1

Ronald Jason Palmieri, State Bar #96953

Robert P. Wargo, State Bar #175177
2 LAW OFFICES OF RONALD JASON PALMIERI
911 Linda Flora Drive
3 Los Angeles, California 90049
Tel: (310)471-1881 FILED
LOS ANGELES SliP/jIUOR COURT
4 Fax: (310)471-3511

5 Attorneys for Plaintiffs ABC Escrow, Inc., MAR 29 2004

and Alcohol Enterprises, Inc.
6 JOfm A. CLARKE, EXEff~'VE OFFICER! CLERK

7 BY J. TOR~S, Dpfji:~),
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA ~ "\
,
9 FOR THE COUNTY OF LOS ANGELES

10 ABC ESCROW, INC., a California corporation; ) CASE NO.: BC312678

ALCOHOL ENTERPRlSES, INC.. a California )
II corporation ) EX PARTE APPLICATION FOR
) TEMPORARY RESTRAINING ORDER
12 Plaintiffs ) AND ORDER TO SHOW CAUSE RE:
) PRELIMINARY INJUNCTION;
13 v. ) MEMORANDUM OF POINTS AND
MICHAEL STEINHAUER, an individual, and ) AUTHORlTIES; DECLARATIONS OF
14 Does I through 10, inclusive ) CRAIG BLOCK AND ROBERT P.
) WARGO (RE: NOTICE OF HEARING)
15 Defendants. )
., DATE: March 29, 2004
16 TIME: 8:30 A.M.
DEPT.: 46
17 Hon. Rodney E. Nelson

18
Plaintiffs ABC Escrow, Inc., and Alcohol Enterprises, Inc., hereby make this Ex Parte
19
Application for Temporary Restraining Order and Order to Show Cause Re: Preliminary Injunction
20
against their former employee, Defendant Michael Steinhauer, who, in retaliation for the lawful
21
ternlination of his at-will employment with Plaintiffs on March 5, 2004, has subsequently
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intentionally interfered with Plaintiffs' prospective economic advantage with one of the~ Ij,)hg'-
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st~ding clients and. unless restrained by this Court, Plaintiffs are informed f~ ~el~w,~h~t; ~
24
D~ndant will continue his tortious course of conduct, to Plaintiffs' irreparable~Yn~ry.S ~ ,r;; ,".' ~~
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flf Accordingly, Plaintiffs seek to enjoin Defendant Michael Steinhauer from communiclliiii:g~ :~
aw;:;,~ ~;
26
wi, calling on, soliciting, taking away, or attempting to communicate, call on. solicit ori:ke
27 ....' . I
either for Defendant, or for any other person, firm, corporation or entity, any of Plaintiffs' c1ieryts,"
28
customers and employees.

Pa e \
EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND osc RE: PRELIMINARY INJUN
'RIGINAL
 I

This Ex Part", Application is based on the upon the instant Application, the Memorandum

2 of Points and Authorities and the Declarations of Craig Block and Robert P. Wargo (Re: Notice of

3 Hearing), and any and all records and pleadings on liIe with this Court in connection with the above-

4 referenced matter.

5
6 Dated: March 29, 2004 NALD JASON PALMIERI
7

8 Robert P. Wargo
Attorneys for Plaintiffs
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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND O$C RE: PRELIM1NARY INJUNCTION

MEMORANDUM OF POINTS AND AUTHORITIES

2 I

3 STATEMENT OF FACTS

4 The facts ofthis case are relatively straightforward and compel the granting ofthe Temporary

5 Restraining Order and Order to Show Cause requested by Plainti tTs herein against Defendant

6 Michael Steinhauer.

7 As set forth in the attached Declaration ofCraig Block, an officer ofboth corporate Plaintiffs,

8 Plaintiffs ABC Escrow, Inc., and Alcohol Enterprises, Inc., are related California corporations

9 qualified to transact business in this state, and are engaged in the business of acting as a third party

10 tinder and providing consulting and escrow services in connection with the sale, purchase and

II transfer of alcoholic beverage licenses in California and throughout the United States. On or about

12 August 20, 200 I, Plaintiffs and Defendant Steinhauer entered into a written Employment Agreement

13 whereby Plaintiffs agreed to employ Defendant as an at will employee in the position of

14 Sales/Customer Service Representative, on the terms and conditions set forth in the Agreement, a

15 copy of which is attached hereto as Exhibit "A."

16 Paragraph 10.4 of the Employment Agreement states that "during his ... employment and

17 for a period of two (2) years following the discharge, resignation or termination of [Defendant] or

18 the termination ofthis Agreement, [Defendant] shall not directly or indirectly use any [of Plaintiffs']

19 Confidential Information to call on, solicit, take away, or attempt to call on, solicit or take away,

20 either for [Defendant] or for any other person, firm, corporation or entity the company's clients,

21 customers and employees." "Confidential Information"~ is defined in Paragraph 10.1 of the

22 Employment Agreement to include: (I) the name, address or telephone number of clients or

23 cq~omers; (2) infornJation obtained trom customers or clients; (3) costs incurred by the Company

24 in~'qui ring licenses; (4) fees charged clients or customers for services; and (5) procedures utilized
25 b' e Company in acquiring licenses on behalf of clients.
"
26 i Paragraph 10.5 of the Employment Agreement states that "no adequate remedy at law may

27 exit for any violation of Sections 10.1-10.4 of this Agreement and that in the case of any breach,

28 a restraining order or injunction may be issued in addition to any other rights or remedies, including

Page 3
EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND osc RE: PRELIMINARY INJUNCTION

damages, which may be appropriate." Paragraph 11.9 ofthe Employment Agreement states that "in

2 the event of any litigation between or among the parties hereto respecting or arising out of this

3 Agreement, the prevailing party or parties shall be entitled to recover reasonable attorneys' fees and

4 costs, whether or not such litigation proceeds to final judgment or determination."

