Judge: James C. Chalfant, Case: 24STCV17691, Date: 2024-10-17 Tentative Ruling

Case Number: 24STCV17691    Hearing Date: October 17, 2024    Dept: 85

Plaintiff Tanish Inc. (“Tanish”) applies for a preliminary injunction to enjoin Defendants Edvin Eliazian (“Eliazian”), Rita Zakarian (“Zakarian”), Cool Wave HVAC Products Inc. (“Cool Wave”), and Ararat Fallah (“’Fallah”) from selling linear air diffusers that use any parts or designs belonging to Tanish.

            The court has read and considered the moving papers, opposition,[1] and reply and renders the following tentative decision.

            A. Statement of the Case

            1. The Complaint

            Plaintiff filed the Complaint on July 16, 2024, alleging (1) Conversion, (2) Violation of California Uniform Trade Secrets Act, (3) Misappropriation, (4) Fraudulent Concealment, (5) Intentional Interference of Prospective Economic Advantage, (6) Negligent Interference of Prospective Economic Advantage, (7) Intentional Misrepresentation, (8) Negligent Misrepresentation, (9) Negligence, (10) Violation of Business and Professions Code, and (11) Conspiracy.  The Complaint alleges in pertinent part as follows.

            Tanish is a California corporation that manufactures products for air conditioning vents, in particular, linear diffusers.  Tanish sells these products to vendors, who then sell them to contractors.  Tanish has it own designs that are unique to the products they manufacture.

            In 2011, Tanish hired Eliazian who eventually became a shop foreman and production manager.  In early 2023, Eliazian established Cool Wave.  Cool Wave’s California Secretary of State filings list Zakarian as the Chief Financial Officer and Eliazian as the Chief Executive Officer.  

Eliazian quit working for Tanish in late 2023.  Shortly following Eliazian’s departure from Tanish, Tanish learned that 60,000 springs, 46,000 clips, and several tools had gone missing (collectively, “Missing Items”).  Tanish alleges that Eliazian took advantage of his position to scheme with other Defendants in order to steal proprietary information, intellectual property, and tens of thousands of dollars’ worth of products, including unique specialty parts.  Tanish’s supplier in China informed it that Eliazian reached out to order Tanish’s unique specialty parts soon after leaving Tanish.  As a result, Tanish has lost a number of major customers and significant revenue.  

            Tanish seeks compensatory, punitive, and consequential damages with pre- and post-judgment interest, restitution, injunctive relief, as well as attorney’s fees and costs.

            2. Course of Proceedings

            On July 16, 2024, Tanish served Defendants with the Complaint and summons.

            On August 7, 2024, Tanish amended the Complaint substituting the true name, Ararat Fallah, for the fictitious name DOE 1.

            On August 22, 2022, the court heard Tanish’s ex parte application for a temporary restraining order (“TRO” and order to show cause re: preliminary injunction (“OSC”) to enjoin Defendants from (1) selling linear air diffusers that use any parts or designs belonging to Tanish; (2) developing, manufacturing, or producing any items based off Tanish’s designs or unique parts that make up Tanish’s linear air diffusers; (3) disclosing Tanish’s proprietary information to third parties; and (4) soliciting Tanish’s current customers. 

The court granted Tanish’s application in part, temporarily enjoining Defendants from selling linear air diffusers that use any parts or designs belonging to Tanish and setting an OSC to that effect for September 12, 2024.  The court ordered Tanish to serve Defendants with the TRO/OSC and to file a proof of service by August 28, 2024.   Proof of service was filed on August 28, 2024.

At the September 12, 2024 OSC, Defendants’ counsel indicated that he had been recently retained and sought a continuance.  He further indicated that Defendants would agree to cease sale of the items in dispute until the continued hearing date.  His request was granted and the hearing was continued to the instant date with the cessation of sale condition imposed.

