United States District Court, W.D. Wisconsin
MITEK CORPORATION, ATLAS SOUND L.P., and INNOVATIVE ELECTRONIC DESIGNS, LLC, Plaintiff,
TERESA JOHNSON, Defendant.
D. PETERSON DISTRICT JUDGE
Mitek Corporation, Atlas Sound L.P., and Innovative
Electronic Designs, LLC, employed defendant Teresa Johnson as
their Credit Group Leader. In that role, Johnson interacted
with plaintiffs’ customers and managed their payments
in plaintiffs’ accounting systems. Plaintiffs now
accuse Johnson of abusing that position and diverting
customer payments into her personal account. They allege that
she forged payment instructions and misdirected more than
$500, 000 over three years.
allege violations of the Computer Fraud and Abuse Act, 18
U.S.C. § 1030, breach of fiduciary duty, conversion, and
unjust enrichment. They seek injunctive relief under Federal
Rule of Civil Procedure 65. Dkt. 3. Specifically, plaintiffs
want a temporary restraining order and a preliminary
injunction to freeze Johnson’s Wells Fargo account and
prevent her assets from being transferred. They also want to
prevent her from destroying information on her computer and
other devices. Longer term, they seek a full accounting of
her records and expedited discovery.
court had set a hearing for today, August 4, 2016, and
notified Johnson. However, Johnson has a medical procedure
scheduled for today, so the court will move the hearing to
Monday, August 8, 2016 at time to be set after consultation
with the parties. But the court will not wait for the hearing
before granting emergency relief to plaintiffs.
obtain injunctive relief, plaintiffs must demonstrate: (1) a
likelihood of success on the merits; (2) the lack of an
adequate remedy at law and irreparable harm absent the
injunction; (3) that the balance of harms tips in their
favor; and (4) that the public interest favors the injunctive
relief. Lucini Italia Co. v. Grappolini, 288 F.3d
1035, 1038 (7th Cir. 2002). Plaintiffs have demonstrated a
strong likelihood of success on the merits. They allege-in a
verified complaint-that Johnson used a computer well beyond
her authorization and with intent to defraud, in violation of
the Computer Fraud and Abuse Act. Plaintiffs are also likely
to prevail on their state law claims for breach of fiduciary
duty, conversion, and unjust enrichment. Johnson allegedly
exploited her position as plaintiffs’ agent, as well as
her access to plaintiffs’ clients and accounting
system, to divert clients’ payments away from
plaintiffs and into her own account, enriching herself. The
documentation submitted by plaintiffs provides strong support
for their claims.
lack an adequate remedy at law. Without the requested relief,
evidence and information relevant to their claims and damages
may be permanently lost. Johnson currently has control over
the Wells Fargo account to which she diverted
plaintiffs’ funds. Without the requested relief,
Johnson could transfer those funds so that they would be
beyond the reach of this court should plaintiffs ultimately
prevail. These harms would be irreparable.
other side of the balance of harms, the complete freezing
Johnson’s assets would impede Johnson’s access to
her own money and prevent her from meeting her ordinary
living expenses. Accordingly, the court will modify the
requested relief and allow Johnson use of her assets for
ordinary living expenses.
the court finds that the public interest would not be impeded
by the granting of short-term emergency relief.
emergency relief granted here covers only the very short
term, and the court will re-evaluate the propriety of
preliminary relief after hearing from Johnson.
Plaintiffs’ request for an accounting of
Johnson’s records is not as pressing. Nor is their
request for expedited discovery. Both these issues can be
addressed when the court has input from both sides.
Plaintiffs Mitek Corporation, Atlas Sound L.P., and
Innovative Electronic Designs, LLC’s motion for a
temporary restraining order and a preliminary injunction,
Dkt. 3, is GRANTED as provided in this order.
Wells Fargo Bank Account associated with either Atlas Sound
L.P. or with Teresa Johnson with the number ending in 8037 is
frozen. Defendant Teresa Johnson is restrained and enjoined
from withdrawing or transferring funds in the 8037 account.
Johnson’s assets are frozen. Until further order of the
court, Johnson is prohibited from spending, transferring, or
otherwise encumbering or disposing of her assets. However,
notwithstanding the foregoing, Johnson may spend only so much
of her otherwise frozen assets as required for her ordinary
and necessary personal living expenses. Johnson must keep
accurate records of her expenditures and provide ...