5 Plaintiffs terminated Defendant's employment on March 5, 2004, due to company

6 reorganization. As ofthat date, Defendant Steinhauer knew that Plaintiffs had recently brokered the

7 sale of a liquor license to Safeway, one of Plaintiffs' longtime clients, for the sum of $200,000.

8 Plaintiffs are informed and believe, and thereupon allege, that Defendant Steinhauer also knew that

9 Plaintiffs were then in the midst ofnegotiations with Safeway for the potential sale ofanother liquor

10 license for the sum 01'$210,000, which Plainti ffs would acquire from a potential seller for $120,000.

II On March 11,2004, Defendant Steinhauer twice telephoned Jan Martin, a vice president of

12 Safeway, who was Plaintiffs' principal contact with the company. During the first conversation,

13 Steinhauer identified himself only as "Mike" to Ms. Martin and stated to her that he had a liquor

14 license available for sale to Safeway for the sum of$180,000.

15 Ms. Martin thereafter contacted Craig Block, an officer of both Plaintiffs, and infonned that

16 she had been contacted by someone named "Mike" calling from the 323 area code and offering her

17 the liquor license. Mr. Block suspected that "Mike" was Plaintiffs' recently terminated employee,

18 Defendant Steinhauer, and that the license he was attempting to sell her was a license he was

19 negotiating for from the potent ial seller when he was terminated from his employment by Plaintiffs.

20 Mr. Block requested that Ms. Martin contact "Mike" to make further inquiry regarding his identity

21 and the potential seller.

22 Ms. Martin subsequently spoke with "Mike" and he confirmed to her that he was, in fact,

23 DI/kndant Steinhauer. He thereafter advised Ms. Martin that the reason that he was calling her was

24 so'at Safeway could avoid being "gouged" with respect to this transaction because Plaintiffs always

25 g4ed their clients. This statement was false. and known by Defendant to be false, and had a

26 te~ncy to injure Plaintiffs with respect to their trade or business because the statement imputes

27 di~{)lIesty or a lack of ethics to Plaintiffs.

28 Steinhauer also stated that he would not be making any money from the transaction and that

Page 4
EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND OSC RE: PRELIMINARY INJUNCTION

would have the seller of the license contact Ms. Martin directly. The potential seller contacted Ms.

2 Martin directly, and Safeway and the seller tentatively have entered into an agreement whereby

3 Safeway has agreed to purchase the liquor license directly from the seller for approximately

4 $180,000.00, or approximately $30,000 less than the amount which Safeway tentatively had agreed

5 to pay to Plaintiffs for acquiring the license.

6 Had Defendant Steinhauernot utilized Plaintiffs' confidential infomlation and interfered with

7 Plaintiffs' potential brokering of the sale of this liquor license to Safeway, Plaintifls would have

8 earned approximately $90,000 from the sale. Defendant's wrongful conduct, as set forth above,

9 constituted a breach of his employment contract in that he agreed not "to call on, solicit, take away,

10 or attempt to call on, solicit or take away, either for [Defendant] or for any other person, firm,

II corporation or entity the company's clients, customers and employees."

12 Defendant's wrongful conduct, as set forth hereinabove, has caused Plaintiffs to suffer

13 damages in the amount of $90,000.00, and unless and until enjoined by Order of this Court,

14 Defendant's conduct shall continue to cause irreparable injury to Plaintiffs, including, but not limited

15 to lost profits and damage to its customer goodwill. Plaintiffs are further informed and believe, and

16 thereon allege, that Defendant intends to continue his course ofwrongful conduct by contacting other

17 of Plaintifts' clients and customers, in retaliation for Plaintifts' lawful termination of Defendant

18 Steinhauer's employment. Defendant Steinhauer intended to interfere with Plaintiffs' prospective

19 economic advantage by depriving them of the profits they would have earned from successfully

20 brokering the sale of the liquor license to Safeway.

21 Plaintiffs have no adequate remedy at law inasmuch as monetary damages cannot compensate

22 for damage to its customer goodwill and damages for loss of profits may not be quantifiable. Based

uJWl the foregoing, Plaintiffs are entitled to a Temporary Restraining Order, OSC Re Preliminary

24 Tinction, Preliminary Injunction and Permanent Injunction as prayed for herein restraining

25 Dtndant Steinhauer from the following: Communicating with, calling on, soliciting, taking away,

26 or~ltempting to communicate, call on, solicit or take away, either for Defendant, or for any other

27 pe~on, firm, corporation or entity, any of Plaintiffs' clients, customers and employees.
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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND osc RE: PRELIMINARY INJUNCTION
 n.

2 THE COURT HAS THE RIGHT TO STOP THE
UNLAWFUL CONDUCT IN ITS ENTIRETY BY INJUNCTIVE RELIEF
3
California Code of Civil Procedure 526 provides, inter alia, as follows:
4
An Injunction may be granted in the following cases:
5 I. When it appears by the Complaint that the Plaintiff is entitled to the
relief demanded. and such relief. or any part thereot: consists in restraining the
6 commission or continuance of the act complained of. either for a limited period or
pemetually;
7 *******
3. When it appears, during the litigation, that a party to the action is
8 doing. or threatens or is about to do. or is procuring or suffering to be done, some at
in violations of the rights of another party to the action respecting the subject of the
9 action. and tending to render the judgment ineffectual;
4. When pecunia!)' compensation would not afford adequate relief;
10 5. Where it would be extremely difficult to ascertain the amount of
compensation which would afford adequate reliet; .. , (Emphasis added).
11
Furthermore, Code of Civil Procedure 527 provides that an Injunction and/or Temporary
12
Restraining Order may be granted at any time before judgment where it appears that great or
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irreparable injury will result before the matter can be heard on notice. Finally, the Employment
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Agreement between Plaintiffs and Defendant also specifically authorizes injunctive relief for
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violations thereof.
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A. Plaintiffs Meet The Initial Two Part Test Justifyine Injunctive Relief
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"[T]rial courts should evaluate two interrelated factors when deciding whetherornotto issue
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a preliminary injunction. The first is the likelihood that the plaintiffwill prevail on the merits at trial.
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The second is the interim harm that the plaintiff is likely to sustain if the injunction were denied as
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compared to the harm that the defendant is likely to suffer ifthe preliminary injunction were issued."
21
Shoemaker v. County of Los Angeles (1995) 37 Cal.App.4th 618, 624-625. The facts in the instant
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case cry out to equity to issue the limited restraint Plaintiffs seek.
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~ The facts set forth in the Declaration of Craig Block demonstrate that Plaintiffs are likely to
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pretail on the merits at trial. Defendant Steinhauer can demonstrate no justification for his unlawful
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uS~l)f PlaintilTs' confidential information and intentional interference with prospective economic

