Opinion
01 Civ. 2433 (RLC)
September 4, 2002
KELLEY HARRIS, LLP, for Plaintiffs; Matthew J. Harris of Counsel.
ROBINSON BROG LEINWAND GREENE GENOVESE GLUCK, P.C., for Defendants; Christy L. Reuter of Counsel.
OPINION
Plaintiffs Aslan Tatar ("Tatar") and Selma Onel ("Onel") seek damages resulting from the alleged breach by defendant Elite Gold, Inc. ("Elite Gold") of various written and oral agreements with plaintiffs. Elite Gold counterclaims, seeking liquidated damages for plaintiffs' alleged breach of their employment contracts with defendant. A bench trial was held from April 16, 2002 to April 17, 2002.
I. Background
The following facts were established at trial. Tatar and Onel are citizens of Turkey, who were, until two years before trial, employees of a wholesale and retail jewelry business ("Gulaylar") located in Istanbul, Turkey. In the fall of 1999, Ilhan Gulay ("Gulay"), then the head of Gulaylar's jewelry group, met with Tatar in Turkey. At that meeting, Gulay orally offered Tatar a job working for Elite Gold, a jewelry business being opened by Gulaylar in New York city. (Tr. at 17, 18.) At a second meeting between Tatar and Gulay, also in the fall of 1999 and also in Turkey, Tatar verbally accepted Gulay's offer on condition that Elite Gold also offer a job to Tatar's then-fiancee Onel. Gulay responded by also offering a job to Onel. (Tr. at 19, 20, 21)
Tatar and Onel have subsequently married and had a child together.
On or about November 24, 1999, Tatar and Gulay held a third meeting in Turkey, at which time Gulay advised Tatar that the terms of both Tatar's and Onel's employment at Elite Gold would include the following:
a) An extended period of employment (Tr. at 21);
b) salaries sufficient for Tatar and Onel to lead a middle class life in New York City (Tr. at 22);
c) an apartment in New York for Tatar and Onel paid for by Elite Gold at least until December 31, 2000 (Tr. at 21)
d) housing for the duration of their employment, or, alternatively, a raise in pay after December 31, 2000, sufficient to allow Tatar and Onel to afford a middle class apartment equivalent to the one Elite Gold was to provide them rent free until that date (Tr. at 22).
e) L-1 Visas for Tatar and Onel so that they could work legally in the United States. (Tr. at 21.)
Gulay apparently did not communicate the offer and terms directly to Onel. Instead, Tatar acted as an intermediary, presenting Elite Gold's offer to Onel, then relaying her verbal acceptance (as well as his own) back to Gulay. (Tr. at 97, 98.)
That same day, Gulay had Tatar and Onel sign written employment contracts with Elite Gold. The terms of Tatar's written contract were as follows:
a) A five-year term of employment (Pls.' Ex. 1, § 3);
b) a net salary of $875.00 every two weeks, after payroll deductions (Pls.' Ex. 1, § 8.1);
c) rent in New York until December 31, 2000 (Pls.' Ex. 1, § 9.1);
d) health insurance (Pls.' Ex. 1, § 9.3; Tr. at 22-23)
The terms of Onel's written contract were virtually identical, with the notable exception that her net salary was to be $775.00 every two weeks, after payroll deductions. (Pls. Ex. 5, §§ 3, 8.1, 9.1; Tr. at 103.)
Neither written contract contained the provision that Gulay had orally promised guaranteeing Tatar and Onel housinq or an equivalent raise in pay after December 31, 2000. Both contracts, however, were written in English, a language that neither Tatar nor Onel could read with any comprehension (Tr. at 23, 102, 103, 160). No Turkish translations were ever prepared for the pair (Tr. at 8, 169), and they were not provided copies of the English versions they did sign. (Tr. at 40.) Indeed, it is not even clear that Gulay informed the couple that these documents were, in fact, their employment contracts. Tatar and Onel claim that he characterized the papers merely as forms necessary to secure their promised L-1 Visas. (Tr. at 22-23, 102-03.)
