Opinion
700014/09.
May 29, 2009.
The following papers numbered 1 to 9 read on this motion by defendants to dismiss the complaint pursuant to CPLR 3211.
PAPERS NUMBERED Notice of Motion-Affirmations-Exhibits.................. ...... 1-4 Affidavit in Opposition........................................ 5-6 Memorandum of Law.............................................. 7-8 Reply Affirmation............................................... 9 Upon the foregoing papers it is ordered that the motion by defendant to dismiss the complaint is denied for the following reasons:According to the complaint, plaintiff was employed by Castle, a restoration and construction business since about 1982, for approximately 11 years. Since June 2006, plaintiff acted as the Senior Vice-President of Castle, responsible for the company's day-to-day operations, and Robert Castaldi is the principal of Castle and the company's President. On December 5, 2009, Castaldi terminated plaintiff's employment with Castle on two weeks' notice, effective as of December 19, 2009. At the time of his termination, plaintiff's compensation included an annual salary of $120,000, as well as 1.125% of Castle's annual gross revenues. In addition, plaintiff was entitled to 20 paid vacation and personal days annually. At the time that he terminated plaintiff's employment, Castaldi told plaintiff that he would be paid the balance of the compensation owed to him by the end of the year. Following his termination of plaintiff's employment, Castaldi repeated his assurances to plaintiff that he would be paid the balance of his compensation by year-end. At the time that Castaldi terminated plaintiff's employment, Castle's gross revenues exceeded $20 million. Although Castaldi terminated plaintiff's employment on two weeks' notice, Castle paid plaintiff for only one week. At the time that his employment was terminated, plaintiff had taken only 11 of the 20 paid vacation and personal days to which he was entitled. On January 6, 2009, plaintiff wrote to Castle seeking the balance of the compensation owed to him. Notwithstanding due demand, Castle has failed to pay plaintiff the balance of his 2008 compensation, comprising one week's salary, nine vacations days, and 1.125% of Castle's gross revenues less advances taken by plaintiff during the year. On information and belief, and subject to an accounting of Castle's books and records, Castle owes Scaglione an amount to be proved at trial but believed to be approximately $100,000, plus interest from December 19, 2008.
Plaintiff has brought the instant action and seeks recovery on five causes of action: the first, breach of Contract, the second, For an Accounting, the third, Quantum Meruit, the fourth, Violation of New York Labor Law, Article 6, and the fifth, for Violation of New York Civil Rights Law, Article 5. Defendant has now moved to dismiss the complaint, pursuant to CPLR 3211 for failure to state a cause of action. Plaintiff opposes this motion.
"It is well-settled that on a motion to dismiss a complaint for failure to state a cause of action pursuant to CPLR 3211(a)(7), the pleading is to be liberally construed, accepting all the facts alleged in the complaint to be true and according the plaintiff the benefit of every possible favorable inference. (Jacobs v Macy's East, Inc., 262 AD2d 607, 608; Leon v Martinez, 84 NY2d 83.) The court does not determine the merits of a cause of action on a CPLR 3211(a)(7) motion (see, Stukuls v State of New York, 42 NY2d 272; Jacobs v Macy's East Inc., supra), and the court will not examine affidavits submitted on a CPLR 3211(a)(7) motion for the purpose of determining whether there is evidentiary support for the pleading. (See, Rovello v Orofino Realty Co., Inc., 40 NY2d 633.) The plaintiff may submit affidavits and evidentiary material on a CPLR 3211(a)(7) motion for the limited purpose of correcting defects in the complaint. (See, Rovello v Orofino Realty Co., Inc., supra; Kenneth R. v Roman Catholic Diocese of Brooklyn, 229 AD2d 159.) In determining a motion brought pursuant to CPLR 3211(a)(7), the court "must afford the complaint a liberal construction, accept as true the allegations contained therein, accord the plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal theory ." (1455 Washington Ave. Assocs. v Rose Kiernan, supra, 770-771; Esposito-Hilder v SFX Broadcasting Inc., 236 AD2d 186.)
Regarding the breach of contract cause of action, it reads as follows: "Pursuant to the employment agreement between plaintiff and Castle, plaintiff's annual compensation included (I) salary, (ii) 1.125% of Castle's gross revenues, and (iii) 20 paid vacation and personal days. Plaintiff fully performed his obligations under the employment agreement. Castle has failed and refused to pay plaintiff the agreed compensation through December 19, 2008, in an amount to be determined following an accounting but believed to be approximately $100,000. As a result of Castle's breach of the employment agreement, plaintiff has suffered damages in an amount of approximately $100,000." Defendant claims this cause of action must be dismissed because it is not clear that plaintiff alleged or can establish the existence of a binding contract. Defendant claims there was no contract and there is no duty to pay plaintiff a bonus.
The elements of a cause of action for breach of contract include: "(1) a contract; (2) performance of the contract by one party; (3) breach by the other party; and (4) damages. . ." Rexnord Holdings, Inc. v Bidermann, 21 F3d 522, 525; First Investors Corp. V Liberty Mutual Ins. Co., 152 F3d 162. The Court finds that plaintiff has sufficiently stated a cause of action for breach of contract and set forth sufficient facts concerning this cause of action. Contrary to defendants' claim, the allegations indicate that the agreement for plaintiff to receive a portion of defendant's gross revenues was not a bonus, but a set part of his compensation. Accordingly, the branch of the motion seeking to dismiss the breach of contract cause of action pursuant to CPLR 3211 (a) (7) is denied.