ad~ntage. His actions clearly were motivated by malice against his former employers, upon whom
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intended to inflict, and has actually inflicted, substantial monetary injury.
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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND osc RE' PRELIMINARY INJUNCTiON

Furthennore, Plaintiffs shall suffer great and irreparable damage ifDefendant is not enjoined

2 from continuing to unlawfully solicit Plaintiffs' clients and customers and/or interfere with existing

3 business transactions, as Plaintiffs will lose substantial business and customer goodwill. In contrast,

4 Defendant Steinhauer shall suffer no injury if is he enjoined from communicating with Plaintiffs'

5 clients and customers. Thus, there is more than a reasonable probability that PlaintitTs will prevail

6 on the merits in this action and balancing the equities ofthe respective parties, equity mandates that

7 this Court enjoin Defendant Steinhauer as requested.

8 B. California Courts Have Enjoined Unlawful Solicitation of a Former Employer's

Customers and Interference With Prospective Business Advantage
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As noted in Robert L. Cloud & Assocs., Inc. v. Mikesell (1999) 69 Cal.AppAth 1141, 1150:
10
While a former employee has the right to compete with his fomJer employer, even for the
11 business of those who had been the customers of the former employer, a former employee
cannot solicit those customers' new business. . . . Acts of solicitation of the fonner
12 employer's customers and the misuse of confidential infommtion are acts of unfair
competition that may be enjoined.
13
Also, as stated in Uptown Enterprises v. Strand (1961) 195 Cal.App.2d 45, 50-51, actionable
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interference with one's right "to establish and conduct a lawful business ... is not limited to
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inducing breach of an existing contract or other wrongful conduct but comprises also unjustifiably
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inducing a third person not to enter into or continue a business relation with another." The "threat
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of future interference is a proper subject for injunctive action." (Emphasis added)
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As noted above, Defendant Steinhauer's actual and threatened conduct constitutes an
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unlawful solicitation ofhis fonner employers' customers and unlawful interference with Plaintiffs'
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business advantage, both of which are enjoinable. Plainti ffs shall suffer great and irreparable
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damage if Defendant Steinhauer is not enjoined from continuing to engage in tortious acts against
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Plaintitls. Plaintiffs have already lost, and will continue to lose, substantial profits and customer
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g~dwill, if Defendant is permitted to continue to contact Plaintifts' customers and clients and
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intlrfere with Plaintiffs' pending or future business activities. Accordingly, equity mandates that
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thicourt enjoin Defendant Steinhauer as requested.
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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING QRDERAND osc RE: PRELIMINARY INJUNCTION
 V.

2 THE TRO AND PRELIMINARY INJUNCTION SHOULD BE ISSUED WITHOUT THE
REOUIREMENTS OF AN UNDERTAKING
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Case authority is clear that upon issuance ofa Temporary Restraining Order. as opposed to
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a Preliminary Injunction. no undertaking is required by Code of Civil Procedure 529; Wallace vs.
5
Miller (1983) 140 Cal.App.3d 562; Allen vs. Pitchess (1973) 36 Cal.App.3d 321.
6
Given the Court's inherent equitable power of provisional relief, Plaintiffs respectfully
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request that the limited Temporary Restraining Order sought herein be issued without the
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requirement of an undertaking due to the fact that no haml can result to Defendant Steinhauer in
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enjoining him from contacting PlaintitTs' customers and clients.
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VI.
II
CONCLUSION
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For the foregoing reasons, Plaintiffs request that this Court issue the Temporary Restraining
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Order enjoining Defendant Michael Steinhauer from communicating with, calling on. soliciting,
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taking away, or attempting to communicate, calion. solicit or take away, either for Defendant, or for
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any other person, firm, corporation or entity, any ofPlaintiffs ' clients, customers and employees, and
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issue an and an Order to Show Cause re: Preliminary Injunction with respect thereto.
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Dated: March 29, 2004 Respectfully submitted.
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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND osc RE, PRELIMINARY INJllNCTION

DECLARATION OF ROBERT P. WARGO

2 L Robert P. Wargo, declare as follows:

3 I. r am an attorney duly licensed to practice law before all of the Courts of the state of

4 California, and am an associate of the Law Offices of Ronald Jason Palmieri, attorney for

5 Plaintiffs herein.

6 2. The facts set forth in this Declaration are true of my own knowledge and if called upon to

7 testify, I could and would testify competently thereto.

,
8 j. Pursuant to CRC 379, notice of this Application was given on March 25, 2004, at 3:15

9 PM. On said date and time, I personally called Michael Steinhauer at his home telephone,

10 323/850-5414, and left a message on his answering machine infornling him that Plaintiffs

11 would be filing this Ex Parte Application at 8:30 AM, in Department 46 of this Court,

12 located at III North Hill Street, Los Angeles, CA, on Monday, March 29, 2004.

13 r declare the foregoing to be true and correct and under penalty ofperjury under the laws of
14 the State ofCalifomia. Executed on March 25, 2004, at Los Angeles, CA.

J?aMfL~
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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND OSC RE: PRELIMINARY INJUNCTION
 DECLARATION OF CRAIG BLOCK

2 I, Craig Block, declare as follows:

3 I. I am an ofIicer of Plaintiffs ABC Escrow, Inc., and Alcohol Enterprises, Inc.

4 2. The facts set forth in this Declaration are true of my own knowledge and if called upon to

5 testifY, I could and would testifY competently thereto.

