Court Opinion

ID: 5797647
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:21:32.137734+00
Date Added: 2024-06-11T08:42:28.612856
License: Public Domain

Kupferman, J.
In 1974, when David Jonas (Jonas) entered into an agreement to be the personal manager (cf. General Business Law, § 171, subd 7) of Frederick Pruetzel also known as Freddie Prinze (Prinze), a performer in the entertainment field, Prinze was over the age of 18 but under 21. This brought into play section 3-101 of the General Obligations Law (derived from the Debtor and Creditor Law):
"§ 3-101. Infants’ contracts; when they may not be disaffirmed.
"1. A contract made by an infant after he has attained the age of eighteen years may not be disaffirmed by him on the ground of infancy, where the contract was made in connection with a business in which the infant was engaged and was reasonable and provident when made.
"2. In any action or proceeding in which the right to disaffirm on the ground of infancy a contract made by an infant after he has attained the age of eighteen years is in issue, the burden of proof on the question whether the contract was made in connection with a business in which the infant was engaged, and also on the question whether the contract was reasonable and provident when made, shall be upon the person seeking to deny or defeat such disaffirmance or to enforce the contract.”
There is another statute covering performers who are minors of any age in which provision has been made for judicial approval in order to avoid later disaffirmance. (General Obli*317gations Law, § 3-105, formerly Domestic Relations Law, § 74.) However, no such contract may be approved if its term "including any extensions thereof by option or otherwise, extends for a period of more than three years from the date of approval” (§ 3-105, subd 2, par d). This statute is based on the California experience since 1927 with employment of infants for entertainment purposes, where, to avoid future conflict, the agreements are approved in advance. (1961 Report of NY Law Rev Comm, p 255; NY Legis Doc, 1961, No. 65 [I].)
The agreement in question was submitted to the Surrogate who did not approve it. It may very well be that the failure to approve was due to the fact that, while the term of the agreement was for three years, it provided for an option for an additional four years if the earnings of Prinze exceeded $50,000 (the figure in the amended version of the agreement).
The purpose of the provision limiting the right of the court to approve in advance an agreement of a minor that exceeds the term of three years, was to limit this anticipatory approval to a contractual period "in which the infant’s development and his future needs and capabilities are reasonably foreseeable.” (1961 Report of NY Law Rev Comm, p 257; see, also, Bright Tunes Prods. v Lee, 43 Misc 2d 21, 23.)
The agreement between the parties contained the arbitration provision set forth in the dissenting opinion.
The matter therefore resolves itself into two issues: one, whether, as the dissent would have it, any agreement by an infant (over the age of 18 but under 21) for a term longer than three years, is automatically proscribed for all purposes; and two, whether arbitration has any place when there is a question as to the validity of such a contract.
Obviously, the court may not approve in advance, under the legislative mandate, any agreement with a minor for a term longer than three years from the "date of approval”. However, that does not of itself mean that the agreement is invalid where the minor is over the age of 18 at the time of execution, especially when tested as of the time of disaffirmance, which in this case took place in 1974, in the very year of the making of the contract. Subdivision 2 of section 3-101 of the General Obligations Law provides that the burden as to the reasonableness of a contract will be upon the person seeking to enforce it, in this case Jonas, the personal manager. One facet to be considered on the question of reasonableness will be the length of the contract (cf. De Haviland v Warner Bros., 67 Cal *318App 2d 225; Ketcham v Hall Syndicate, 37 Misc 2d 693, 696), although also to be taken into account is the fact that the option to extend the three-year term requires earning of $50,000 in the last year of the term before it can be extended. Subdivision 2 of section 3-101 stands on its own footing and is not foreclosed by the three-year provision of subdivision d of section 3-105.
In determining the reasonableness of the agreement it is in order to scrutinize the entire transaction. (See Mandel v Liebman, 303 NY 88, 93.) The arbitration clause is perfectly proper and is to be enforced. (Matter of Weinrott [Carp], 32 NY2d 190.)
Accordingly, the judgment of the court at Special Term (Sarafite, J.) which denied the petition for a stay of arbitration pursuant to CPLR 7503 (subd [b]) should be affirmed without costs.