Court Opinion

ID: 4085807
Source: CourtListenerOpinion
Date Created: 2016-10-08 00:03:22.656152+00
Date Added: 2024-06-11T07:45:24.260128
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

695
CA 11-02579
PRESENT: SMITH, J.P., FAHEY, PERADOTTO, SCONIERS, AND MARTOCHE, JJ.

REGENT FINANCIAL GROUP, LLC,
PLAINTIFF-RESPONDENT,

                    V                             MEMORANDUM AND ORDER

ROSALEE BEDIAN, DEFENDANT-APPELLANT.

ADAIR LAW FIRM, LLP, ROCHESTER (DONALD R. ADAIR OF COUNSEL), FOR
DEFENDANT-APPELLANT.

PHETERSON & PHETERSON, ROCHESTER (IRVING PHETERSON OF COUNSEL), FOR
PLAINTIFF-RESPONDENT.

     Appeal from a judgment of the Supreme Court, Monroe County
(Kenneth R. Fisher, J.), entered March 16, 2011. The judgment awarded
plaintiff the sum of $78,460.34 against defendant.

     It is hereby ORDERED that the judgment so appealed from is
unanimously vacated and the order entered March 7, 2011 insofar as
appealed from is reversed on the law, that part of plaintiff’s motion
for summary judgment on the first cause of action is denied and that
part of defendant’s cross motion for leave to amend her answer to
assert a counterclaim for misrepresentation is granted, and as
modified the order is affirmed without costs.

     Memorandum: Defendant appeals from a judgment that brings up for
review the underlying order that, inter alia, granted those parts of
plaintiff’s motion to dismiss the counterclaims and for summary
judgment on the first cause of action in this breach of contract
action, and denied that part of defendant’s cross motion for leave to
amend her answer. As limited by her brief, defendant contends that
Supreme Court erred in granting that part of plaintiff’s motion for
summary judgment on the first cause of action, and in denying that
part of her cross motion seeking leave to amend her answer to assert a
counterclaim alleging misrepresentation. We agree with defendant.

     The record establishes that defendant worked for a period of time
as a representative of plaintiff, a financial services company.
Pursuant to an agreement that was never executed, plaintiff initially
paid defendant $130,000 per year in monthly installments in
anticipation that defendant would earn commissions from her work that
would meet and even exceed what she was paid. After a series of
events that included the reduction by plaintiff of defendant’s monthly
draws and the imposition of a condition barring defendant from
                                 -2-                           695
                                                         CA 11-02579

engaging in outside employment, defendant eventually ended her
employment with plaintiff. Plaintiff thereafter commenced this action
seeking to recover unearned commissions that had been paid to
defendant, totaling $64,099.98.

     We agree with defendant that the court erred in granting that
part of plaintiff’s motion for summary judgment on the first cause of
action, upon determining that there was an enforceable “special
agreement” that obligated defendant to repay unearned commissions to
plaintiff. The court properly concluded that enforcement of the
unsigned agreement in its entirety was barred by the statute of frauds
(see General Obligations Law § 5-701 [a] [1]). Moreover, the court
properly recognized that “no recovery can be had for the excess of
advances over commissions in the absence of an agreement, express or
implied, by the agent or employee to repay such excess” (Nationwide
Mut. Ins. Co. v Timon, 9 AD2d 1018; see Kleinfeld v Roburn Agencies,
Inc., 270 App Div 509, 511). The court erred, however, in determining
that defendant had entered into a separate binding “special agreement”
that obligated her to repay unearned commissions. According to the
court’s reasoning, the one-term “special agreement” was enforceable
based on defendant’s acknowledgment of that term, despite the
applicability of the statute of frauds to the agreement as a whole as
well as the fact that plaintiff relied on the statute of frauds to
avoid all other terms of the parties’ unsigned agreement with the
exception of that same term, obligating defendant to repay unearned
commissions. Although a party’s “admission of the existence and
essential terms of [an] oral agreement [would be] sufficient to take
the agreement outside the scope of the statute of frauds” (Binkowski v
Hartford Acc. & Indem. Co., 60 AD3d 1473, 1474 [internal quotation
marks omitted]), here plaintiff sought to enforce only one term of the
oral agreement, while refusing to acknowledge all of its “essential
terms” (Concordia Gen. Contr. v Peltz, 11 AD3d 502, 503). Because
there was no special agreement independent of the other elements of
the parties’ otherwise unenforceable oral agreement, the court erred
in granting that part of plaintiff’s motion for summary judgment on
its first cause of action, seeking repayment of unearned commissions.
In any event, even assuming, arguendo, that plaintiff established the
existence of an enforceable “special agreement,” we conclude that
defendant raised an issue of fact with respect to whether she was
liable for the repayment of unearned commissions (see generally
Zuckerman v City of New York, 49 NY2d 557, 562).

      We further conclude that the court erred in denying that part of
defendant’s motion for leave to amend her answer to assert a
counterclaim alleging misrepresentation by plaintiff. To the extent
that plaintiff alleges the existence of an enforceable “special
agreement” obligating defendant to repay unearned commissions, we
conclude that defendant is entitled to assert as a counterclaim that
she was induced to enter into that agreement as the result of
misrepresentations made by plaintiff’s principal (see generally
Deerfield Communications Corp. v Chesebrough-Ponds, Inc., 68 NY2d 954,
956).
                          -3-                  695
                                         CA 11-02579

Entered:   July 6, 2012         Frances E. Cafarell
                                Clerk of the Court