6 3. Plaintiff ABC Escrow, Inc., is a California corporation qualified to transact business in this

7 state, with its principal place of business in Pacific Palisades, CA.

8 4. Plaintiff Alcohol Enterprises, Inc., is a California corporation qualified to transact business

9 in this state. with its principal place of business in Pacific Palisades, CA.

10 5. Plaintiffs are related companies engaged in the business of acting as a third party finder and

II providing consulting and escrow services in connection with the sale, purchase and transfer

12 of alcoholic beverage licenses in California and throughout the United States.

13 6. On or abollt August 20, 200 L Plaintiffs and Defendant Steinhauer entered into a written

14 Employment Agreement whereby Plaintiffs agreed to employ Defendant as an at will

15 employee in the position of Sales/Customer Service Representative, on the terms and

16 conditions set forth in the Agreement, a copy of which is attached hereto as Exhibit "A."

17 7. Paragraph 10.4 of the Employment Agreement states that "during his ... employment and

18 for a period of two (2) years following the discharge, resignation or termination of

19 [Defendant] orthe termination ofth is Agreement, [Defendant] shall not directly or indirectly

20 use any [of Plaintiffs'] Confidential Information to call on, solicit, take away, or attempt to

21 call on, solicit or take away, either for [Defendant] or for any other person, firm, corporation

22 or entity the company's clients, customers and employees."

23 8.~ "Confidential Information" is defined in Paragraph 10.1 of the Employment Agreement to

24 include: (I) the name, address or telephone number of clients or customers; (2) information

25 obtained from customers or clients; (3) costs incurred by the Company in acquiring licenses;

26 (4) fees charged clients or customers for services; and (5) procedures utilized by the

27 Company in acquiring licenses on behalf of clients.

28 9. Paragraph 10.5 of the Employment Agreement states that "no adequate remedy at law may

Page 10
EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND OSC RE: PRELIMINARY INJUNCTION

exist for any violation of Sections 10.1-10.4 of this Agreement and that in the case of any

1 breach, a restraining order or injunction may be issued in addition to any other rights or

3 remedies, including damages, which may be appropriate."

4 10. Paragraph 11.9 of the Employment Agreement states that "in the event of any litigation

5 between or among the parties hereto respecting or arising out of this Agreement, the

6 prevailing party or parties shall be entitled to recover reasonable attorneys' fees and costs,

7 whether or not such litigation proceeds to final judgment or determination."

8 II. Plaintiffs terminated Defendant's employment on March 5, 2004, due to company

9 reorganization.

10 12. As of that date, Defendant Steinhauer knew that Plaintitfs had recently brokered the sale of

II a liquor license to Safeway, one of Plaintilfs' longtime clients, for the sum of $200,000,

12 because Defendant Steinhauer had worked on the transaction during the course of his

13 employment with Plaintiffs.

14 13. I am infonned and believe, and thereupon allege, that during the course of his employment

15 with Plaintiffs, Defendant Steinhauer learned that Plaintiffs were then in the midst of

16 negotiations with Safeway for the potential sale of another liquor license for the sum of

17 $210,000.00, which Plaintiffs would acquire from a potential seller for $120,000.

18 14. I was infornled by Jan Martin, a vice president of Safeway, who is Plaintiffs' principal

19 contact with the company, that on March 11,2004, Defendant Steinhauer twice telephoned

20 Ms. Martin.

21 15. Ms. Martin informed me that during the first conversation, Steinhauer identitied himselfonly

22 as "Mike" to Ms. Martin and stated to her that he had a liquor license available for sale to

l' Safeway for the sum of $180,000.

~-'

24 Ms. Martin thereafter infornled me that she had been contacted by someone named "Mike"

25 calling from the 323 area code and offering her the liquor license.

26 r suspected that "Mike" was our recently tenuinated employee, Defendant Steinhauer, and
27 that the license he was attempting to sell her was a license he was negotiating for from the

28 potential seller when he was temlinated from his employment by Plaintiffs. I requested that

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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND OSC RE: PRELIMINARY INJUNCTION

Ms. Martin contact "Mike" to make further inquiry regarding his identity and the potential

seller.

3 18. Ms. Martin infonned me that she subsequently spoke with "Mike" and he confinned to her

4 that he was, in fac.t, Defendant Steinhauer. He thereafter advised Ms. Martin that the reason

5 that he was calling her was so that Safeway could avoid being "gouged" with respect to this

6 transaction because Plaintitfs always gouged their clients. This statement was false, and

7 known by Defendant to be false, and had a tendency to injure Plaintiffs with respect to their

8 trade or business because the statement imputes dishonesty or a lack of ethics to Plaintiffs.

9 19. Steinhauer also stated that he would not be making any money from the transaction and that

10 would have the seller of the license contact Ms. Martin directly.

II 20. Ms. Martin infornled methat the potential seller contacted her directly, and Safeway and the

12 seller tentatively have entered into an agreement whereby Safeway has agreed to purchase

13 the liquor license directly from the seller for approximately $180,000.00, or approximately

14 $30,000 less than the amount which Safeway tentatively had agreed to pay to Plainti ffs for

15 acquiring the license.

16 21. Had Defendant Steinhauer not utilized Plaintiffs' confidential infonnation and interfered

17 with Plaintiffs' potential brokering of the sale of this liquor license to Safeway, Plaintiffs

18 would have earned approximately $90,000 from the sale.

19 22. Defendant's wrongful conduct, as set forth above, constituted a breach of his employment

20 contract in that he agreed not "to call on, solicit, take away, or attempt to call on, solicit or

21 take away, either for [Defendant] or for any other person, t"inn, corporation or entity the

22 company's dients, customers and employees."

