Kolchins v. Evolution Markets, Inc.

128 A.D.3d 47, 8 N.Y.S.3d 1
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 2, 2015
Docket653536/12 12100
StatusPublished
Cited by48 cases

This text of 128 A.D.3d 47 (Kolchins v. Evolution Markets, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kolchins v. Evolution Markets, Inc., 128 A.D.3d 47, 8 N.Y.S.3d 1 (N.Y. Ct. App. 2015).

Opinions

OPINION OF THE COURT

Renwick, J.

This breach of contract action stems from plaintiff Andrew Kolchins’s employment with defendant Evolutions Markets, Inc. The most recent employment agreement commenced on September 1, 2009 and ended on August 31, 2012. Before its expiration, the parties engaged in correspondence with regard to an extension of the agreement. The question for our determination is whether the parties’ emails and other correspondence can be viewed as constituting a binding offer and acceptance of an extension of the 2009 employment agreement, [50]*50such that in the absence of a formal contract they created a legally enforceable contract. Because we find that the documentary evidence does not utterly refute plaintiffs factual allegations that the parties reached an agreement on the material terms of a contract renewal, we conclude that Supreme Court properly denied defendant’s motion, pursuant to CPLR 3211 (a) (1), to dismiss the first cause of action for breach of contract.

Factual Background

The international finance firm of Evolutions Markets, Inc. structures transactions and provides brokerage and advisory services in the global environmental and energy commodities marketplace. Plaintiff joined defendant in 2005. In 2006, the parties entered into a three-year employment agreement dated September 1, 2006. Over the course of his tenure with defendant, plaintiff came to manage defendant’s renewable energy market group.

On August 31, 2009, the parties executed the 2009 employment agreement covering the three-year period ending on August 31, 2012. The 2009 agreement provided for plaintiff to receive a base salary of $200,000 per year, and for plaintiff to receive a number of bonuses. Among these was a “Sign On Bonus” of $750,000, payable in three installments, with $300,000 due within 10 days of the employment agreement start date and equal installments of $225,000 due on the first and second anniversaries of the start date. The 2009 agreement also provided for plaintiff to participate in a production bonus of at least 55% of net earnings received by plaintiffs group, paid on a trimester basis, payable “within two months of the close of a given trimester.”

The third significant provision in the 2009 employment agreement was the special noncompete payment. This payment provision was triggered if plaintiff were terminated by defendant “without cause” or quit his employment for “Good Reason” at any time prior to termination of the three-year period of employment. In such event, plaintiff was entitled to receive, along with his base salary and bonuses, a special noncompete payment in exchange for agreeing not to work “for a Competitor” for a period of six months after his termination or resignation. The special noncompete payment was to be made “on the firm-wide bonus payment dates following receipt of funds by [defendant],” with any such payments “calculated consistent with the calculation of [plaintiffs] bonus compensation during [51]*51the last trimester [he was] an employee of [defendant].” The “Special Non-Compete Payment” was defined as “bonus compensation in respect of transactions: (i) that [plaintiff] brokered during the period of [his] employment and (ii) for which any contingency associated with [defendant’s] right to receive payment is satisfied during the Non-Compete Period.”

The fourth significant provision of the 2009 employment agreement was the guarantee payment. As the label indicates, this provision guaranteed that plaintiff would receive a minimum combined base salary and bonus for each year of the contract of no less than $750,000. If such combined bonus and salary did not reach the $750,000 threshold for a specific year, the difference would constitute a “Make Whole Payment” due to plaintiff at the end of each year. The guarantee calculation, however, did not include the “Sign On Bonus.” In addition, the provision contained a “For the avoidance of doubt” clause, which provided that, unlike the other bonuses, the bonus that plaintiff would earn during the second trimester of the 2009 employment agreement would not count toward the computation of the guarantee payment. On the other hand, any amounts payable to plaintiff under the special noncompete payment would count toward the computation of the guarantee compensation for the last year of the contract ending on August 31, 2012.

Finally, the 2009 agreement stated that, “[e]xcept as provided above with respect to the Sign On Bonus and Special Non-Compete Payment, in order to be eligible to receive any Production Bonus ... or Guaranteed Compensation, [plaintiff] must be actively employed by [defendant] at the time of [its] firm-wide bonus payment dates.” Likewise, the agreement stated, plaintiff “will not be eligible to receive any such bonus or Guaranteed Compensation if [he had] already given notice of [his] intention to resign.”

On June 15, 2012, towards the end of the 2009 agreement, defendant’s CEO, Andrew Ertel, sent plaintiff an email captioned “In writing,” which stated:

“The terms of our offer are the same terms of your existing contract (other than a clarification around the issue of departed members of the team), and include:
“3 year term
“$200,000 base salary
[52]*52“$750,000 sign on bonus ($300,000 payable upfront, $225,000 payable on 1st and 2nd anniversaries)
“$750,000 per year minimum cash compensation
“production bonus pool of 55% of net earnings of [renewable energy] desk.
“Any further questions, let me know but u do have your existing contract.”

On July 16, 2002, plaintiff replied to Ertel’s June 15 email, stating, in full, “I accept, pl[ease] send contract.” Ertel immediately replied, stating, in full, “Mazel. Looking forward to another great run.”

On July 20, 2012, defendant’s general counsel Benjamin Zeliger emailed plaintiff a “clean and marked draft of [his] new employment agreement.” Zeliger stated that “[m]ost of the changes are simply updates to dates and your role as [director] of the [renewable energy] business.” Zeliger noted two “substantive changes,” however. The first of these proposed changes was that plaintiff repay any year’s installment of the sign on bonus if he quit “without Good Reason or [were] terminated for Cause” in that year. Zeliger asserted that this “clawback” provision was now standard company policy in order to “protect the company from paying a sign on bonus and then having the employee quit after receiving it.” The second change related to “clarifying language regarding the retention of desk employee bonuses if the employees are no longer with [defendant].”

A few minutes later, plaintiff responded, “I will review and provide my initial feedback before sending to counsel. I will just want reciprocal language pertaining to clawback prob [sic]. If you fire me [without] cause I get the full sign-on bonus.” Zeliger replied, “[T]hat protection is already in there for you.”

On July 24, 2012, Zeliger emailed plaintiff a “revised” “draft.” Zeliger stated that he had “agreed to make several changes that [plaintiff] requested,” including “[specifying that [plaintiff] shall be a member of the management committee,” reducing the number of people to whom plaintiff had to report on certain issues, and “[specifying” plaintiffs power to effect a “management override” relating to bonuses for departed employees.

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Cite This Page — Counsel Stack

Bluebook (online)
128 A.D.3d 47, 8 N.Y.S.3d 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kolchins-v-evolution-markets-inc-nyappdiv-2015.