Crestmark v. Teleescrow, Inc.
- Lorna Schofield
- 1:22-cv-00385
- U.S. District Court · Southern District of New York
- 3
In Crestmark v. Teleescrow, Judge Schofield granted Crestmark’s preliminary injunction, barring Teleescrow from moving or dissipating $5,018,781.41 during the case.
Teleescrow, Inc. is barred from accessing, moving, interfering with, or dissipating the specified funds and from taking similar actions involving Crestmark’s funds during the lawsuit. Crestmark must maintain the $5,000 security required by the court.
What happened
In Crestmark v. Teleescrow, Inc., Crestmark asked the court to prevent Teleescrow from accessing, moving, interfering with, or dissipating $5,018,781.41 held in a specified account. The court had previously issued a temporary order protecting the funds while it considered the request for a longer-lasting injunction.
Teleescrow did not file opposition papers and stated during the January 26, 2022, telephone hearing that it did not oppose Crestmark’s application. The court found that Crestmark showed a risk of irreparable harm, sufficiently serious questions about its breach-of-contract and conversion claims, and that the hardships favored Crestmark.
Judge Lorna G. Schofield granted the application and ordered Teleescrow, while the lawsuit continues, not to access, move, interfere with, or dissipate the funds or take similar actions involving Crestmark’s funds at the named banks or any other banking institution.
The detailed version
- Crestmark v. Teleescrow, Inc. · No. 1:22-cv-00385
- Lorna Schofield
- Jan. 26, 2022
Background
Crestmark, a division of MetaBank, N.A., filed a lawsuit against Teleescrow, Inc., asserting breach-of-contract and conversion claims. Crestmark sought a preliminary injunction—a court order preserving the situation while the lawsuit proceeds—to prevent Teleescrow from accessing, moving, interfering with, or dissipating $5,018,781.41 that Teleescrow had identified as being held in Account No. 175306588.
On January 18, 2022, the court issued a temporary restraining order protecting the funds pending a hearing on the preliminary injunction. The court also required Crestmark to post $5,000 in security, which Crestmark timely posted. Teleescrow was ordered to submit any opposition papers and to appear at a telephone hearing on January 26, 2022. Teleescrow filed no opposition and stated at the hearing that it did not oppose the application.
Court’s Analysis
The court granted Crestmark’s application under Federal Rule of Civil Procedure 65(a). The court found that Crestmark had shown it would suffer irreparable harm without an injunction, that there were sufficiently serious questions about the merits of its breach-of-contract and conversion claims to warrant litigation, and that the balance of hardships strongly favored Crestmark. The opinion does not finally decide whether Crestmark will prevail on those underlying claims.
Order
The court ordered that, during the pendency of the action, Teleescrow is restrained and enjoined from accessing, moving, interfering with, or dissipating the $5,018,781.41 in Account No. 175306588. Teleescrow is also restrained and enjoined from taking actions involving Crestmark’s funds at Metropolitan Commercial Bank, The Bank of Montreal, or any other banking institution that would have the effect of accessing, moving, interfering with, or dissipating those funds.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.