23~, Defendant's wrongful conduct, as set forth hereinabove, has caused Plaintiffs to suffer

24 damages in the amount of$90,OOO.00, and unless and until enjoined by Order ofthis Court,

25 Defendant's conduct shall continue to cause irreparable injury to Plaintiffs, including, but

26 not limited to lost profits and damage to its customer goodwill.

27 Plaintiffs are further infonned and believe, and thereon allege, that Defendant intends to

28 continue his course of wrongful conduct by contacting other of Plaintiffs' clients and

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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND OSC RE: PRELIMINARY INJUNCTION
,03/25/2004 THU 15:09 FAX 3~9 3688 ABC ESCROW \ LLS
.. "
~ 0021002

..' ,."
."<

1 custome:rs, in retaliation for Plaintiffs' lawful termination of Defendant Steinhauer's

2 employment Defendant Steinhauer intended to interfere with Plaintiffs' prospective

3 economic advantage by depriving them of the profi~ they would have earned from

4 successfully brokering the sale ofthe liquor license to Safeway.

5 25. Plaintiffs have no adequate remedy at law inaslUUch as monetary damages cannot

6 compensate for damage to its customer goodwill and damages for loss ofprofits may not be

7 quantifiable.

8 26. Based upon the foregoing, Plaintiffs are entitled to a Temporary Restraining Order, ose Re

9 Preliminary InjUlletion, Preliminary Injunction aud PermanentInjunction as prayed for herein

10 restraining Defendant Steinhauer from the following: Communicating with, calling on,

11 soliciting, taking away, or attempting to communicate, call on, solicit orta!re away, either

12 for Defendant, or for any other pernon, finn, corporation or entity, any ofPlaintiffs' cli~,

13 customers and employees.

I declare under penalty ofpe.jwy under the laws ofthe State 0 ' . oroia that the fOrl:going
14
IS is true and correct. Executed on March 2004, at Lu6

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EX PAR're Al'pur.ATION POR TEMPORARY RESTltAlNlNG ORDEilAND OSC RE: PRELIMINARY INJUNCTION

