Opinion
9567/2003
10-10-2018
NEW YORK CARDIOTHORACIC SURGEONS, P.C., Plaintiff, v. Gregory R. BREVETTI, M.D., Defendant. Gregory R. Brevetti, M.D., Third-Party Plaintiff, v. Isreal J. Jacobowitz, and Isreal J. Jacobowitz, M.D., P.C., Third-Party Defendant. Gregory R. Brevetti, M.D., Third-Party Plaintiff, v. Isreal J. Jacobowitz, and Isreal J. Jacobowitz, M.D., P.C., Third-Party Defendant.
Attorney for Plaintiff, Anthony J. Genovesi, Esq., Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carone LLP, 1 Metro Tech Center, Brooklyn, NY 11201, 718-215-5300 Attoney for Defendant, Jeffrey S. Kofsky, Esq. Kamerman, Uncyk, Soniker & Klein PC, 1700 Broadway, New York, NY 10019, 212-400-4930
Attorney for Plaintiff, Anthony J. Genovesi, Esq., Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carone LLP, 1 Metro Tech Center, Brooklyn, NY 11201, 718-215-5300
Attoney for Defendant, Jeffrey S. Kofsky, Esq. Kamerman, Uncyk, Soniker & Klein PC, 1700 Broadway, New York, NY 10019, 212-400-4930
Francois A. Rivera, J.
The following is the decision and order issued after a non-jury trial in the above captioned matters.
BACKGROUND
On March 17, 2003, New York Cardiothoracic Surgeons, P.C., (hereinafter NYCS) commenced the instant action by filing a summons and verified complaint with the Kings County Clerk's Office (KCCO). Defendant, Gregory R. Brevetti, M.D. (hereinafter Brevetti) interposed an answer, counterclaim and third-party complaint dated September 6, 2006. By a pleading dated October 17, 2006, NYCS interposed a reply to Brevetti's counterclaims and third-party defendants Isreal J. Jacobowitz and Isreal J. Jacobowitz, M.D., P.C. (hereinafter jointly the Jacobowitz defendants) interposed and an answer to Brevett's third-party complaint.
NYCS's complaint alleges the following salient facts, among others. Isreal J. Jacobowitz (hereinafter Jacobowitz) and Brevetti are both cardiothoracic surgeons licensed to practice in the State of New York. Jacobowitz, M.D., is the president of NYCS and the principal and owner of Isreal J. Jacobowitz, M.D., P.C. On October 21, 2001, NYCS employed Brevetti pursuant to a written contract (hereinafter the contract). On January 22, 2003, Brevetti resigned without prior notice. Thereafter Brevetti began practicing cardiothoracic surgery in Kings County allegedly in violation of a restrictive covenant contained in the contract.
NYCS's complaint seeks liquidating damages based on Brevetti's alleged violation of a restrictive covenant provision in the contract. It also seeks, inter alia, injunctive relief, the imposition of a constructive trust and an accounting of all the money Brevetti received by virtue of his breach of the contract.
Brevetti's pleading dated September 6, 2006 consists of his answer with counterclaims asserted as against NYCS. It also consists of a third-party complaint asserted against the Jacobowitz defendants. Both the counterclaim and third-party complaint assert the same six causes of action premised on the same allegations of fact. The first cause of action is for unjust enrichment. The second cause of action is for recovery in quantum meruit. The third cause of action is for breach of contract. The fourth cause of action is for conversion. The fifth cause of action is for fraud. The sixth cause of action is for violation of New York State Labor Law §§ 190 - 199. Brevetti also seeks reasonable attorney's fees incurred in enforcing the contract through the prosecution of his counterclaims and third-party complaint.
The counterclaims and third-party complaint alleges, inter alia, that on October 8, 2001, Brevetti began working as a cardiothoracic surgeon with Jackowitz's medical practice pursuant to the contract. According to the contract terms, Brevetti was to receive an annual base salary according to the following schedule: $225,000.00 from October 2001 to September 2002; $300,000.00 from October 2002 to September 2003; $400,000.00 from October 2003 to September 2004 and $437,000.00 from October 2004 to September 2005. Additionally, Brevetti would also receive additional compensation in the form of four (4) months of severance pay upon his separation from employment without cause. Furthermore, Jacobowitz's medical practice would also pay for Brevetti's disability insurance coverage.