In March of 2000, Tatar and Onel, emigrated to the United States, moved into an apartment rented for them by Elite Gold, and began their new jobs. (Tr. at 28.) Shortly thereafter, on or about March 20, 2000, Tatar signed a second contract, also written in English, with terms similar to the first, except that the dollar amount of Tatar's salary was stated in gross (not net), and there was no provision for housing. (Pls.' Ex. 3.) Tatar testified that he was asked to sign the second contract as a favor to his employer, who allegedly hoped his example would alleviate his co-workers' concerns about signing similar contracts. (Tr. at 31.)
That same day, Tatar went to the Turkish Consulate to apply for the third of three postponements of his military service to which he was entitled under Turkish law. Tatar was advised by the Consulate that he lacked "contract documentation" necessary to get his deferment. (Tr. at 34.) Tatar returned to Elite Gold and asked to see his documentation, but was told that it was still in Turkey, where it had originally been signed. Instead, Elite Gold offered Tatar the contract he had signed earlier that day. Tatar took this second version of his employment agreement back to the embassy and was granted his deferment. (Tr. at 35-36.) This time, however, he held on to his contract, rather than returning it to his employer. (Tr. at 40, 75-76.)
Every male citizen of Turkey over the age of twenty is legally obliged to serve for eighteen months in the Turkish military. Turkish law, however, allows each prospective conscript up to three deferments for certain legally prescribed reasons. One such ground for deferment — and the one that Tatar relied upon here — is available to individuals living outside the country, as legal residents, with full work privileges. After three deferments, individuals can fulfill their service obligation by paying a fee and then serving only a month in the military. (Pls.' Supplementary Ex..)
Tatar and Onel both worked for Elite Gold, without incident, through late August of 2000. That summer, Tatar learned that Onel was pregnant, and relayed the news to their bosses, who responded by becoming ruder and stricter towards him. (Tr. at 47, 50.) On or about August 23, 2000, Tatar was chastised by his manager, Selim Erdenen ("Erdenen"), for causing unnecessary friction with his coworkers. (Tr. at 111-12, 197.) Then, on or about September 30, 2000, Erdenen again reprimanded Tatar, this time for inventory discrepancies in the latter's department. (Tr. at 200-01) Tatar admitted that the inventory was short and signed a report to that effect. (Tr. at 44.) Beyond the foregoing, however, there is no formal record of any further warnings to Tatar, until the date of his discharge. Onel was not implicated in any of these incidents, and there is no record of any reprimands against her ever.
On or about October 13, 2000, Tatar was called in for a meeting with Gulay and Erdenen, in the latter's office at Elite Gold. (Tr. at 50.) Suspicious that his employers might be planning to fire him, Tatar attended the meeting with a portable recording device secreted on his person. (Tr. at 50.) The conversation grew heated as the three men discussed Onel's pregnancy and the strain a baby would put on Tatar's finances. (Tr. at 50.) Tatar pleaded for substantial salary increase, along the lines of the one he had been promised back in Turkey. Gulay responded that the most he could offer Tatar was a raise of $500. (Tr. at 51.) Erdenen suggested that if Tatar and Onel wanted to return to Turkey', the couple should not feel bound by their contracts with Elite Gold. Tatar replied that, given his military and familial obligations, a return to Turkey was out of the question. (Tr. at 52.) He did, however, agree to consider their offer of a $500 raise, and to give them a response the following day. (Tr. at 52.)
The next day, on or about October 14, 2000, the three met for a second time in Gulay's office. (Tr. at 52.) Once again, Tatar went equipped with a portable recording device. (Tr. at 52.) At that meeting, Tatar made a final plea for a raise greater than $500, but indicated that he was now willinq to settle for something in the vicinity of that sum. He was informed by Gulay, however, that there was no longer a place for him or Onel at Elite Gold. (Tr. at 53.) Tatar pressed his employers to clarify that they were, in fact, terminating the two. Gulay replied that the couple could work through the end of the month, but reiterated that their exits had been given. (Tr. at 53.) Tatar replied that they could not continue working knowing they would have to leave at the end of the month. He informed Onel that they had been fired, and the two departed Elite Gold for good. (Tr. at 55.)