            B. Applicable Law

            An injunction is a writ or order requiring a person to refrain from a particular act; it may be granted by the court in which the action is brought, or by a judge thereof; and when granted by a judge, it may be enforced as an order of the court.  Code of Civil Procedure (“CCP”) §525.  An injunction may be more completely defined as a writ or order commanding a person either to perform or to refrain from performing a particular act.  See Comfort v. Comfort, (1941) 17 Cal.2d 736, 741. McDowell v. Watson, (1997) 59 Cal.App.4th 1155, 1160.[2]  It is an equitable remedy available generally in the protection or to prevent the invasion of a legal right.  Meridian, Ltd. v. City and County of San Francisco, et al., (1939) 13 Cal.2d 424.

            The purpose of a preliminary injunction is to preserve the status quo pending final resolution upon a trial.  See Scaringe v. J.C.C. Enterprises, Inc., (1988) 205 Cal.App.3d 1536. Grothe v. Cortlandt Corp., (1992) 11 Cal.App.4th 1313, 1316; Major v. Miraverde Homeowners Assn., (1992) 7 Cal.App.4th 618, 623.  The status quo has been defined to mean the last actual peaceable, uncontested status which preceded the pending controversy.  Voorhies v. Greene (1983) 139 Cal.App.3d 989, 995, quoting United Railroads v. Superior Court, (1916) 172 Cal. 80, 87. 14859 Moorpark Homeowner’s Assn. v. VRT Corp., (1998) 63 Cal.App.4th 1396. 1402.

            A preliminary injunction is issued after hearing on a noticed motion.  The complaint normally must plead injunctive relief.  CCP §526(a)(1)-(2).[3]  Preliminary injunctive relief requires the use of competent evidence to create a sufficient factual showing on the grounds for relief.  See e.g. Ancora-Citronelle Corp. v. Green, (1974) 41 Cal.App.3d 146, 150.  Injunctive relief may be granted based on a verified complaint only if it contains sufficient evidentiary, not ultimate, facts.  See CCP §527(a).  For this reason, a pleading alone rarely suffices.  Weil & Brown, California Procedure Before Trial, 9:579, 9(ll)-21 (The Rutter Group 2007).  The burden of proof is on the plaintiff as moving party.  O’Connell v. Superior Court, (2006) 141 Cal.App.4th 1452, 1481.

            A plaintiff seeking injunctive relief must show the absence of an adequate damages remedy at law.  CCP §526(4); Thayer Plymouth Center, Inc. v. Chrysler Motors, (1967) 255 Cal.App.2d 300, 307; Department of Fish & Game v. Anderson-Cottonwood Irrigation Dist., (1992) 8 Cal.App.4th 1554, 1565.  The concept of “inadequacy of the legal remedy” or “inadequacy of damages” dates from the time of the early courts of chancery, the idea being that an injunction is an unusual or extraordinary equitable remedy which will not be granted if the remedy at law (usually damages) will adequately compensate the injured plaintiff.  Department of Fish & Game v. Anderson-Cottonwood Irrigation Dist., (1992) 8 Cal.App.4th 1554, 1565.

            In determining whether to issue a preliminary injunction, the trial court considers two factors: (1) the reasonable probability that the plaintiff will prevail on the merits at trial (CCP §526(a)(1)), and (2) a balancing of the “irreparable harm” that the plaintiff is likely to sustain if the injunction is denied as compared to the harm that the defendant is likely to suffer if the court grants a preliminary injunction.  CCP §526(a)(2); 14859 Moorpark Homeowner’s Assn. v. VRT Corp., (1998) 63 Cal.App.4th 1396. 1402; Pillsbury, Madison & Sutro v. Schectman, (1997) 55 Cal.App.4th 1279, 1283; Davenport v. Blue Cross of California, (1997) 52 Cal.App.4th 435, 446; Abrams v. St. Johns Hospital, (1994) 25 Cal.App.4th 628, 636.  Thus, a preliminary injunction may not issue without some showing of potential entitlement to such relief.  Doe v. Wilson, (1997) 57 Cal.App.4th 296, 304.  The decision to grant a preliminary injunction generally lies within the sound discretion of the trial court and will not be disturbed on appeal absent an abuse of discretion.  Thornton v. Carlson, (1992) 4 Cal.App.4th 1249, 1255.