Brevetti's salary was composed of a $25,000.00 annual payment from SUNY Downstate Medical Center with the balance paid by Jabobowitz's practice. According to this arrangement Jacobawitz's medical practice paid Brevetti $1666.67 monthly or $200,000.00 annually from October 2001 to September 2002. Contrary to the contract's payment schedule, Jacobowitz's medical practice did not increase Brevetti's annual base salary from $225,000.00 to $300,000.00 effective October 2002. Instead, Jacobowitz's medical practice continued to pay Brevetti's salary at the $225,000.00 annual rate in October and November 2002 paying him only $16,666.67 for each of those months. In December of 2002, Jacobowitz's medical practice only paid Brevetti $1,666.67 for that month. In January 2003, Jacobowitz's medical practice did not pay him at all. Jacobowitz's medical practice also failed to provide or pay for Brevetti's disability insurance coverage. Rather than go without coverage, Brevetti paid to obtain disability insurance for that period using his own funds. On January 22, 2003, Brevetti resigned his employment with Jacobowitz's medical practice under protest. Jacobowitz's medical practice did not provide any severance pay to Brevetti.
Jacobowitz's reply to Brevetti's counterclaims and answer to Brevetti's third-party complaint consists mostly of general denials. On June 29, 2016, a note of issue was filed with the KCCO.
THE TRIAL
At the outset of the trial, NYCS made it clear that it was only going forward on its claim for liquidating damages based on Brevetti's alleged breach of the restrictive covenant provision of the contract. NYCS abandoned its causes of action for injunctive relief, imposition of a constructive trust and for an accounting.
The issues in this action were tried before Part 52 of this Court without a jury on October 23, 2017, October 24, 2017 and March 6, 2018.
NYCS rested its direct case against Brevetti on October 24, 2017. Thereafter Brevetti moved pursuant to CPLR 4401 for a directed verdict dismissing NYCS's complaint for failing to make prima facie showing that Brevetti breached the contract.
UNDISPUTED FACTS
Jacobowitz, acting as the principal of NYCS and as the owner of Isreal J. Jacobowitz, M.D., P.C., entered into an employment agreement (the contract) with Brevetti for his services as a cardiothoracic surgeon. Among other things, the employment agreement called for Isreal J. Jacobowitz's medical practice to pay Brevetti a specific annual salary commencing on October 2001 with scheduled increments occurring each October through and including October of 2004. The employment agreement also contained a restrictive covenant. Sometime before October 2002, Jacobowitz told Brevetti that he could no longer afford to pay him at the contracted upon salary for the second year commencing in October of 2002. Jacobowitz then followed up by not increasing Brevetti's annual salary and by not providing other components of compensation required under the contract. The employment agreement was not renegotiated, rewritten, modified or reformed by the parties.
Jacobowitz's statement to Brevetti followed by his failure to increase Brevetti's salary effective October 2002 amounted to an anticipatory breach of the contract.Jacobowitz's anticipatory breach rendered the restrictive covenant of the contract unenforceable as against Brevetti.
When a party benefitting from a restrictive covenant in a contract breaches that contract, the covenant is not valid and enforceable against the other party because the benefitting party was responsible for the breach ( Elite Promotional Mktg., Inc. v. Stumacher , 8 AD3d 525 [2nd Dept 2004], citing DeCapua v. Dine-A-Mate, Inc., 292 AD2d 489 [2nd Dept 2002] ).
NYCS's only cause of action was for liquidating damages based on Brevetti's alleged breach of the restrictive covenant of the contract. After NYCS rested on October 24, 2017, and based on the foregoing undisputed facts, the Court finds that NYCS has failed to make a prima facie showing that Brevetti breached the employment agreement. Consequently, the Court grants Brevetti's motion to dismiss NYCS's complaint pursuant to CPLR 4401. Furthermore, NYCS direct evidence has made out Brevetti's prima face showing that NYCS has breached the agreement.
