Court Opinion

ID: 5944576
Source: CourtListenerOpinion
Date Created: 2022-01-13 05:57:27.815802+00
Date Added: 2024-06-11T08:47:23.514077
License: Public Domain

Kupferman, J.
(dissenting in part). The only issue that divides us is the right of the plaintiff to claim attorneys’ fees and an additional 25% of wages due in liquidated damages on his second and fourth causes of action. (Labor Law § 198 [1-a].)
This depends on whether there was a "willful” failure to pay "the wage” required.
The IAS court based its decision, as delineated in our majority opinion, on an exclusion for "commission salesman”. (Labor Law § 190 [6].)
However, my conclusion is based on the special arrangement of the employment agreement, which I set out in full.
"Your compensation will be based upon the gross proceeds of Syndications during each employment year based on the annual anniversary of your employment which is expected to commence May 16, 1983 (but not including the Syndication of the following transactions: Talcott, Related Rural IV, RKC Tribune and Granada), on the following basis: 5/16 of 1% of the first $50 million of Syndication proceeds; 3/16 of 1% of the next $50 million of Syndication proceeds; and 1/4 of 1% of any excess over $100 million of syndication proceeds. Your commissions will be based upon the gross amount of capital contributions paid or agreed to be paid by investors, without any reduction for expenses of Syndication, underwriters commissions, expenses of the marketing company, or any other *62expenses, but reduced in certain instances by 'present value’ calculations, as set forth below. For those Syndications where deferred payments of investor capital contributions bear interest, gross syndication proceeds shall not include any amounts paid as interest.
"For purposes of reflecting the results of Syndications on our combined financial statements, we reduce deferred payments of investor capital contributions which do not bear interest by discounting the same to 'present value’ with an interest rate of one percentage point in excess of the prime rate of Chemical Bank, New York, New York. If Syndication proceeds in any employment year do not exceed $100 million (i.e., your compensation based on the formula in the preceding paragraph is not more than $250,000) then your commissions will be based upon the undiscounted amount of Syndication proceeds. However, if Syndication proceeds in any employment year exceed $100 million (i.e., except for the adjustment set forth below, your compensation would be greater than $250,000), then an appropriate adjustment shall be made so as to base your compensation upon the present value of the non-interest bearing portion of Syndication proceeds but not in an amount which would reduce your compensation below $250,000 employment per year.
"For example, if Syndication proceeds, without present value calculations, were $150 million, but the present value thereof were $120 million, then your compensation for the employment year would be $300,000, irrespective of whether those Syndications which were discounted were among the first $100 million during the employment year or among the last $50 million.
"You shall have a draw against your commission at the rate of $80,000 per year, paid bi-weekly at the same time and on the same basis as all other Related executive personnel. As an additional draw against your commission, we shall make payments on your present automobile lease.
"The above commissions will be payable, balancing against your draw, within 30 days after the end of each employment year quarter, with respect to Syndications which have closed during the quarter then ended. However, there shall be no payments made at the end of the first or second quarters of your first employment year; instead, within 30 days after the end of the third quarter payment will be made with respect to the first two quarters, and within 30 days after the end of *63your first employment year payment will be made with respect to the last two quarters of such year. If your employment with us is terminated prior to the end of nine months, you shall not be entitled to receive any of the commissions set forth above, but shall receive only your draw. However, after the first nine-month period you shall be deemed to have earned your commissions irrespective of when they are to be paid. Either you or we may terminate your employment with us at any time for any reason or for no reason and neither of us shall have any liability to the other on account of such termination, except that we shall owe you commissions earned to the extent set forth above.
"The payment of your commissions will be subject to the additional condition that with respect to the amounts earned by you in any employment year we need pay you on a cumulative basis in respect of such year, and no later than 30 days after the end of the year, only $150,000. We may delay payment of any additional earnings up to $250,000 for up to one additional year, additional earnings between $251,000 and $350,000 for up to two additional years, and above 350,000 of earnings for up to 3 additional years, to the extent that we in our sole discretion determine is consistent with our cash flow reequirements [sic] except that any amounts which are paid more than 120 days after the end of the employment year in which earned shall be increased by the same 'present value’ factor as was applied to Syndication proceeds on which your commissions were based.
"All amounts drawn by you during the employment year shall be applied against amounts owed to you in the order of their maturity.
"You will be given tax shelter in an amount equal to 80% of the first $250,000 of compensation and 100% of any excess actually received by you in any employment year. If we are unable to give you that amount of tax shelter, we shall instead increase your compensation on a dollar-for-dollar basis. In the event of the termination of your employment with us we shall not terminate or reduce your interest in any entity from which you were allocated taxable losses so as to cause a recapture of such losses previously allocated to you.
"In those Syndications where we or any affiliate receive an interest in sale or refinancing proceeds (the 'back-end’), you shall receive a 10% interest in so much of the back-end as is allocated to the Syndication department. You shall vest in *64your interest in such back end items over a four year period, on a cumulative basis, 30% at the end of the first year, and as to each succeeding year, 30%, 20% and 20%, respectively. If your employment hereunder is terminated prior to the end of the first year, then you shall not vest at all as to back-end items, but if your employment is terminated after the first year, then in addition to any amount as to which you had vested at the end of the preceding year, you shall vest pro rata with respect to the current year, based upon the number of days in the current year before your employment terminated. After you have been employed by us for four years, you will vest immediately in your share of the back-end of each Syndication as of the Syndication closing date.”
This was no ordinary wage arrangement. While the Labor Law provision might apply to the $80,000 draw, inasmuch as the plaintiff was employed for seven years and received $1,674,000 he has clearly received that basic amount.
The agreement cries out for interpretation. Under the circumstances, there cannot be a "willful” failure to pay "the wage” required.
I would affirm the dismissal of the second and fourth causes of action. (Cf., Magness v Human Resource Servs., 161 AD2d 418.)
Sullivan, J. P., Milonas and Wallach, JJ., concur with Asch, J.; Kupferman, J., dissents in part in an opinion, with respect to Appeal No. 1.
Order of the Supreme Court, New York County, entered January 24, 1991, granting defendants’ motion to dismiss the second and fourth causes of action of the complaint is reversed, on the law, and the motion denied, with costs and disbursements payable to plaintiff.
Order of the Supreme Court, New York County, entered June 17, 1991, which, inter alia, granted plaintiff a preliminary injunction, is reversed, to the extent appealed from, on the law and facts, and in the exercise of discretion, and the motion denied, with costs and disbursements payable to defendants-appellants. [See, — AD2d —, June 23, 1992.]