~t/t>l 39"'<1 I~I~l"'d al\lN~ n9~lLt>el~



~~~
EXHlBIT"A"
. 03/~1/2004 THU 16:09 FAX _459 3688 ABC ESCROW \ LLS
~002/014

EMPLOYMENT AGREEMENT
,
This Employment Agreement {"Agreement"} is made and entered into on
g-2.0 , 200.1.. by and between ABC Escrow, Inc" Alcohol
EnterPrisesj.;~/ba Alcohol Licensed Properties (the 'Company") and
..M.iJe. ~'N 6~ , an individual ("Employee"), as follows:
1. EMPLOYMENT
1.1 Commencement Date and Title. Beginning B,Ur-WOf '
200..L E/TIQloyee Sha~1 ".~ ~. . '..
. .sAI6=i ~aa. .:s9(VI<.t:'. for the
Company, sUbject to eiermsand conditions of this Agreement and the Company's
policies, rules, regulations and procedures as contained in its Employee Manual1'lnd as
dictated by management. The terms and conditions of this Agreement cannot be
changed, modified or altered. The Company, however, may amend its policies, TtIles,
regUlations, procedures and handbooks from time to time, and at any time, without
notice. Employee hereby accepts the employment and agrees to render and perform all
services loyally, conscientiously and to the best of Employee's ability and experience,

2. EMPLOYMENT DEPENDENT UPON SUCCESSFUL COMPLETION OF

BACKGROUND INVESTIGATION

2.1 InvesligationS'''oy Department of Corporations and Department of

Justice.. Employee agrees atll;l.J!."derstands that any employment with ABC Escrow is
conditioned upon the Employee successfully completing the statutorily required
background investigations conduqled by the Department of Corporations, the
Department of Justice and any other governmental agencies.

. 3. TERMINATION AND AT WILL EMPLOYMENT

3.1 AT WILL EM'F'COYMENT. Either party may terminate this Agreement at

any time, with01Jt notice, for any reason, with or without cause, without further obligation
or liability (except that the Company shall be obligated to pay Employee all salaJ)' then
due and owing for work completed and make payment for unused vacation time, if any).
Any contrary information or statements her~fter made by any person may not be relied
~I, upon. The at-will nature of this employment can only be altered by Craig Block or Cindy
\i~ Block, and then any such representations will only be enforced if they. are in writing.

; : 3.2 Return of Company Property. Within twenty-four (24) hoors following

:l
, 'the discharge, termination or resignation of Employee or any other event which ends

t~.
1
0. -
this Agreement. Employee shall return to the Company all Company property.
. . 0~/1.1/2004 THU 16: 10 F.U 1459 3688 ABC ESCROW \ LLS
~003/014

4. DUTIES AND OBLIGATIONS OF EMPLOYEE

4.1 Description of Duties. Employee shall be employed by the Company in

the position set forth in SeCtIon 1.1. In such capacity, Employee shall do and perform
all services, acts or things necessary or adVisable, as determined by the Company, to
perform and fulfill Employee's duties in acting in such capacity for the Company.

4.2 Performance of Duties. Employee shall perform all services necessary,

required, or advisable to fulfill the duties of his or her position. Employee shall at all
times be sUbject to the direction of the Company, its management and other aulhon<:ed
agents, .and to all policies, rules, regulalio.ns and procedures established from time to
time by the Company. Employee will at all times faithfully;industriously, and to the best
of his or her ability, experience, and talents, perform all the duties that may be reqUired
of him or her.

4.3 Conflicts and Interferences. Employee shall not without the prior written
consent of the Company render services of a business, commercial, or professional
nature to any other person or organization that might create a conflict of interest or
otherwise interfere in any way with Employee's obligations under this Agreement.
SPecifically, while employed with the Company, Employee shall not, directly or
indirectly, whether as partner, employee, creditor, sh~holder, or otherwise, promote,
participate, or engage in any activity or other business competitive with the Company's
business.

.'s. COMPENSATION "

.........
5.1 Sa. ., sation for his or her services, Employee shall receive
(an hourly wage annual salary of $SO, Dr:!? CU' ,payable bi-weekly. dUri~
period ofemploymenl '1ifiWJia
~eu.) - ~MiW#t ..eev/~
5.2 Deductions and Wrthholdjngs. The Company shall have the right to
deduct from Employee's compensation all applicable state and federal tax withholdings
and deductions, and all federa!,_state, municipal and other taxes and charges as may
now be in effect or which mayhereafter be enacted or required as charges on the
compensation 9f Employee. The Company shall also have the right to deduct. from
Employee's compensation any Group Medical Insurance Premium for Employee's
covered dependents.

'
"l, 5.3 Closina of Company. In the event the Company is closed due to an
,earthquake, flooding, riol, or any other natural or man-made disaster pr unsafe

i
. condition, the Company, in its discretion, will determine whether it will pay to Employee
: . the amount that would have been paid to Employee had Employee worked the closed
I 'day(s), .

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@004/014

6. HOLIDAYS

6.1 Paid Holidays. Following the initial three (3)-month probationary period,
if employed with the Company on the following holidays, then Employee shall be paid
for the following holidays:

New Years Day

Memorial Day

Independence Day

Labor Day

Thanksgiving.Oay

Christmas Day

6.2 Policies. Rules. Regulations and Pro9f!dures Regarding

Holidays. (Refer to the Employee Manual.)

7. VACATION TIME
7.1 Vacation lime Allotted. If employed following one full year on a full-time
basis..Employee shall receive paid vacation time in accordance with the following
schedule:

(a)
~
. -
.........
Second ThroughFjflh Year of Employment. During Employee's
second through fifth year of employment with the Company, Employee shall receive "five
(5) days paid vacation, per calendar year (January 1 to December 31). Five (5) days is
equal to fOrty (40) hours. '
(b) , . After Fjfth Year of Employment. Following the completion of five
(5) years of amployment wi~Jt'le Company, Employee shall receive ten (10) days of
paid vacation per calendar year (January 1 to December 31). Ten (10) days is eqlJal to
eighty (80) hotJrs.

7.2 Policies. Rules. RegUlations and Procec!ures Regartfing Vacation

Time. (Refer to the Employee Manual.)
f.l,-

i 8. SICK LEAVE
8.1 Paid Sick leave. If employed following one year of full-time
. i\!employment with the Company. Employee may use, if needed, up to six (6) paid non-
~orking days per calendar year (January 1 to December 31) if unable to work because
3
UJ/IWUU4 ItlU 16: 11 FAll459 3688 ABC ESCROW \ LLS
~005/014

of his or her own illness, the need to care for a sick child, bereavement, or to resolve
personal emergencies.

8,2 Policies. Rules, Regulations and Procedures Regarding Sick

Leave. (Refer to the Employee ManUal.)

9. CONTRIBUTION TO GROUP MEDICAL PLAN OR LIFE INSURANCE

POLICY

9.1 Terms of Contribution. If employed after ninety (90) days of full-time

employment (40+ houl'$ per week), Employee will become eligible to participate in the
Company's Group Medical Plan. It is the responsibility of Employee to notify the
accounting department, in writing, when ninety (90) days have passed. The Company
will pay the premium for Employee's participation in the Company's Group Medical
Insurance Plan. Employee may add his or her dependents to the Company's Group
Medical Insurance Plan but must pay the full amount of the additional premium.

9.2 Release from Liability. The Company is not an insurer or insurance

company. Employee acknowledges that the Company is not responsible in any manner
for the acts or omissions of the medical plan. FLlrther,"Employee expressly releeses the
Company from any and all liability relating to the medical plan. Nothing in this provision
shall be construed as a release of any insurer or insurance company associated in any
way with the medical plan for. any acts or omissions.