Jacobowitz and Brevetti both testified. Jacobowitz introduced eight items into evidence consisting of two employment agreements, four letters, a memo and copies of a business card. Brevetti introduced eight items into evidence consisting of two employment agreements, a schedule, copies of pay stubs, and copies of his 2003, 2004 and 2005 tax returns.
Pursuant to CPLR 4213 the parties were afforded an opportunity to submit proposed findings of fact and in fact did so. The Court has made the following additional findings of fact.
FINDINGS OF FACT
On October 8, 2002, Brevetti, a cardiothoracic surgeon, entered into a written contract with NYCS. Although two contracts were submitted to and signed by Brevetti, the first on October 8, and the other on October 12, 2001, for the foregoing reasons, the October 12, 2001, is the controlling contract. Brevetti signed each of the contracts before Jacobowitz did so. After signing the first contract, Jacobowitz realized that signing on behalf of Isreal J. Jacobowitz, M.D., P.C was an error, since, among other things, the M.D., P.C. no longer existed. Jacobowitz then signed the October 12, 2001 contract on behalf of the NYCS. The change to add NYCS on the October 12, 2001 contract was handwritten in by Jacobowitz with no objection by Brevetti. The only significant, substantive difference between the two contracts was that the October 8 contract was signed by Isreal J. Jacobowitz as president of Isreal J. Jacobowitz, M.D., P.C. and the October 12, 2001 contract was signed by Isreal J. Jacobowitz, M.D., P.C. as president of NYCS.
The contract was for a four-year term and provided, among other things, that Brevetti would be paid an annual base salary according to the following schedule: $225,000.00 from October 2001 to September 2002; $300,000.00 from October 2002 to September 2003; $400,000.00 from October 2003 to September 2004, and $437,000.00 from October 2004 to September 2005.
SUNY Downstate Medical Center (SUNY Downstate), was to pay Brevetti $25,000.00 a year which would be applied against the yearly base salary that Jacobowitz's medical practice was contractually obligated to pay him. During October and November 2002 Jacobowitz's medical practice paid Brevetti $16,667.00 monthly. In December of 2002, Jacobowitz's medical practice paid Brevetti $1,667.00 for that month and nothing thereafter. Based on Jacobowitz's breach of the contract, Brevetti sent a letter of resignation to Jacobowitz by facsimile transmission on January 22, 2003, to take effect immediately.
Paragraph 13, Subsection C of the employment contract stated that Brevetti would be provided disability insurance. The pertinent text set forth the following language: "The P.C. shall provide the Employee with disability insurance, whereby the disability insurance benefits will require a (60) day disability waiting period before benefits are payable."
Brevetti purchased disability insurance at his own expense at a cost of $2,895.79 in 2002 because Jabobowitz's medical practice did not provide him with disability insurance benefits.
Paragraph fourteen of the employment agreement set forth the circumstances in which the agreement could be terminated and the consequence of the termination. Section (a) gave Jacobowitz the right to terminate Brevetti's employment if he did not diligently pursue and successfully obtain board certification as a Diplomat of the American Board of Thoracic Surgery. Section (b) gave both Jacobowitz and Brevetti the right to terminate the employment agreement without cause after the first anniversary date of the employment agreement upon the giving of 120 days written notice to the other party. Section (c) gave Jacobowitz the right to terminate the employment agreement without notice upon the occurrence of any one of seven triggering events. The triggering events were Brevetti's: (1) death; (2) disability under certain circumstances; (3) disqualification to practice medicine; (4) failure to cure a material breach of the employment agreement within certain designated time frames, (5) conviction of a misdemeanor involving moral turpitude or felony; (6) embezzlement from Jacobowitz's practice; and (7) conduct involving professional misconduct rendering Brevetti's continued presence detrimental to the practice.
Jacobowitz did not give Brevetti written notice of the intention to terminate his employment. Instead Jacobowitz unilaterally breached the contract by not compensating Brevetti in accordance with its terms. In fact, in January of 2003, Jacobowitz paid Brevetti $1,667.00, less than one tenth of what he was due under the contract. Rather than abiding Jacobowitz's breach of the contract and the dramatic reduction of his income, Brevetti gave Jacobowitz written notice of his immediate resignation on January 22, 2003.
