JLM Couture, Inc. v. Gutman

Background

JLM Couture and Hayley Paige Gutman were parties to an employment contract that provided for base compensation and additional compensation tied to sales of certain product lines. Gutman announced her resignation from JLM on December 17, 2020. She argued that JLM later breached the contract by failing to pay additional compensation that she claimed was due in 2021 and 2022.

The court had issued preliminary injunctive relief on March 4, 2021. A preliminary injunction is a court order entered before final judgment that requires or prohibits specified conduct while the case continues. In June 2021, the court denied Gutman’s earlier motion to dissolve the injunction. The court concluded that her failure to continue performing services meant she had not shown that JLM breached its compensation obligations or that JLM had lost the right to seek enforcement of the contract’s restrictive provisions. The Second Circuit later affirmed that decision at this stage, stating that faithful performance was a condition for payment and that JLM had no duty to pay Gutman if she did not work.

Gutman’s Motion to Dissolve

Gutman’s 2022 motion again argued that JLM’s failure to pay additional compensation was a material breach that required dissolving the preliminary injunction. The court treated the motion as one seeking reconsideration of its June 2021 decision because it raised the same argument.

Under the applicable court rule, a motion for reconsideration had to be served within 14 days after the original decision. Gutman filed her motion more than a year after the June 2021 decision, which was enough to deny it. The court also explained that reconsideration is an exceptional remedy available only for an intervening change in controlling law, newly available evidence, or a need to correct a clear legal error or prevent serious unfairness.

The court found that Gutman identified no controlling authority or evidence the court had overlooked. It determined that she was attempting to relitigate an issue already considered and rejected. The evidence she submitted was also not genuinely new because it had been available when she filed her earlier motion. The court further rejected her argument that the alleged 2022 missed payment independently changed the circumstances, explaining that JLM’s position that it did not owe additional compensation after Gutman stopped working had remained the same.

The court also declined to reconsider its earlier analysis of the balance of hardships and the public interest because those matters had already been considered when the injunction was issued and later modified.

Motion for Clarification

Gutman separately asked the court to clarify that the preliminary injunction required JLM to transfer the @misshayleypaige Pinterest and Instagram accounts to her, and to provide necessary assistance, by August 1, 2022. The court denied that request. It stated that it would address the parties’ obligations after August 1, 2022, concerning the injunction’s subject matter in connection with JLM’s pending motion to modify the injunction.

Disposition

Judge Laura Taylor Swain denied in its entirety Gutman’s motion to dissolve the Preliminary Injunction Order and also denied in its entirety her motion for clarification. The order resolved docket entry number 351. The preliminary injunction remains in force in all other respects, and the case remains referred to Magistrate Judge Cave for general pretrial management.