John William Costello Associates, Inc. v. Standard Metals Corp.

121 Misc. 2d 282, 465 N.Y.S.2d 382, 1982 N.Y. Misc. LEXIS 4121
CourtNew York Supreme Court
DecidedDecember 2, 1982
StatusPublished
Cited by8 cases

This text of 121 Misc. 2d 282 (John William Costello Associates, Inc. v. Standard Metals Corp.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
John William Costello Associates, Inc. v. Standard Metals Corp., 121 Misc. 2d 282, 465 N.Y.S.2d 382, 1982 N.Y. Misc. LEXIS 4121 (N.Y. Super. Ct. 1982).

Opinion

OPINION OF THE COURT

Edward J. Greenfield, J.

Plaintiff moves to dismiss defendant’s affirmative defenses and for summary judgment on its complaint. Defendant cross-moves for summary judgment.

Plaintiff, an executive search consultant, alleges that on November 17,1979, it entered into a written contract with George E. Smith (Smith) whereby it agreed to use its best efforts to contact various companies in Smith’s general line of work and to secure for him a favorable employment [283]*283contract. The agreement required Smith to pay a $9,000 fee which would be returned to Smith when plaintiff was paid a 30% finder’s fee from Smith’s new employer.

On April 2, 1980, plaintiff contacted defendant advising it of the availability of a client for possible employment. Mr. Smith’s general background and achievements were revealed but not his name. On June 2,1980, an assistant to the president of defendant called plaintiff and indicated defendant’s interest. It is averred that it was only after explanation that plaintiff expected a finder’s fee equal to 30% of the first year’s annual compensation paid and the acceptance of the fee arrangement was Smith’s name revealed. On August 7, 1980, plaintiff wrote to the assistant to the president of defendant and reiterated its fee arrangement.

On November 19,1980, defendant and Smith executed a written employment agreement which provided that Smith was to be employed starting January 1, 1981 and was to receive a first year’s salary of $100,000 plus bonus dependent on the company’s profits. On December 30, 1980, plaintiff sent defendant a statement asking for $30,000 for its partial placement fee on the $100,000 salary, and on February 11, 1981 plaintiff sent a second bill for this amount. When payment was not thereafter received, plaintiff called defendant to inquire about payment. On February 28,1981, defendant’s president wrote plaintiff denying that defendant had ever agreed to compensate plaintiff for Smith’s placement.

Plaintiff then commenced this action seeking $30,000 for breach of contract and an accounting under the first cause of action and $30,000 on an account stated under the second cause of action.

Defendant answered denying the material allegations of the complaint and asserting three affirmative defenses: first, that the complaint fails to state a cause of action; second, that the agreement is void under the Statute of Frauds (General Obligations Law, § 5-701); and third, that plaintiff is not entitled to a fee as it is not licensed as an employment agency pursuant to article 11 of the General Business Law. Each of these defenses will be discussed seriatim.

[284]*284It is clear that the complaint spells out claims for breach of contract (under the first cause of action) and for an account stated (under the second cause of action). On their face, either would support a judgment for the relief sought.

Defendant does not set forth under which subdivision of section 5-701 of the General Obligations Law it is proceeding. However, it is apparent that the only subdivision that could have any application {Hunt Personnel v Hemingway Transp., 105 Misc 2d 626; Winston Personnel Agency v Abcon Inds., 108 Misc 2d 695) is section 5-701 (subd a, par 1) of the General Obligations Law which provides in pertinent part that every agreement is void, unless it or some note or memorandum thereof is in writing, and subscribed by the party to be charged if by its terms it is not to be performed within one year from its making or before the end of a lifetime.

The essence of defendant’s argument here is that the alleged agreement between plaintiff and defendant with respect to the fee was made in the telephone call between plaintiff’s program director and the assistant to the president of defendant on June 2,1980. The fee allegedly agreed to was 30% of Smith’s total compensation for the first year of his employment, but the contract of employment between Smith and defendant provided that Smith was not to commence his duties until January 1, 1981. Thus, it is argued that since the parties could not know what the exact figure of Smith’s total compensation would be until more than one year after June 2, 1980, it would have to be in writing.

Defendant misapprehends the nature of the contract alleged between it and the plaintiff. Under the terms of the contract as alleged by plaintiff, plaintiff revealed the name and curriculum vitae of a prospective top-level executive to defendant in return for defendant’s promise to pay the agreed upon fee if and when it actually hired the named executive (Smith). Under their alleged agreement, plaintiff fully performed when it revealed the name and defendant’s obligation to pay accrued when it hired Smith. Certainly, these acts were capable of being performed, and, in fact, were performed within one year. Thus with respect to that portion of the fee allocable to Smith’s annual salary, [285]*285the fact that computation of the amount of the fee might take additional time is of no moment; it is a ministerial act. Defendant’s obligation, if there was an agreement, became fixed when it signed the employment contract with Smith.

Defendant contends, however, that the bonus portion of Smith’s annual compensation for which a fee is sought may not be calculated within one year. The bonus portion of Smith’s compensation calls for him to receive as a bonus a percentage of the net income before taxes of any business in which defendant acquires a controlling interest and which Smith brought to defendant’s attention. The bonus was to be computed on a calendar year basis. Defendant, therefore, contends that as the bonus could not be calculated until early 1982, the entire agreement must be considered indivisible and in violation of the Statute of Frauds.

Defendant cites two appellate decisions as supporting this proposition. These cases are not controlling. In Raymon Babtkis Assoc. v Tarazi Realty Corp. (34 AD2d 754) the court dismissed a complaint as violative of the Statute of Frauds, where plaintiff, a real estate broker, had secured a tenant for defendant’s premises on a 21-year lease. The broker alleged that the oral agreement provided that he was to receive a commission at the end of each year at the then real estate board’s recommended rate for the entire 21-year period. Payment of the commission was to accrue at the end of each year. There was a requirement under that contract that there be performance each year for 21 years, unlike the situation here where the obligation became payable within one year.

In Briefstein v Rotondo Constr. Corp. (8 AD2d 349), the oral employment agreement provided that plaintiff was to receive 25% of the profits at the end of the year. Under normal accounting methods, profits could not, and would not, be computed until after the one-year period and the profit sharing was not limited to one year. Further, the percentage was to be paid at the termination of employment. Hence, as the obligation could run well beyond one year, the complaint was dismissed as violative of the Statute of Frauds.

[286]*286In this case, defendant’s alleged obligation to pay plaintiff for finding a suitable executive became fixed when defendant agreed to hire him, and plaintiff in fact billed defendant for $30,000 before Smith ever started to work.

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Bluebook (online)
121 Misc. 2d 282, 465 N.Y.S.2d 382, 1982 N.Y. Misc. LEXIS 4121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-william-costello-associates-inc-v-standard-metals-corp-nysupct-1982.