LAW AND APPLICATION
Brevetti's six counterclaims asserted against NYCS and six causes of action asserted against the Jacobowitz defendants are identical and supported by the same allegations of fact. The first is for unjust enrichment. The second cause is to recover in quantum meruit. The third is for breach of contract. The fourth is for conversion. The fifth is for fraud. The sixth is for violations of the New York State Labor Law §§ 190 - 199.
Brevetti's Quasi Contract Claims
The elements of a cause of action to recover for unjust enrichment are (1) the defendant was enriched, (2) at the plaintiff's expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered ( Deerin v. Ocean Rich Foods, LLC , 158 AD3d 603, 607 [2nd Dept 2018] ).
A plaintiff's cause of action for unjust enrichment may not be maintained if a valid contract governing the subject matter actually exists. Under such circumstances, recovery in quasi contract for events arising out of the same subject matter are generally precluded (see CSI Group, LLP v. Harper, 153 AD3d 1314 at 1317 [2nd Dept 2017], citing EBC I, Inc. v. Goldman, Sachs & Co., 5 NY3d 11, 23 [2005] ; Clark—Fitzpatrick, Inc. v. Long Is. R.R. Co. , 70 NY2d 382, 388 [1987] ).
The Court finds that the subject matter of Brevetti's counterclaim and third-party causes of actions against NYCS and the Jacobowitz defendants arises from their alleged breach of the employment agreement and the ensuing damages caused by the breach. The Court further finds that there is a valid contract governing the subject matter. Accordingly, Brevetti's claim in quasi contract for recovery under the theory of quantum meruit and unjust enrichment are both precluded (Id. ).
Brevetti's Conversion Claim
A conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person's right of possession ( Petrone v. Davidoff Hutcher & Citron, LLP , 150 AD3d 776, 777 [2nd Dept 2017], citing C & B Enters. USA, LLC v. Koegel , 136 AD3d 957, 958 [2nd Dept 2016] ). Two key elements of conversion are (1) plaintiff's possessory right or interest in the property and (2) defendant's dominion over the property or interference with it, in derogation of plaintiff's right ( Petrone v. Davidoff Hutcher & Citron, LLP , 150 AD3d 776, 777 [2nd Dept 2017], citing Colavito v. New York Organ Donor Network, Inc. , 8 NY3d 43, [2006] ).
Money, if specifically identifiable, may be the subject of a conversion action ( Petrone v. Davidoff Hutcher & Citron, LLP , 150 AD3d 776, 777 [2nd Dept 2017], citing Simpson & Simpson, PLLC v. Lippes Mathias Wexler Friedman LLP, 130 AD3d 1543, 1544—1545 [4th Dept 2015] ). However, the mere right to payment cannot be the basis for a cause of action alleging conversion since the essence of a conversion cause of action is the unauthorized dominion over the thing in question ( CSI Group, LLP v. Harper, 153 AD3d 1314, 1320-1321 [2nd Dept 2017], citing Daub v. Future Tech Enter., Inc., 65 AD3d 1004, 1006 [2nd Dept 2009] ). In other words, tangible personal property or specific money must be involved ( CSI Group, LLP v. Harper, 153 AD3d 1314, 1320-1321 [2nd Dept 2017], citing Independence Discount Corp. v. Bressner , 47 AD2d 756, 757 [2nd Dept 1975] ).
Brevetti's claim for conversions against NYCS and the Jacobowitz defendants is also premised on their failure to pay or the wrongful withholding of the money he was contractually due as compensation for his employment services under the contract. Brevetti's theory of recovery and supporting evidence does not establish his possessory right or interest in some specific identifiable fund of money. Nor does it establish that NYCS or the Jacobowitz defendants exercised dominion over some specific identifiable fund in derogation of Brevetti's rights. Accordingly, Brevetti's claims asserted against NYCS and the Jacobowitz defendants for conversion are dismissed ( Petrone v. Davidoff Hutcher & Citron, LLP , 150 AD3d 776, 777 [2nd Dept 2017], citing Simpson & Simpson, PLLC v. Lippes Mathias Wexler Friedman LLP, 130 AD3d 1543, 1544—1545 [4th Dept 2015] ).