            A preliminary injunction ordinarily cannot take effect unless and until the plaintiff provides an undertaking for damages which the enjoined defendant may sustain by reason of the injunction if the court finally decides that the plaintiff was not entitled to the injunction.  See CCP §529(a); City of South San Francisco v. Cypress Lawn Cemetery Assn., (1992) 11 Cal.App.4th 916, 920.

            C. Statement of Facts[4]

            1. Plaintiff’s Evidence

            Tanish was established in 2011.  Manasians Decl., ¶3; Abramian Decl., ¶3.  Following the establishment of Tanish, Eliazian was hired around the same time.  Abramian Decl., ¶3; Manasians Decl., ¶3.  Eliazian was a trusted employee who eventually worked his way up to become a shop foreman and productions manager.  Abramian Decl., ¶5.  

In late 2023, Eliazian informed Tanish that he planned on leaving.  Abramian Decl., ¶6.  Eliazian’s last day of employment with Tanish was December 31, 2023.  Abramian Decl., ¶7.

            Tanish first became aware of Cool Wave in or around March 8, 2024, after receiving an email from Tanish’s vendor in China, DongGuan TopsMachinery Hardware Co. (“TopsMachinery”).  Abramian Decl., ¶8.  TopsMachinery is a vendor in China which manufactures some of Tanish’s unique specialty parts used to produce their linear air diffusers.  Abramian Decl., ¶¶ 4, 8, Ex. A.  TopsMachinery sells specific springs to Tanish and has been doing so for approximately three years.  Cai Decl., ¶4.  TopsMachinery makes these springs specifically for Tanish and no other company purchases these exact springs with the same specifications.  Cai Decl., ¶5.  On March 8, 2024, TopsMachinery received an email from Eliazian requesting a quote for the springs made specifically for Tanish so that Cool Wave could purchase 50,000 of each. Cai Decl., ¶7.

TopsMachinery informed Tanish that Eliazian, on behalf of Cool Wave, had attempted to order the exact springs produced for Tanish.  Abramian Decl., ¶8; Cai Decl., ¶8.  The attempted order sent by Eliazian included a photo of Tanish’s proprietary property outlining specifications and designs for one of Tanish’s specialty parts.  Abramian Decl., ¶8.  This proprietary paper was not accessible to Tanish’s employees and was always kept under lock and key.  Abramian Decl., ¶9.  Eliazian was not given access to the document.  Abramian Decl., ¶9.

In early 2024, Tanish’s Secretary, Ani Abramian (“Abramian”), and other Tanish employees reviewed Tanish’s inventory and discovered that Tanish was missing approximately 60,000 springs, 46,000 clips, 2,500 endcaps, and several tools (the “Missing Items”).  Abramian Decl., ¶10.  Tanish is of the belief that Eliazian took the Missing Items.  Abramian Decl., ¶10.  The belief is based on Cool Wave selling linear air diffusers with those exact same Missing Items and TopsMachinery, the producer of the Missing Items, refusing to fulfill Cool Wave’s order.  Abramian Decl., ¶10.  

United Sheet Metal, a long-time Tanish customer, was approached by Eliazian on June 24, 2024, regarding potential business.  Azizkhani Decl., ¶¶ 1-4.  Eliazian represented to United Sheet Metal that he had good prices, provided a price list, and stated that he would fulfill any order at prices cheaper than Tanish’s.  Azizkhani Decl., ¶4, Ex. A.

Valmont Coatings—George Industries (“Valmont Coatings”) is a vendor for Tanish.  Reed Decl., ¶3.  Valmont Coatings provides anodizing for Tanish’s unique extrusion products – anodizing is a process that creates a specific finish on metal surfaces.  Reed Decl., ¶3.   Valmont Coatings has provided anodizing for Tarnish’s extrusion products since 2016.  Reed Decl., ¶5.