. ~ 9.3 Right to Mod!f. The Company reserves the right to modify, suspend or
discontinue any and all of its..P.eneftt plans, policies and practIces at any time without
notice to or recourse by Employ~, so long as such action is leken generally with
respect to other similarly situated persons and does not single out Employee.

9.4 Policies. Rules, Regulations and.Procedures Regarding Contribution to

Medical Plan. (Refer to the Employee Manual and consult with the Company's plan
administrator.) ;
~_ ... - -

10. CONFIDENTIALITY

10.1 Definition of "Confidentiel Information". For the p1Jrposes this

Agreement, "Confidential Information" shall'mean and indude, but shall not be limited
(~, to, all of the following infonnation with respect to the Company: (i) the name, address,
IiI.:or telephone number of clients or customers; (2) information obtained from customers or
: ,clients; (3) costs incurred by the Company in acquiring licenses; (4) tees charged dients
,or customers for ljervices; and (5) procedures utilized by the Company in acquiring
, licenses on behalf of clients.

lA

4
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~006/014

10,2 Agreement of Confidentiality, Nondisclosure and Nonsolicitation. To

perfol1ll the SBlVices desaibed herein, Employee will be given access to secret and
Confidential Information. Employee hereby agrees that all Confidential Information so
provided shall be used solely by Employee in the performance of his or 'her obligations
under this Agreement. Employee further agrees that he or she shall not, without the
advance written consent of the Company, during his or her employment or any time
thereafter, directly or indirectly:

(a) Publish or in any way disclose to any third person or entity the
whole or any part of the Confidential Information;

(0) Make use of any Conlidentiallnforination in conducting business

with any other person or entity;

'" (c) Permit the use of the Confidential Information by any employer
other than the Company, or by any friend, relative, employee, agent, independent
contractor or affiliate of Employee for any purpose contrary to the tenns of this
Agreement; or

(d) Make use of any Conlidentiallnformation to call on, solicit, take

away, or attempt to call on, solicit or take away, either for Employee or for any other
person, firm, corporation or entity the Company's clients, customers, or employees,

10,3 Possession and Ownership of Confidenliallnformation. Employee

acknOWledges that the Confidential Information represents a valuable, important a,nd
materi!,!' business asset of the Company and disclosure is not permitted both by
California law and pursuant tcrthis Agreement Employee hereby agrees that the
Confidential Information is ~ shall remain at all times the exclusive property of the
Company and under no circum~ncewhatsoever shall Employee disclose or sell this
information to any person or entity.

'lOA Prohibition on Unfair CompetitioA and SoliCitation of Clients and Co-

Emplgyees Based Upon Use of-Secret or Conlidentiallnformation. Wi1l1out limiting the
obligations containea in Sections 10.1 through 10,3, in consideration of Employee'S
access to the Company's Con_fjrJentiallnformation, Employee agrees that during his or
her employment and for a period of two (2) years following the discharge, resignation or
termination of, Employee or the termination of this Agreement, Employee shall not
directly or indirectly use any Confidential Information to calion, solicit, take away, or
attempt to call on, solicit or take ENlay, either for Employee or for any other person, firm,
,oj. corporation or entity the Company's clients; customers and employees.
~: Moreover, in consideration of Employee's access to the Company's Confidential
~ Information, E~ployee ~9rees that dUring .his or her emp!oyment and for a period of two
i~'(2) years follOWing the dIscharge, reslgnallon or termination of Employee or the
\ 'termination of this Agreement, Employee shall not directly or indirectly use the

~",
" ;Company's ConfidentiallnformatJon to compete with the Company In the counties of
. Los Angeles, San Bernardino, Ventura, Kern, Orange, San Diego, Riverside, San

5
 I
U3I1lfZUUq m 16: 12 FAX 459 3688 ABC ESCROW \ LLS
~007 /014

Francisco, Sacramento, Alameda and Santa Barbara. Employee understands and

agrees that direct competition means lI1e development,' production, promotion or sale of
services competitive with those of lI1e Company. Indirect Competition means
employment by any competitor or third party providing services competing with the
Company for whom Employee wJII perform the same or similar function as he or she
performs for the Company. 6y signing below, Employee acknowledges that these
limited restrictions will not SUbstantially affect his or her right and ability to engage in his
or her business trade or profession following the tennination of this agreement.

10.5 Remedies. The Company and Employee .acknowledge that no

adequate remedy at law may exist for any violation ofSections 10.110.4 of this
Agreement and that in the case of any breach, a restraining order or injunction may be
issued in addition to any other rights or remedies, induding damages, which may be
appropriate.

10.6 Survival of Section 10. The provisions of Section 10 survive the

discharge, resignation or tennination of Employee or the tennination of this Agreement.

11. GENERAL PROVISIONS

11.1 Severability. If any provision of this Agreement, as applied to any party

or to any circumstance, shall be found by a court of competent jurisdiction to be void,
invalid or unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of any such provision in any other circumstance, or the
validity or enforceability of this Agreement.
~.

11.2 Waivers. A w.ai~r by !'loy party of any of the terms and conditions of
this Agreement in anyone instance shall not be deemed or construed to be !'l waiver of
such term or condition for the future, or of any subsequent breach thereof, nor shall it be
.
deemed a waiver of performance of any other obligation hereunder.

11.3 Entire Agreement. This Agreement contains the entire understanding of

the parties hereto relating to the subject matter hereof and supersedes all plior and
collateral agreements, undt:~~;Indings, statements and negotiations of the parties.
Each party acknowledges that no representations, inducements, promises, or
agreements, oral or written, with reference to the subject matter hereof have been made
other than as expressly set forth herein.

11 4 Representation by Counsel-in Execution. The parties agree that they

I'll each have been afforded the opportunity to be represented by counsel in the

i
negotiation and preparation of this Agreement. The parties each agree that they enter
into this Agreement freely, without coercion, and relying on each one's own jUdgment,
. not on any representations or promises made by the other party, except those
contained herein..

.!: 11.5 Governing Law.. This Agreement shall be govemecl by and construed in
1l. accordance with the laws of the State of California, and the parties hereby submit
6
031ll/Z004 THU 16: 12 FAX 1459 3688 ABC ESCROW \ LLS
~008/014

themselves to the courts of the County of Los Angeles for the purpose of enforcing the
Agreement. .

11.6 Gender and Number. In all matters of interpretation, whenever

necessary to give effect to any provision of this Agreement, each gender shall indude
the other, the singular shall include the plural, and the plural shall include the singular.

11.7 Section and Subsection Headings. The titles of the sections of this
Agreement are for convenience only and shall not in any Wfl)/ affect the interpretation of
any provision or condition of this Agreement.

11.8 Thircj Psrties. Except as may be elCPressty set forth herein, the parties
hereto do not intend to confer any rights or remedies upon any person other than the
parties hereto.

11.9 Legal Action. In the event of any litigation between or among the parties
hereto respecting or arising out of this Agreement, the prevailing party or parties shall