Brevetti's Fraud Claim
The elements of a cause of action to recover damages for fraud are a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages ( Seidenfeld v. Zaltz, 162 AD3d 929 [2nd Dept 2018] ). Brevetti's claim for frauds against NYSC and the Jacobowitz defendants is premised, inter alia, on their failure to pay or the wrongful withholding of the money he was contractually due as compensation for his employment services under the contract. His claim for breach of contract and his claim for fraud are based on the identical circumstances. Brevetti contends that NYCS and the Jacobowitz defendants fraudulently entered into the contract while lacking the intent to fully perform. Brevetti's evidentiary submission, however, do not establish or demonstrate that any fraudulent misrepresentation resulted in any loss independent of the damages allegedly incurred for breach of contract ( Pugni v. Giannini, 163 AD3d 1018 [2nd Dept 2018], citing Introna v. Huntington Learning Ctrs., Inc. , 78 AD3d 896, 898 [2nd Dept 2010] ). In any event, general allegations that a defendant entered into a contract while lacking the intent to perform are insufficient to support a fraud cause of action ( Pugni v. Giannini, 163 AD3d 1018 [2nd Dept 2018], citing New York Univ. v. Continental Ins. Co., 87 NY2d 308, 318 [1995] ). Accordingly, Brevetti's claims sounding in fraud are dismissed.
Brevetti's Breach of Contract Claim
To prevail on a cause of action alleging breach of contract, a plaintiff must demonstrate that it sustained actual damages as a natural and probable consequence of the defendant's breach ( Family Operating Corp. v. Young Cab Corp., 129 AD3d 1016 [2nd Dept 2015], citing Rakylar v. Washington Mut. Bank , 51 AD3d 995, 996 [2nd Dept 2008] ). As previously indicated, there is no dispute that NYCS and the Jacobowitz defendants breached the contract by not paying Brevetti the compensation that he was due under the terms of the contract. Brevetti is, therefore, entitled to damages caused by the breach.
However, liability for the common law claim of breach of contract may only be enforced as against NYCS and not personally against Isreal J. Jacobowitz, given that the controlling contract was signed by Isreal J. Jacobowitz in his representative capacity on behalf of NYCS. The general rule is that a corporation exists independently of its owners, who are not personally liable for its obligations, and that individuals may incorporate for the express purpose of limiting their liability ( Vivir of L I, Inc. v. Ehrenkranz, 145 AD3d 834, 835 [2nd Dept 2016], citing East Hampton Union Free School Dist. v. Sandpebble Bldrs., Inc. , 66 AD3d 122, 126 [2nd Dept 2009] ). The concept of piercing the corporate veil is an exception to general rule that a corporation exists independently of its owners, and permits, in certain circumstances, the imposition of personal liability on owners for the obligations of their corporation (Id. ). A plaintiff seeking to pierce the corporate veil must demonstrate that a court in equity should intervene because the owners of the corporation exercised complete domination over it in the transaction at issue and, in doing so, abused the privilege of doing business in the corporate form, thereby perpetrating a wrong that resulted in injury to the plaintiff ( Vivir of L I, Inc. v. Ehrenkranz, 145 AD3d 834, 835 [2nd Dept 2016], quoting , East Hampton Union Free School Dist. v. Sandpebble Bldrs., Inc. , 66 AD3d 122, 126 [2nd Dept 2009] ).
Factors to be considered in determining whether the owner has abused the privilege of doing business in the corporate form include whether there was a failure to adhere to corporate formalities, inadequate capitalization, commingling of assets, and use of corporate funds for personal use (Id. ).
Brevetti did establish that NYCS breached the contract. However, he presented no evidence that Jacobowitz abused the privilege of doing business through NYCS in the corporate form for the purpose of perpetrating a wrong against him.
Brevetti's NewYork State Labor Law §§ 190 - 199 claim
Brevetti's claim under NewYork State Labor Law §§ 190 - 199 are premised on the failure to pay the wages he was contractually due as compensation for his employment services under the contract. Once again, Brevetti did not establish or demonstrate that any claim under New York State Labor Law §§ 190 - 199 resulted in any loss independent of the damages allegedly incurred for breach of contract ( Pugni v. Giannini, 163 AD3d 1018 [2nd Dept 2018] ).