Between February and March 2024, Valmont Coatings received a request from Eliazian for Valmont Coatings to quote prices on anodizing Cool Wave parts he provided.  Reed Decl., ¶6.  These were the same unique extrusion products that Tanish orders for anodizing from Valmont Coatings.  Reed Decl., ¶7.  Tanish informed Valmont Coatings that Eliazian no longer worked for Tanish.  Reed Decl., ¶7.  Valmont Coatings’ operations manager compared the parts Eliazian provided with the specifications for Tanish’s unique design and concluded the parts were identical.   Reed Decl., ¶8.  On March 19, 2024, he returned the parts to Eliazian and refused to provide anodizing services to him or Cool Wave.  Reed Decl., ¶9. 

Tanish has lost numerous, long-time customers since Eliazian left the company, including Icon Sheet Metal and A/C Supply (“Icon”).  Abramian Decl., ¶11.  As a result, Tanish has suffered and was forced to lower prices in order to compete with Cool Wave.  Abramian Decl., ¶11.

2. Defendants’ Evidence

Eliazian is the founder of Cool Wave.  Eliazian Decl., ¶4.  Prior to commencing business operations for Cool Wave, he was a Tanish employee.  Eliazian Decl., ¶4.  At Tanish, Eliazian worked around the clock and was subject to years of abuse while being obligated to endure a hostile environment.  Eliazian Decl., ¶5.  After immense consideration and deliberation, Eliazian determined the best course of action to end his employment with Tanish.  Eliazian Decl., ¶6. 

Upon leaving Tanish, Eliazian did not remove any parts from their facility or any alleged tools.  Eliazian Decl., ¶7.  It would be impossible to remove the quantity of parts Tanish alleges without being noticed or without the drop in inventory being noticed immediately.  Eliazian Decl., ¶7.  Additionally, Eliazian is not selling the alleged stolen items.  Eliazian Decl., ¶8. 

Eliazian is still engaged in the heating and air conditioning industry and is working to design and manufacture products which lead the industry in innovation and design.  Eliazian Decl., ¶9.  His products are designed and manufactured by him and are noticeably distinguishable from the products Tanish sets into commerce.  Eliazian Decl., ¶9. 

The clips for linear air diffusers do not hold any special characteristics, do not have a special or unique design, size, curvature, or spring load rate.  Eliazian Decl., ¶12.  The springs and clips are utilized to hold the diffusers’ internal mechanisms in place and promote functionality.  Eliazian Decl., ¶13.  Each and every diffuser utilizes the same design concept.  Eliazian Decl., ¶13.

            Icon Sheet Metal and A/C Supply (“Icon”) ceased doing business with Tanish due to their lack of customer service and long delays in satisfying orders.  Hagopian Decl., ¶4.  Eliazian and Cool Wave did not solicit business from Icon, nor did they promise anything in return for business.  Hagopian Decl., ¶5.  Icon sought out Eliazian after dissatisfaction with Tanish.  Hagopian Decl., ¶5. 

            3. Reply Evidence

Eliazian was responsible for the parts inventory in his role at Tanish.  Manasians Supp. Decl., ¶6.  During his employment, he did not report any missing parts.  Manasians Supp. Decl., ¶6.  Eliazian also had enough independence to be able to take the boxes without raising suspicion.  Manasians Supp. Decl., ¶6.  Tanish has a large warehouse that has over hundreds of these boxes, thus they would not have noticed the drop in inventory immediately.  Manasians Supp. Decl., ¶7.

The springs and clips are relatively small.  Manasians Supp. Decl., ¶4.  The springs are stored in quantities of over 8,000 per box.  Manasians Supp. Decl., ¶4.  Each box weighs approximately 37.5 pounds and measures just 15 inches by 10 inches by 10 inches.  Manasians Supp. Decl., ¶4.  Accordingly, 60,000 springs can be packed into 8 boxes, making it easy to store and transport in a standard car.  Manasians Supp. Decl., ¶5. 