be entitled to recover reasonable attorneys' fees and costs, whether or not such
litigation proceeds to final judgment or determination.

11.10 Counterna!iS. This Agreement may be executed in counterparts which,

taken together, shall constitute the whole of the Agreement as between the parties.

12. AGREEMENT TO ARBITRATE

,.
. Employee agrees that any dispute (1) arising under or involving any provision .
of the Agreement, or (2) the otel!eh and/or alleged breach of any provision of this
Agreement, shall be submitted to binding arbitration. Such arbitration shall be
conducted pursuant to the provisions of the Federal Arbitration Act, 9 U.S.C., section 1,
et seq., if applicable, or the provisions of Title 9 of Part III of the California Code of Civil
Procedure, commencing at Section 1280 et seq. (or any successor or replacement
statutes) if the Fedanal Arbitration Act does not apply to Employee's employment.
Employee and Company agree to submit any such dispute to arbitration within one (1)
year of the date the dispute"1lfsf arose, or within one (1) year of the termination of
employment, whichever occurs first; provided, however, that if Employee's claim arises
under a statute providing for a longer time to file a claim, that staMe shall govern.

Notwithstanding the above paragraph, Employee does not waive his or her
>Ii, right to litigate claims for workers' compens'ation, unemployment insurance and any
~l wage and hour matter within the Jurisdiction of the California Labor Commissioner.
",' Employee also reserves the right to litigate claims under Title VII of the Civil Righls Act
~: of 1964 or the Fair Employment and Housing ht (FEHA) to the extent that the right to
l~litigate such claims is not wBivable under applicable law.
~ If Employee and the Company are unable to agree on a neutral arbitrator
'~.knOWledgeable in employment issues, the Company will obtain a list of arbitrators
7
U3/1l12U04 THlI16:13 FAX _459 3688 ABC ESCROW \ LLS
~009/014

knowledgeable in employment matters from the Federal or Stale Mediation and

Conciliation Service. Employee (first) and then the Company will altemately strike
names from the list until only One name remains; the remaining person shall be the
arbitrator. Arbitration proceedings shall be held at a location mutually convenient to
Employee and the Company.

The arbitrator shall have jurisdiction over pre-hearing discovery matters. The
arbitrator shall allow an adequate amount of.discovery reasonably necessary to
arbitrate the daims at issue.

Following a hearing conducted by the arbitrator, in a manner to be determined

as mutually agreed to by the parties andlor'by the arbitratbr, the arbitrator shall issue a
written opinion and award which shall be signed and dated. The arbitrator's opinion and
award shall decide all issues submItted and shall set forth the legal principles supporting
each part of the opinion. The arbitrator shall be pennitled to award only those remedies
in raw or equity which are requested DY the parties and which the arbitrator determines
to De supported by the credible, relevant evidence.

Employee and the Company agree that arbitration shall be the exdusive forum
for resolving all disputes arising out of or involving fh;s Agreement and Employee's
employment with the Company or the termination of that employment (with the
exception of claims for workers' compensation, unemployment insurance and any wage
and hour matter within the jurisdiction of the Califomia Labor Commissioner); provided,
however, that either party may file a request with a court of competent'jurisdlction for
equitable relief, including but,not limited to injunctive relief, pending resolution of any
dispute through the arbi1ration procedure set forth herein. If lhe Company does not
receive a written request for a-bitralion from Employee within one (1) year from the date
of Employee's termination, emJ:liQyee agrees that he or she will have waived any right to
raise any claim, in any forum, arising out of the breach or alleged breach of any
provision in this Agreement or termination of Employee's employment.

Nothing in this agreement shall be con!llrued as preclUding Employee from

filing a charge or complaint with the Equal Opportunity Commission (EEOC), thEl
Natlohallabor Relations Board (NLRB) or any other similar state or federal agency
seeking administrative resolution of a dispute or daim. However, any claim that cannot
be resolved administratively through such an agency shall be subject to this arbitration
policy. Employee and the Company shall each bear their own costs for legal
representation at any such arbitration. The Company will pay all costs of the aJt)ilration,
, including but not limited to arbitrator fees, that Employee would not be reqUired to bear
~,if the action were brought In court. '

~ Employee and the Company hereby agree that nothing contained herein shall
ipredude either party from obtaining injunctive Qr other equitable relief to restrain
~wiolations of this agreement or applicable law or to pres!!IVe the status quo pending the
, arbitration of any disputes subject to this section. Nothing contained herein shalt be
reemed to alter or modify the Company's policy of at-will employment. Employment

8
U3/11/2UU4 tHU 16:13 FAX ~459 3688 ABC ESCROW \ LLS
~ 010/014

With the Company is at-will and can be tenninated by either Employee or the Company
at any time, with or without cause or notice.

Employee and the Company hereby agree that this arbitration agreement shall
survive the termination elf Employee's employment and that this Agreement is a contract
binding on Employee and the Company.

13. ACKNOWLEDGEMENT

By signing this agreement, Employee acknowledges that he or she has read,

understands and agrees to be bound by the terms of this Agreement, including
specifically but not limited to, the At-Will Employment, Confidentiality, and the
Agreement to Arbitrate provisions. Employee also acknowledges that he or she has
received a copy of this Agreement.

Executed at __.j.(..tl4...S..j.a+l"'~m.Il.l<"'~"'- -" California.

(J

Employer.

i,'

Date: j.J,lj. too I

Employee:

Date: 3: iu Zf!o (

9
..
03/11/2004 THU 16:14 FAX ~59 3688 ABC ESCROW \ LLS
~ 012/014

EMPLOYMENT AGREEMENT ADEMVMN

Original Employment Agreement dated 8-20-01

This Employment Agreement("Agreement") is made and entered into on August 7,2002

by and between ABC Escrow, Inc Alcohol Enterprises, Inc dba Alcohol Licensed
Properties( the "Company") and Michael Stei.nhauer, an individual("Employee") as
follows:

1. EMPLOYMENT(per original employee agreement dated August 20.200n

1.1 Commencement Date and Title. Beginning August 7, 2002 Employee

shall serve as a Sales /Customer Service RepreseDtative, for the Company, subject
to the terms and conditions of the original Agreement and the Campany's
policies, rules regulations and procedures as contained in its Employee Manual
and as dictated by management. The tenns and conditions ofthis Agreement
cannot be changed, modified or altered. The Company however may amend its
policies, rules, regulations, procedures and handbooks from time to time and at
any time, without notice. Employee herby ar:cepts the employment and agrees to
render and perform all services loyally, conscientiously and to the best ofthe
Employee's ability and experience.

5. COMPENSATION (per the original employee agreement dated august 20, 200])

5. I Salary. As compensation for his or her services, Employee shall receive (an
annual salary of $34,000.00, payable bi-weekly during the period of employment.
Employee understands and accepts that there will be no other increase in the salary
compensation through the telID of employment.
".
ACKNOWLEDGEMENT

By signing this agreement, employee acknowledges that he /she has read, understands
and agrees to be bound by the terms of this Addendum! Agreement, including
specifically but not limited to, the At-Will Employment, Confidentiality, and the
Agreement to Arbitrate provisions. Employee also acknowledges that he or she has
received a c this Addendum! Agreement.