According to Tatar: "In Turkey, to be given an exit . . . means getting fired." (Tr. at 53-54.)
II. Discussion
The court agrees with the parties that New York law governs their claims and counterclaims, all of which involve breaches of various written and oral contracts. Under New York law, a party seeking recovery for breach of contract must show four things: (1) an agreement; (2) adequate performance by the party seeking recovery; (3) breach by the other party; and (4) damages. E.g., Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525 (2d Cir. 1994). For purposes of clarity, the court considers plaintiffs' causes of action in reverse, beginning with their third and fourth, which relate to defendant's breach of its oral agreement to provide plaintiffs with either a place to live or the salary equivalent, for the full duration of their employment.
A. Oral Agreements
The problem with plaintiffs' claims regarding the oral contract is that even though the court believes defendant's agent did, in fact, make the promise at issue, plaintiffs both signed written employment contracts that do not contain the disputed term. It is well established that where the terms of a written contract are clear and comprehensive, "evidence of a prior or contemporaneous communication between the parties that contradicts, varies, or explains the agreement is generally barred by the parol evidence rule." Stone v. Schulz, 647 N.Y.S.2d 822, 823 (App.Div. 1996) (citation omitted); see also Thomas v. Scutt, 127 N.Y. 133, 137 (1891) ("It is a general rule that evidence of what was said between the parties to a valid instrument in writing, either prior to or at the time of its execution, cannot be received to vary its terms.")
The written employment agreements here clearly state that plaintiffs' rent would be paid "for a period commencing from the date of employment to December 31, 2000." (Pls.' Ex. 1, § 9.1.) Moreover, plaintiffs signed said agreements, and the general rule is that "the signer of a deed or other instrument, expressive of a jural act, is bound thereby." Pimpinello v. Swift Company, Inc., 253 N.Y. 159, 162 (1930). This principle holds even where, as here, a party signs an agreement without reading its terms. Id. at 163 ("If the signer could read the instrument, not to have read it was gross negligence; if he could not read it, not to procure it to be read was equally negligent; in either case, the writing binds him.") (citations omitted). So long as plaintiffs' written contracts remain valid, therefore, the parol evidence rule would seem to bar their claims for breach of oral agreement.
There is, however, a limited exception whereby a party to a written contract may avoid its terms if he "is illiterate, or blind, or ignorant of the alien language of the writing, and the contents thereof are misread or misrepresented to him by the other party, or even by a stranger," and he is not negligent. Id.; see also Continental Airlines, Inc. v. Lelakis, 943 F. Supp. 300, 305 (S.D.N.Y. 1996) (Scheindlin, J.), aff'd 129 F.3d 113 (2d Cir. 1997). This exception offers plaintiffs, neither of whom is fluent in English, two alternative possibilities for avoiding their contracts, thereby evading the parol evidence rule.
Technically, the arguments alluded to in this section are actually affirmative defenses to a breach of contract claim. However, the court sees no reason why such arguments cannot also be advanced where a party seeks to avoid a written contract. for reasons unrelated to such a defense. Moreover, the court notes that Tatar and Onel are, in fact, also named as counter-defendants to Elite Gold's counterclaims against them. Therefore, arguments in favor of recission are appropriate.
The first argument is that their assent was procured by Gulay's fraudulent representation that they were simply signing forms required for their L-1 Visas. If true, such fraud in the execution would indeed render their written contracts void ab initio, and therefore a nullity. Hetchkop v. Woodlawn at Grassmere, Inc., 116 F.3d 28, 32 (2d Cir. 1997). However, the court finds it difficult to believe that Tatar and Onel did not realize they were signing agreements of some kind back in Turkey. They did, after all, sign the documents at the very same meeting where the terms of their employment were the focus of discussion. They each signed every page of their respective contracts, and although they could not read English, they could still presumably recognize the numbers associated with their salaries.