Tanish has never experienced any break-ins or stolen items prior to this incident.  Manasians Supp. Decl., ¶8.  There are far more valuable items that could have been stolen if the culprit wanted to quickly make money.  Manasians Supp. Decl., ¶8.  Instead, it was someone who knew the value of the parts, knew exactly how to use them, and was able to put them to use.  Manasians Supp. Decl., ¶8. 

On or around March 8, 2024, I received an email from Tom Glander (“Mr. Glander”) of DongGuan TopsMachinery Hardware Co., Ltd (“TopsMachinery”) demonstrating that Defendant Edvin Eliazian was attempting to purchase Tanish’s specialty parts based on Tanish’s proprietary designs. Abramian Decl., ¶3, Ex. A.

            D. Analysis

Tanish seeks a preliminary injunction to enjoin Defendants Eliazian, Zakarian, Cool Wave, and Fallah from selling linear air diffusers that use any parts or designs belonging to Tanish.

1. Probability of Success

Tanish’s evidence shows that In early 2024, Tanish reviewed Tanish’s inventory and discovered that Tanish was missing approximately 60,000 springs, 46,000 clips, 2,500 endcaps, and several tools.  Abramian Decl., ¶10. 

On March 8, 2024, Tanish’s vendor in China, TopsMachinery, which makes springs specifically for Tanish, received an email from Eliazian requesting a quote to manufacture 50,000 of the very springs made for Tanish.  Cai Decl., ¶¶ 5, 7. The attempted order sent by Eliazian included a photo of Tanish’s proprietary property outlining specifications and designs for one of Tanish’s specialty parts.  Abramian Decl., ¶8.  This proprietary paper was not accessible to Tanish’s employees, including Elliazian, and was always kept under lock and key.  Abramian Decl., ¶9. 

Between February and March 2024, Tanish’s vendor Valmont Coatings – which provides anodizing for Tanish’s unique extrusion products -- received a request from Eliazian for Valmont Coatings to quote prices to anodize Cool Wave parts he provided.  Reed Decl., ¶6.  Valmont Coatings’ operations manager compared the parts Eliazian provided with the specifications for Tanish’s unique design and concluded the parts were identical.   Reed Decl., ¶8.  On March 19, 2024, he returned the parts to Eliazian and refused to provide anodizing services to him or Cool Wave.  Reed Decl., ¶9. 

On June 24, 2025, United Sheet Metal, a long-time Tanish customer, was approached by Eliazian on June 24, 2024, regarding potential business.  Azizkhani Decl., ¶¶ 1-4.  Eliazian represented to United Sheet Metal that he had good prices, provided a price list, and stated that he would fulfill any order at prices cheaper than Tanish’s.  Azizkhani Decl., ¶4, Ex. A.

            This evidence creates the implication that Eliazian converted Tanish’s unique parts and wanted Valmont Coatings to anodize them for purposes of selling them to parties like United Sheet Metal.  He also wanted TopsMachinery to make springs by using Tanish’s proprietary specifications.

Eliazian contends that he was poorly treated at Tanish and left to found Cool Wave.  Eliazian Decl., ¶¶ 4-5.  He denies removing any parts from Tanish’s facility or any alleged tools.  Eliazian Decl., ¶7.  He contends that it would be impossible to remove the quantity of parts Tanish alleges without being noticed or without the drop in inventory being noticed immediately.  Eliazian Decl., ¶7. 

Eliazian acknowledges that he is still engaged in the heating and air conditioning industry and is working to design and manufacture products which lead the industry in innovation and design.  Eliazian Decl., ¶9.  His products are designed and manufactured by him and are noticeably distinguishable from the products Tanish sets into commerce.  Eliazian Decl., ¶9. 

Eliazian further contends that the clips for linear air diffusers do not hold any special characteristics, do not have a special or unique design, size, curvature, or spring load rate.  Eliazian Decl., ¶12.  The springs and clips are utilized to hold the diffusers’ internal mechanisms in place and promote functionality.  Eliazian Decl., ¶13.  Each and every diffuser utilizes the same design concept.  Eliazian Decl., ¶13.

