Wright solicited Arntz Builders, Inc. The only evidence was a letter stating that Arntz Builders had changed brokers. The court found no clear connection to Wright and said the evidence did not show that Arntz Builders had not made the change voluntarily. USI further asserted that Wright had said he would solicit USI clients and was working to move USI employee Stacy Clinton to SRC, but USI did not provide the referenced correspondence. The court also noted that there was no indication that Clinton had not resigned and joined SRC voluntarily.

Judge Yvonne Rogers denied USI’s application for a temporary restraining order and order to show cause because USI had not established a likelihood of success on the evidence submitted. The order terminated Docket Number 8.