The alternative argument is that even if plaintiffs did knowingly sign their contracts, they were induced to do so by Gulay's fraudulent representation that the terms of their agreements would include housing or the salary equivalent for their entire employment. This claim is more plausible since the court believes that Gulay did, in fact, make this particular representation. Indeed, plaintiffs clearly trusted Gulay as a father figure, and were presumably accustomed to deferring to his authority not just as their boss at Gulaylar, but also as their elder. (Tr. at 4, 9, 22.) It is thus reasonable to think that plaintiffs, with their limited command of English, would rely on Gulay's representations and sign agreements they could not read. Gulay's deception thus entitles plaintiffs to void their written contracts. E.g., Gaskin v. Stumm Handel GmbH, 390 F. Supp. 361, 365-67 (S.D.N.Y. 1975) (Canella, J.) ("However, if the other party deceives [the party who cannot read the contract] as to its contents, the problem is the effect of fraud on a failure to read. Most of the cases have held that such a contract may at least be avoided.").
Nor does the court believe that plaintiffs were negligent in failing to procure their own translations. See Gaskin, 390 F. Supp. at 367. Though the sums at issue were substantial, plaintiffs are anything but sophisticated businesspeople. Moreover, the contracts were signed not in the United States but in Turkey, where individuals with the skills necessary to translate an English-language legal document were presumably scarce.
Even if plaintiffs exercise this Option, however, they face still another hurdle to prevailing upon their claims for breach of oral contract. In the absence of a writing, Gulay's oral representations become, by default, the terms of plaintiffs' employment agreements. Their problem is that nothing Gulay said ever established a fixed duration for their employment. And under New York law, "absent an agreement establishing a fixed duration, an employment relationship is presumed to be a hiring at will, terminable at any time by either party." Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 333-34 (1987); see also Wright v. Cayan, 817 F.2d 999, 1002-03 (2d Cir. 1987)
Here, the closest thing to a fixed duration that plaintiffs can point to is Gulay's promise that they would enjoy a "long period of employment" at Elite Gold. (Tr. at 21.) Courts have held, however, that references to a "long term of employment" are too indefinite to overcome the presumption of at-will employment. Peters v. MCI Telecomm, Corp., 685 F. Supp. 411, 414 (S.D.N.Y. 1988) (Daronco, J.) ("The Court concludes . . . that "long-term employment' is even less definite than a permanent appointment or employment until retirement, neither of which states a clear and definite limitation on the employer's right to discharge without cause. ") (citations omitted).
Enforcing the oral contracts, therefore, would render plaintiffs employees at will. As such, the couple's entitlement to housing would last only as long as their employment, which could be terminated without cause at any time. And since there is no dispute that defendant provided them with free housing until the date of their discharge, plaintiffs would have no claim for breach of oral contract. Though adverse to plaintiffs, this conclusion does highlight a related point that is more favorable to their claims: the oral agreements afford them far less protection than their written contracts, which provide that they can only terminated after three warnings. And equitable considerations require the court to grant plaintiffs the most favorable resolution that the circumstances afford.
B. Written Agreements
This brings the discussion to plaintiffs' remaining causes of action (actually their first and second), which relate to defendant's breach of Tatar and Onel's written employment agreements. According to plaintiffs, defendant failed to give them the requisite three warnings before terminating their employment, thereby violating the unambiguous terms of both written agreements.
Courts have held that where "`a condition is required by the agreement of the parties . . . a rule of strict compliance traditionally applies.'" Markovitz v. Venture Info. Capital, Inc., 129 F. Supp.2d 647, 654 (S.D.N.Y. 2001) (Sweet, J.) (quoting Farnsworth, Contracts § 8.3, at 571 (1990)). And, as previously noted, plaintiffs' written agreements both clearly state: "The employer reserves the right to unilaterally terminate the agreement herein following three warnings issued to employee due to noncompliance with disciplinary rules and regulations." (Pls.' Ex. 1, § 12.1; Pls.' Ex. 5, § 12.1.)