However, unlike the common law breach of contract claim in which liability may be asserted solely against NYCS, a claim under NewYork State Labor Law §§ 190 - 199 may be asserted against an individual or an entity if they fit the definition of employers as defined in Labor Law § 190 (3). Labor Law § 190 (3) defines an employer as any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service. Courts look to a four-factor economic reality test to determine whether the definition of an "employer" under New York Labor Law has been met, namely whether the alleged employer: (1) had the power to hire and fire the employees; (2) supervised and controlled employee work schedules or conditions of employment; (3) determined the rate and method of payment; (4) and maintained employment records ( Karic v. Major Automotive Companies Inc. , 992 F.Supp.2d 196 [E.D.NY 2014] ). Brevetti established that Isreal J. Jacobowitz was his employer for the purposes of pursuing his claims for lost wages. Accordingly, NYCS, and Dr. Isreal J. Jacobowitz are both liable for Brevetti's unpaid wages pursuant to Labor Law Article 6.
Breveti's Damages
The party responsible for the damages due to Brevetti for breach of contract is NYCS. The party responsible for Brevetti's unpaid wages pursuant to Labor Law Article 6 are NYCS and Jacobowitz.
In an action to recover damages for breach of contract, the nonbreaching party may recover general damages which are the natural and probable consequence of the breach ( Crystal Clear Development, LLC v. Devon Architects of New York, P.C., 97 AD3d 716, 718 [2nd Dept 2012] ). In order to recover "special" or extraordinary contract damages that do not flow directly from the breach, however, a plaintiff is required to plead that the damages were foreseeable and within the contemplation of the parties at the time the contract was made ( Reads Co., LLC v. Katz , 72 AD3d 1054, 1055 [2nd Dept 2010] ). Reviewing the contract, the Court finds, with the exception of liquidating damages for breach of the restrictive covenant, it was the parties intent to limit damages for breach of the contract to general and not special or extraordinary damages.
Damages are intended to return the parties to the point at which the breach arose and to place the non-breaching party in as good a position as it would have been had the contract been performed ( Seidman v. Industrial Recycling Properties, Inc. , 106 AD3d 983 at 985 [2nd Dept 2013], citing Bi—Economy Mkt., Inc. v. Harleysville Ins. Co. of NY, 10 NY3d 187, 195 [2008] ). Thus, damages for breach of contract are ordinarily ascertained as of the date of the breach ( Seidman v. Industrial Recycling Properties, Inc. , 106 AD3d 983 at 985 [2nd Dept 2013], citing Rodriguez v. Moore—McCormack Lines , 32 NY2d 425, 429 [1973] ).
Brevetti's damages occurred effective October 2002, when Jacobowitz refused to raise Brevetti's annual salary from $225,000.00 to $300,000.00. The $225,000.00 total was composed of $25,000.00 from SUNY Downstate and $200,000.00 from Jacobowitz's medical practice. The failure to raise Brevetti's salary amounted to a $75,000.00 annualized loss of earning or $6,250.00 per month for every month that Brevetti was paid at the $225,000.00 annual rate.
Brevetti was paid at the $225,000.00 annual rate during October and November 2002 making his damages for the unrealized increment of his salary for this period to be a total of $12,500.00, that is, $6,250.00 per month for two months. In December of 2002, Jacobowitz only paid him $1,667.66 when he was supposed to pay him $22,916.66 monthly. Brevetti's damage for the month of December 2002 was $21,249.00, that is, $22,916.66 that he was due minus the $1,667.66 that he was paid.
Notwithstanding the fact that Brevetti resigned under protest on January 22, 2003, his resignation was brought about by Jacobowitz's breach of the contract. Brevetti was therefore entitled to his full monthly pay for the month of January 2003 in the amount of $22,916.66.
Paragraph fourteen (a) and (c) of the contract gave Jacobowitz the right to terminate Brevetti's employment for cause under certain proscribed circumstances upon written notice of his intention to do so. There is no dispute that Brevetti did not engage in any conduct warranting his termination under either subsection (a) or (c) of paragraph fourteen of the contract. There was therefore no factual basis to terminate his employment for cause. Nor is there any dispute that Jacobowitz did not give Brevetti written notice of the intention to terminate his employment.