Regarding the cause of action for an accounting, it reads as follows: "As part of his agreed compensation, plaintiff is entitled to receive 1.125% of Castle's gross revenues. Despite due demand by plaintiff, Castle has failed and refused to pay plaintiff his share of the company's gross revenues. Plaintiff has no access to the books and records of Castle, and has no means of ascertaining the gross revenues of Castle or his share thereof. Plaintiff has no adequate remedy at law." Defendant claims that this cause of action must be dismissed because plaintiff had an employer/employee relationship with defendant that did not provide for a division of profits, and even if it was for the division of profits, there was no sharing of the losses.
The "right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest". While "[a]n employer-employee relationship providing for the division of profits will not give rise to a fiduciary obligation on the part of the employer absent an agreement to also share losses". LoGerfo v. Trustees of Columbia Univ. in City of New York, 35 AD3d 395 (2d Dep't 2006) (citations omitted.) Here, the allegations that defendant agreed to pay a percentage of gross revenues to plaintiff in reliance on an agreement, express or implied, may support a finding that defendant owed plaintiff a fiduciary obligation with respect to the allotted percentage of gross revenues. Id. Accordingly, the branch of the motion seeking to dismiss the claim for an accounting pursuant to CPLR 3211 (a) (7) is denied.
Regarding the cause of action for quantum meruit, it reads as follows: "Plaintiff performed his services to Castle in a professional manner, in good faith, and with the expectation that he would be compensated by Castle for the reasonable value of those services. Castle accepted those services, and received the benefit of those services. Castle repeatedly advised plaintiff that he would be fully compensated for his services by the end of 2008. The parties had previously agreed that the reasonable compensation for those services included (I) an annual salary of $120,000, (ii) 1.125% of Castle's gross revenues, and (iii) 20 paid vacation and personal days. The reasonable value of the services provided by plaintiff and not paid for by Castle amounts to at least $100,000. As a result of Castle's failure to compensate plaintiff for the reasonable value of his services, plaintiff has suffered damages in an amount not less than $100,000." Defendant claims this cause of action must be dismissed because plaintiff had no right to recover bonus compensation, equitable relief is not available where there is an express contract, and plaintiff was a salaried employee performing his regular duties.
To state a cause of action to recover in quantum meruit, a plaintiff must allege (1) the performance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services allegedly rendered. Tesser v. Allboro Equip. Co., 302 A.D.2d 589 (2d Dept 2003.) As stated above, plaintiff's allegations seek to recover compensation that was not part of a bonus. Moreover, since the defendant disputes the existence of an enforceable agreement, the plaintiff may proceed on both legal and equitable causes of action.LoGerfo v. Trustees of Columbia Univ. in City of New York, 35 AD3d 395 (2d Dep't 2006) Finally, it is clear that plaintiff was a salaried employee and he had a reasonable expectation that he would be compensated for the work allegedly performed. Accordingly, the branch of the motion seeking dismissal of the cause of action for quantum meruit is denied. CPLR 3211 (a)(7).
Regarding the cause of action for violations of Article 6, it reads as follows: "At all times relevant to this Complaint, plaintiff has been an "employee" within the meaning of the New York Labor Law. Upon information and belief, Castle was and is an "employer" within the meaning of the New York Labor Law. Plaintiff has demanded the compensation earned and still owed to him as Castle's employee. Castle has willfully refused to pay that compensation to plaintiff. Castle's willful failure and refusal to pay that compensation to plaintiff is a violation of the New York Labor Law. As a result of Castle's willful failure and refusal to compensate plaintiff, plaintiff has been denied wages, benefits and other compensation, and has suffered damages in an amount not less than $100,000." Defendant claims this cause of action must be dismissed with respect to the incentive compensation because such is not considered wages under the Labor Law. As stated above, plaintiff's allegations indicate that the compensation he seeks to recover were not bonus or incentive pay, but rather part of his salary. Accordingly, the branch of the motion seeking to dismiss the cause of action for violations of Article 6 is denied.
Regarding the cause of action for violations of Article 5, it reads as follows: "Castle advertises its restoration and construction services in New York at its web site, and on its web page Castle includes a photograph of plaintiff. . Also on its web page for inquiries and contacting Castle, Castle provides plaintiff's name as the point of contact. Plaintiff has never provided written consent to Castle to use his name or likeness for purposes of advertising. Since terminating plaintiff's employment, Castle knowingly continues to use plaintiff's name and likeness in marketing its services, without plaintiff's written consent. Castle's unauthorized use of plaintiff's name and likeness for purposes of advertising is a violation of the New York Civil Rights Law. As a result of Castle's unauthorized use of plaintiff's name and likeness, plaintiff has suffered damages in the amount of $100,000. As a result of Castle's knowing and intentional unauthorized use of plaintiff's name and likeness, plaintiff is also entitled to punitive damages in the amount of $100,000." Defendant claims this cause of action must be dismissed because plaintiff's likeness is presently not on the web site. Defendant also claims that any past use of plaintiff's likeness was in the course of plaintiff's employment and plaintiff was aware of this use. Defendant's allegations are not supported by sufficient evidence and, in any event, fail to set forth a claim that the allegations fail to set forth a claim for a violation of Article 5 of the New York Civil Rights Law. Accordingly, the branch of the motion seeking to dismiss the cause of action for violations of Article 5 is denied
For all of the reasons set forth above, the motion by defendant for dismissal of the complaint pursuant to CPLR 3211 is denied.