Tilchen v. CEMD Elevator Corp.

CourtDistrict Court, S.D. New York
DecidedSeptember 24, 2019
Docket1:17-cv-00051
StatusUnknown

This text of Tilchen v. CEMD Elevator Corp. (Tilchen v. CEMD Elevator Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tilchen v. CEMD Elevator Corp., (S.D.N.Y. 2019).

Opinion

UNITED STATES DISTRICT COURT hy Coy □□ SOUTHERN DISTRICT OF NEW YORK a eee

hee poe ye □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□ name eee, □□ TRONTCATTY BR pry | STEVEN TILCHEN, Boe □ . : : Bnet Tn gt tat ee nnn □□ □□□ □□ t i ‘ PEARSE! Ltr py, □ "Boll fF □ Plaintiff, □□ AGIT | -against- : CEMD ELEVATOR CORP. d/b/a CITY : 17 Civ. 51 (PAC) ELEVATOR, MITCHELL HELLMAN, : STEPHAN DIEMER, CARL ALONGIS, and: KONE, INC., : OPINION & ORDER Defendants. : nnn eee nee K HONORABLE PAUL A. CROTTY, United States District Judge: Plaintiff Steven Tilchen, worked for Defendant City Elevator in a high-paying job from 2003 to 2016. He sued City Elevator and its owners Mitchell Hellman, Stephan Diemer, and former owner Carl Alongis (collectively “Defendants”), alleging violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. 8§ 201 et seqg.; New York Labor Law (“NYLL”); for unlawful wage deductions; failure to pay earned commissions; failure to pay overtime; failure to provide appropriate records; retaliation, as well claims under New York common law for unjust enrichment and conversion. Defendants assert a counterclaim for tortious interference of contract. On May 10, 2018, the Court approved a settlement agreement between Plaintiff and Defendant Kone, and Kone was dismissed from the litigation with prejudice. (Dkt. 83.) The remaining Defendants filed their motion for summary judgment on February 5, 2019. (Dkt.

' Plaintiff filed the Second Amended Complaint on July 31, 2017, (Dkt. 54), and Defendants filed their Amended Answer with Counter-claims for tortious interference on September 7, 2017. (Dkt. 64.)

121.) Plaintiff filed a motion for summary judgment as to the tortious interference claim on February 5, 2019. (Dkt. 116.) For the following reasons, the Court GRANTS Defendants’ motion for summary judgment. The remaining state law claims and Defendants’ state law counterclaim are dismissed without prejudice. FACTUAL BACKGROUND I. The Parties Defendant City Elevator (“CEMD”) is an elevator servicing and installation company. (Nasis Ex. D at 34:2-5.) CEMD primarily sold three types of contracts: (1) service contracts, which covered routine elevator maintenance; (2) construction and modernization contracts, which covered the installation and replacement of elevators; and (3) repair contracts, which covered individual repairs. (See Hellman Aff. { 8.) Plaintiff, Steven Tilchen is a former employee of CEMD. (Nasis Ex. I at 40:21-41:11.) Plaintiff worked at CEMD in a high-paying job for thirteen years from 2003 until 2016 when Kone’, an elevator service company, purchased CEMD’s assets. (Id.) Il. Plaintiff's Duties at CEMD In 2003, Plaintiff joined CEMD as the Director of Sales and he later held the title Vice President of Sales. (Nasis Ex. I at 27:1-17.) While at CEMD, Plaintiffs duties included negotiating with CEMD’s customers, meeting clients to understand their needs, handling client relations, determining whether client problems were covered under agreements with CEMD, coordinating with departments within CEMD to ensure completion of work, following up with