This evidence does not overcome Tanish’s showing.   It may be true that the springs and clips for linear air diffusers have no special characteristics, but Eliazian does not rebut that Tanish’s evidence that its springs are unique.  He does not explain why he tried to buy 50,000 of the springs TopsMachinery makes for Tanish, using a photo of Tanish’s proprietary property outlining specifications and designs for a Tanish specialty part.  Nor does he explain how he could provide Valmont Coatings’ operations manager with parts that were identical to Tanish’s unique design. 

Defendants argue that Abramian’s declaration contains unreliable statements – sometimes on information and belief – fails to attach the email received by TopsMachinery, and falsely accuses Eliazian of stealing a truckload of parts and tools without evidence.  Speculation and conjecture are not reliable evidence.  Opp. at 4-6, 7-8.

In reply, Tanish adds to its conclusion that Eliazian took the parts with evidence that he was responsible for the parts inventory in his role at Tanish and could have taken the boxes without raising suspicion.  Manasians Supp. Decl., ¶6.  The springs and clips are relatively small, the springs are stored in quantities of over 8,000 per box, and each box weighs approximately 37.5 pounds.  Manasians Supp. Decl., ¶4.  Accordingly, 60,000 springs can be packed into 8 boxes, and easily transported in a standard car.  Manasians Supp. Decl., ¶5.  Eliazian had sufficient independence to be able to take the boxes without raising suspicion.  Manasians Supp. Decl., ¶6.  Tanish has a large warehouse that has over hundreds of these boxes and would not have noticed the drop in inventory immediately.  Manasians Supp. Decl., ¶7.

The court agrees that Tanish’s evidence is not overwhelming, and the evidence of theft is weak.  But the evidence of Tanish’s vendors is not weak and Tanish has shown a probability of success. 

2. Balancing of Harms

In determining whether to issue a preliminary injunction, the second factor which a trial court examines is the interim harm that plaintiff is likely to sustain if the injunction is denied as compared to the harm that the defendant is likely to suffer if the court grants a preliminary injunction.  Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach, (2014) 232 Cal.App.4th 1171, 1177.  This factor involves consideration of the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving the status quo.  Id.

Tanish has lost numerous, long-time customers since Eliazian left the company, including Icon.  Abramian Decl., ¶11.  As a result, Tanish has suffered and was forced to lower prices in order to compete with Cool Wave.  Abramian Decl., ¶11.

Defendants rebut the suggestion that Tanish lost Icon because of them.  Icon ceased doing business with Tanish due to their lack of customer service and long delays in satisfying orders.  Hagopian Decl., ¶4.  Eliazian and Cool Wave did not solicit business from Icon, nor did they promise anything in return for business.  Hagopian Decl., ¶5.  Icon sought out Eliazian after dissatisfaction with Tanish.  Hagopian Decl., ¶5. 

Despite this fact, the balance of harms works in Tanish’s favor.  It has lost business and there is the threat of greater loss through the sale of stolen or misappropriated property.  Defendants will suffer no loss except the burden of identifying Tanish’s products.

E. Conclusion

The  application for a preliminary injunction is granted.  Defendants will be enjoined from selling linear air diffusers that use any parts or designs belonging to Tanish.

A bond is required for a preliminary injunction.  The purpose of a bond is to cover the defendant’s damages from an improvidently issued injunction.  CCP §529(a).  In setting the bond, the court must assume that the preliminary injunction was wrongly issued.  Abba Rubber Co. v. Seaquist, (“Abba”) (1991) 235 Cal.App.3d 1, 15.  The attorney’s fees necessary to successfully procure a final decision dissolving the injunction also are damages that should be included in setting the bond.  Id. at 15-16.  While Abba reasoned that the plaintiff’s likelihood of prevailing is irrelevant to setting the bond, a more recent case disagreed, stating that the greater the likelihood of the plaintiff prevailing, the less likely the preliminary injunction will have been wrongly issued, and that is a relevant factor for setting the bond.  Oiye v. Fox, (2012) 211 Cal.App.4^th 1036, 1062.  The court will discuss the matter of a bond with the parties at the hearing.