Court Opinion

ID: 5740869
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:41:27.471544+00
Date Added: 2024-06-11T08:41:04.094733
License: Public Domain

Bergan, J. (dissenting).
Plaintiff and defendants entered into two written agreements to share net profits realized by defendants in their business as electrical contractors on jobs solicited by plaintiff. One agreement was dated April 3, 1946; its successor was dated December 19, 1953.
Substantial snms were paid by defendants to plaintiff pursuant to this arrangement. This litigation arises over a job at Mt. Sinai Hospital, contract No. 078, awarded to defendant on March 12, 1952 while the first agreement was operative; substantially carried on and completed July 8,1954 during the term of the second agreement.
Plaintiff offered proof by his own testimony, corroborated in part by witnesses who had acted for the hospital, that he solicited for defendants the award of contract No. 078 and suggested modifications of the bid and other adjustments facilitating the ultimate award to defendants. For example, George M. Lindsey, an engineer employed by the firm supervising construction plans for the hospital, testified that the only contact he had with defendants “ either prior to the award, or after the award ” was through plaintiff.
Indeed, defendants offered no proof that they had solicited or obtained the contract with the hospital; and they relied on the course of entries in their own books of account to prove that this contract was not one which came .within plaintiff’s profit-sharing agreement.
The court at the end of the trial refused to send the case to the jury and dismissed the complaint. This kind of a question of fact could not be resolved by an order of dismissal; and on settled principles of law plaintiff was entitled to go to the jury on the question whether he had obtained the job for defendants *446in pursuance of the contract; or whether they had obtained it without plaintiff’s help.
The main difference of opinion in this court is concerned with the question whether there has been an account stated between the parties which had become conclusive against plaintiff’s claim for a share of contract No. 078. If this part of the case is considered from the aspect of the proof most favorable to plaintiff’s claim, as it must be in determining whether the complaint may be dismissed as a matter of law, it will be seen from the contract and the course of dealings between the parties that an account stated is not made out conclusively and that the determination of this issue turns upon questions of fact.
The agreement of April 3, 1946 provided for the payment to plaintiff of 50% of “ the net profits realized and earned” by defendant Heilman Corporation from the work solicited by plaintiff; and that ‘ ‘ adjustment and payment ’ ’ should be made in three-month periods on the basis of statements by defendants showing receipts, disbursements and ‘ ‘ net profits ’ ’. It was agreed that the statements should be accepted by plaintiff ‘ ‘ as evidence of the amount of the net profits in which he is to share ” unless he disputed the “ amount of such net profits ”, in which case he might examine the books and notify the defendants in writing of any error or dispute. If these steps were not taken successively each in 30 days, the agreement provided that “ it shall be deemed that the employee has found the statement correct ’ ’ and ‘ ‘ such statement shall be conclusively deemed correct and acceptable ’ ’ by the plaintiff and ‘ ‘ he shall have no further •claim against the employer ’ ’.
Whatever this kind of language may connote as a waiver of future rights if the prescribed procedure were not followed, the failure to follow it does not necessarily under the facts of this record spell out an account stated within familiar principles of law. The account with which these parties were concerned was the ‘1 net profits ’ ’ on the contracts at issue. The contract expressly provided that the statements were to be treated as ‘ ‘ evidence ’ ’ of the ‘ ‘ net profits ’ ’.
When jobs were completed and paid for within the period embraced by the statement its application and effect can readily be seen. But it is clear that “ net profits ” would not ordinarily be determinable in a construction job until the work was all done and all the payments and disbursements completed. Defendants’ accountant, as a witness in the case, conceded this; and it is the common understanding of ‘ ‘ net profits ’ ’.
The second and superseding agreement of December 19, 1953 was more specific about this. “ Net profits ”, it provided, shall *447be deemed to be “ Sales, less labor and material costs, and expenses directly applicable and allocatable to the job including payroll taxes, labor assessments and insurance plus a sum equal to 8% of the aforesaid described deductible items.” It is not easy to see how a statement of “ net profits” within this definition could be given before all the constituent items were known and computed.
Thus, until job No. 078 was completed and paid for the “ net ” profit earned by defendants could not be ascertained. The last item of labor on job No. 078 was performed July 8, 1954 and a final requisition for payment was made September 30, 1954.
The parties in dealing with other jobs prepared and accepted statements which seem on their face to have run currently with the jobs and apparently did not show ultimate net profits. But the effect of this is a matter for evaluation by the jury as a practical interpretation of what was intended to be in the statements.
The omission of reference to job No. 078 from statements before that job was finished could have slight effect upon the plaintiff as an account stated when the facts are looked at closely; and certainly does not amount to a conclusive bar to plaintiff’s recovery. The first statement that plaintiff received after March 12,1952, the date on which job No. 078 was obtained, was for a period ending December 31, 1953; but this was not received until March or April, 1954, two years after the job was secured.
There is proof that plaintiff promptly protested the omission of job No. 078 from that account and that defendant Theodore A. Heilman told him that he would have it added “ on to the next statement ”. If this were accepted as true by the jury it would amount to an acceptance by defendant of plaintiff’s protest and an agreement to correct it, even though normally c ‘ net profits ’ ’ would not be computable at that stage of the work.
The next succeeding statement, due June 30, 1954 was not transmitted until September 20, 1954. This made no reference to job No. 078. Within 30 days, October 19, 1954, plaintiff protested in writing the insufficiency of the statement furnished September 20,1954; noted that it did not conform to the contract and stated that plaintiff had discussed “ such omissions ” with Mr. Hertzberg. The statement of December 31, 1954 was not received until March 15,1955, and was disputed by plaintiff in a letter to defendants of March 18, 1955; and similar written dissents were made from the statements of June 30, 1955, received August 4, 1955, disputed in writing September 1, 1955; of December 31, 1955, received May 26, 1956, disputed June 19, 1956; and of December 31, 1956, received March 14, 1957, and *448disputed April 8,1957. It is very difficult to spell out an account stated as a matter of law for ‘ ‘ net profits ’ ’ in all this; and the question ought to have been determined as one of fact.
The court in dismissing the action also held that the provision of the second agreement of December 19, 1953 which contained the provision that plaintiff ‘ ‘ has no further claims of any kind whatsover ’ ’ against defendants 1 ‘ for the entire period of his employment ending December 31st, 1952 ” constituted a release n^rring this cause of action.
But it is clear in the record that the acknowledgment of the nonexistence of “further claims ” had nothing to do with job No. 078; and related to something entirely different. Further than this, a substantial part of plaintiff’s claim arose from performance of contract No. 078 long after December 31, 1952 and thus was beyond the period stated in the agreement of December 19,1953.
The merits of this litigation were for the jury and not the court; the judgment should be reversed and a new trial granted.
Breitel, J. P., and Valente, J., concur with McNally, J.; Bergan, J., dissents in opinion in which Stevens, J., concurs.
Judgment, so far as appealed from, modified, on the law and on the facts, to the extent of severing the complaint as to item three of the amended bill of particulars and ordering a new trial thereon against the corporate defendant, and, as so modified, affirmed, with costs to abide the event.