Paragraph fourteen (b) of the contract, however, gave both Jacobowitz and Brevetti the right to terminate the employment agreement without cause after the first anniversary date of the employment agreement upon the giving of 120 days written notice to the other party.
As of January 23, 2002, the date of Brevetti's resignation, the contract had already surpassed its anniversary date of October 2003. While, indeed, Brevetti did not give Jacobowitz 120 days notice of his intention to resign, the resignation being effective immediately, so to, Jacobowitz did not give Brevetti written notice of his intention to terminate his employment. By failing to increase Brevetti's salary as agreed and by then reducing his salary by 90%, Jacobowitz actually forced Brevetti's into making the first move. Jacobowitz then commenced the instant law suit to enforce a provision in the very contract that he breached.
The measure of Brevetti's damages after his resignation in January of 2003 consist, inter alia, of the four months of severance pay contemplated by paragraph fourteen (b) of the contract. Brevetti is entitled to four months pay at the increased rate of $300,000.00 annually for a total of $91,666.64, that is $22,916.66 monthly for four months. Brevetti is also entitled to reimbursement for the cost he expended for the disability insurance benefits that Jacobowitz's medical practice failed to provide in 2002 in the amount of $2,895.79.
Brevetti's damages based on breach of the payment schedule set forth in the contract is $45,415.66, that is, the sum of $1,250.00 for the months of October and November 2002, $21,249.00 for the month of December 2002; and $22,916.66 for the month of January 2003. Brevetti's damages based on the failure to pay him four months of severance pay is $91,666.64, that is, $22,916.66 a month for four months. Brevetti's damages based on breach of the obligation to provide him with disability insurance is $2,895.00, the cost of reimbursing him his expenditure for disability insurance coverage in 2002. Accordingly, Brevetti's total damages for breach of the aforementioned provisions of his contract totals $139,997.30.
CPLR 5001 (a) provides that interest shall be recovered upon a sum awarded for a breach of contract. CPLR 5001 further mandates that interest shall be computed from the earliest ascertainable date the cause of action existed ( CPLR 5001 [b] ). Where such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date ( CPLR 5001 [b] ) ( Kachkovskiy v. Khlebopros, 164 AD3d 568 [2nd Dept 2018], citing Baer v. Anesthesia Assoc. of Mount Kisco, LLP , 57 AD3d 817, 819 [2nd Dept 2008] ). CPLR 5001 further provides that the date from which interest is to be computed shall be specified in the verdict, report or decision ( CPLR 5001 [c] ). The Court sets January 22, 2003, as the single reasonable intermediate date that interest shall be recovered upon the sum of $139,007.30 awarded due to the breach.
Brevetti's Claim for Attorney's Fees
Brevetti seeks attorney's fees based on his successful enforcement of the contact. Section 24 (d) of the contract provides as follows:
Attorneys Fees and Costs: It is agreed that if either party breaches or threatens to breach any terms, conditions or provisions of this agreement, the party who prevails during any proceeding (whether for interim or final relief) brought to enforce this agreement or prevent any threatened breach hereof, shall be entitled to recover from the other party all fees together with attorneys fees and costs incurred as a result of any such breach or threatened breach.
By the instant decision and order after a non-jury trial, Brevetti has indeed prevailed in enforcing the contract and is therefore entitled to attorney's fees. This aspect of Brevetti's damages, however, will be handled in a separate proceeding. Brevetti is directed to serve on or before October 24, 2018, an affidavit or affirmation setting forth the attorney fees incurred in defending and prosecuting the instant actions upon counsel for NYCS and Dr. Isreal J. Jacobowitz. Counsel to NYCS and the Jabowitz defendants may serve opposition on Brevetti's counsel on or before November 9, 2018. The parties must then appear on November 27, 2018 for further proceedings on the issue of Brevetti's request for attorney's fees. The Court will issue a decision, order and judgment after resolution of the issue of Brevetti's attorney fees.
The foregoing constitutes the decision and order of this Court.