Defendant argues that plaintiffs left their jobs of their own free will. Such voluntary departure would, if true, obviously foreclose plaintiffs' claims in this regard. However, after hearing the testimony of the various witnesses and weighing the evidence, the court cannot accept defendant's version of events. It simply strains common sense to think that plaintiffs would quit their employment knowing the result would be the loss of their L-1 Visas (making them illegal residents in this country) and automatic conscription for Tatar upon his return to Turkey. (Pls.' Trial Br. at 5.) The court finds, in other words, that Tatar and Onel were terminated.
Needless to say, this finding vitiates defendant's counterclaims, which assume that plaintiffs voluntarily departed defendant's employment.
Defendant also claims that Tatar was, in fact, given the three warnings mandated by his contract. As an initial matter, the court notes that even if this were true, it would not excuse defendant's termination of Onel, who has no record of any warnings against her. Moreover, the court's reading of the record finds no adequate showing that Tatar himself received the contractually required notice. The record reveals, at best, only two warnings prior to October 14, 2000, the date of his firing, and it is not even clear whether these were actually warnings or merely informal reprimands.
Defendant suggests that Tatar's disrespectful behavior and abandonment of his job on October 14, 2000 should qualify as a third warning for purposes of the notice condition. (Joint Pre-Trial Order at 5.) However, as suggested previously, the court does not believe that Tatar abandoned his job. And while his behavior, under Turkish custom, might well have merited sanction, any warning should have been given prior to (not the same day of) his termination to be effective. Markovitz, 129 F. Supp.2d at 654 ("A `warning' such as notice of termination simply cannot perform its function unless it is provided prior to the termination.").
As a result, Tatar and Onel are each entitled to damages for defendant's breach of their respective written employment contracts. The standard measure of damages for breach of an employment contract is "the wage that would be payable during the remainder of the term reduced by the income which the discharged employee has earned, will earn, or could with reasonable diligence earn during the unexpired term." Abady v. Interco, Inc., 430 N.Y.S.2d 799, 807 (App.Div. 1980); see also 52 N.Y. Jur. Employment Relations § 249 (2000). However, because neither Tatar nor Onel offers any information regarding what they have earned, will earn, or could with reasonable diligence earn, the court cannot yet say the precise amounts to which they are each entitled.
The prime facie measure of damages is relatively easy to compute for both plaintiffs. Onel is entitled her biweekly salary of $750.00 for each of the 112 two-week periods remaining on her contract as of her termination on October 14, 2000, or $84,000.00. Additionally, she is entitled to the cost of health insurance for the same period, estimated at $20,000.00, for a total of $104,000.00. Similarly, Tatar is entitled to his salary of $875.00 for 112 two-week periods, plus an estimated $20,000.00 in health insurance, for a total of $118,000.00. The record, however, reveals little about what Tatar and Onel have (or could have) earned since their termination, and even less about what they might earn in the future. The court is aware that Tatar was employed for a time after his discharge by an airline messenger service, and that he currently works for UPS Logistics. (Tr. at 56.) However, no information as to his salary and dates of employment has been provided. It is not clear whether Onel has held a job or even looked for work since her discharge. Her obligation to do so is obviously lessened by her pregnancy and the birth of the couple's child. However, her recovery too must still be reduced by the amount she could, with reasonable diligence, earn over the remaining years of her employment term.
Pls.' Trial Br. at 13.
Pls.' Trial Br. at 13.
Accordingly, plaintiffs are ordered to submit, within 30 days from the date of this opinion, detailed descriptions, including salary, of any jobs that Tatar or Onel have held since their discharge from Elite Gold. Plaintiffs should also produce documentation, such as pay stubs, corroborating any claims along the foregoing lines. Copies of all documents and submissions are to be provided to defendant, who will then have 30 days to register any objections with the court. The court will then determine the appropriate amount of each plaintiff's damages.
III. Conclusion
Plaintiffs have established that they were terminated without receiving the three warnings required by their respective employment agreements. This defeats defendant's counterclaims and entitles plaintiffs to damages. However, plaintiffs have not, as yet, offered enough information for the court to determine the precise amounts to which each plaintiff is entitled. The parties are thus ordered to supplement their submissions in the fashion, and according to the schedule, delineated above.
IT IS SO ORDERED