2 As discussed, supra, Kone was dismissed from the litigation. (See Dkt 83.)

internal stakeholders to determine that work was completed, and reviewing invoices.’ (56.1 Stmts. Jf 81-86; Nasis Ex, I at 103:113-115; id. at 109:13-23.) Plaintiff testified that as a result of his role he was tied to the office “90 to 95%” of the time. (Nasis Ex. I at 103:12-18.) Ili. Plaintiff's Compensation While at CEMD, Plaintiff earned in excess of $100,000 annually throughout the relevant period. (See Nasis Ex. K.) Plaintiff was compensated in the form of salary and additional bonus compensation. (/d.) The additional compensation varied over the thirteen years, but paystubs reflect that approximately half of Plaintiff's compensation was labelled as “bonus” payments. (d.) It is not disputed that another salesperson who worked at CEMD, from 2012 through 2016, received compensation for sales on a commission basis. (56.1 Stmts. {[ 106; Nasis Ex. G at 13:5- 19.) This salesperson received a written commission plan and was required to submit commission statements detailing his sales to receive commissions. (Nasis Ex. G at 11:12-22; 13:9-19.) Before CEMD paid commissions to this salesperson, superiors and the accounting department had to verify the information provided in the salesperson’s commission statement. (Id.) Plaintiff, however, never submitted a commission statement to receive the “bonus” compensation he was paid during the thirteen years he worked for CEMD. (Nasis Ex. I at 229:6- 19.) In 2016, as CEMD prepared to sell assets to Kone, Plaintiff approached Defendant Hellman about commissions he believed he was owed. (See Brecher Decl. In Supp. of Pl.’s Opp’n Ex. 9 at CEMD E000006 (hereinafter Brecher Opp’n)). Emails reflect that Plaintiff provided Defendant Hellman with a figure of $1,350,000 which he believed he was owed in commissions for contracts he sold while at CEMD. (See Brecher Opp’n Ex. 9 at CEMD

3 According to Plaintiff, “[he} carried this guy’s [Hellman] business for fourteen years.” (Nasis Ex. I, at 168:19-23.}

E000008.) Defendant Hellman instructed Plaintiff to create a commission statement for those commissions. (d.) Subsequently, Defendant Hellman emailed Plaintiff saying “[o]nce we close there will be time to go through total, reconcile your commissions and settle up. Don’t forget we

are on the honor system...[w]e don’t have a contract, we have some scratch on a sticky note.” (See Brecher Opp’n Ex. 9 at CEMD E000005.) A. The “Sticky Note” Plaintiff alleges that he “never received a written commission agreement from Defendants” and that the method for earning commissions was communicated by Defendant Hellman. (SAC { 82, 83.) Nevertheless, Plaintiff now bases his claims on a handwritten note that was created during a meeting between Defendant Hellman and Plaintiff prior to Plaintiff's employment in 2003. (Pl. Opp’n at 2, Dkt 131.) The parties dispute what the handwritten note referenced. (56.1 Statements Jf 37, 40.) The unsigned, handwritten note lists “1,350 per week salary” and “150 per week for car allowance.” (Nasis Ex. J.) The note also lists the following information: “Maint 8% up to plan, 5 yrs extra 2%, every year after addition 1%,” “Repairs 3%

up to plan, 6% over plan” and “Mod/NI” “1% up to plan, and 2% over plan.” Ud.) Plaintiff testified that the percentages in the handwritten note referenced a sales plan, which Plaintiff “never saw” and “never” discussed with Defendant Hellman in the thirteen years he worked at CEMD., (id. Ex. lat 193:7-18.) Plaintiff further testified that “there was never any conversation about any sales plan,” but that he thought he would “eventually receive a plan.” (Id. Ex. I at 201:3-13; 203:3-8.) IV. Defendants’ Asset Sale to Kone Plaintiff's employment with CEMD ended when Kone purchased CEMD’s assets. (Nasis Ex. J at 338:9-14.) Plaintiff was employed by Kone from September 1, 2016 until January 9,

2017. (Ud. at 405:13.) The terms of the sale between CEMD and Kone were incorporated in the Asset Purchase Agreement (“APA”). (See Nasis Ex. P.) As part of the sale, CEMD assigned at least 276 elevator contracts to Kone. (See id.; Brecher Decl. in Supp. of P1.’s Mot. for Summ. J. Ex. 2 at KONE00082-89.) The APA provided that CEMD would be responsible for contracts cancelled within the first year of the sale to Kone. (See Nasis Ex. P.) After departing from CEMD, Plaintiff continued to contact Defendant Hellman. (See Nasis Ex. N at 2:3-13.) Plaintiff’s lawyer sent a letter, dated November 17, 2016, to Defendants regarding Plaintiff's claims for unpaid wages and his intention to commence a lawsuit. (See Brecher Ex.

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Tilchen v. CEMD Elevator Corp., Counsel Stack Legal Research, https://law.counselstack.com/opinion/tilchen-v-cemd-elevator-corp-nysd-2019.