Cannon v. First Nat. Bank of East Islip

• Decision Date: 05 December 1983
• Parties: Melvin R. CANNON, Respondent-Appellant, v. The FIRST NATIONAL BANK OF EAST ISLIP, etc., Appellant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 101

469 N.Y.S.2d 101

98 A.D.2d 704

Melvin R. CANNON, Respondent-Appellant, v. The FIRST NATIONAL BANK OF EAST ISLIP, etc., Appellant-Respondent.

Supreme Court, Appellate Division,

Second Department.

Dec. 5, 1983.

Wrenn & Schmid, East Islip (Joseph A. Suozzi and Leslie Kirsch, Mineola, of counsel), for appellant-respondent.

Melvin R. Cannon, respondent-appellant pro se.

Before DAMIANI, J.P., and LAZER, MANGANO and BOYERS, JJ.

MEMORANDUM BY THE COURT.

In an action to recover for legal services rendered, defendant appeals from a judgment of the Supreme Court, Suffolk County, dated April 23, 1981, which, after a nonjury trial, is in favor of the plaintiff in the principal sum of $45,676.59, with interest thereon from March 28, 1979, and plaintiff cross-appeals from so much of the same judgment as allowed interest only from March 28, 1979 and not from the dates of the respective demands for payment.

Judgment reversed, on the law and the facts, without costs or disbursements, and complaint dismissed.

On March 6, 1973, at a meeting of the defendant's board of directors, a resolution was adopted appointing plaintiff general counsel and providing that he was to be "paid $1,250.00 per month for his professional services". Although the minutes of the meeting refer to "a description of duties, responsibilities and retainer agreement on file with the President's office", no such papers have been found. Plaintiff set about his duties, rendered legal services and submitted monthly statements describing the nature of his services and the time spent on each assignment. None of these statements ever reflected any charge for additional services. The compensation received by plaintiff during his employment consisted of the monthly payments of $1,250, contingency fees he was entitled to receive in collection cases, and sums received from borrowers at mortgage closings. At a board meeting in March, 1975, plaintiff suggested that he was entitled to additional compensation beyond the stipulated monthly payments but agreed to "abide" by the chairman of the board's policy against increases for the bank staff until later in the year when the bank's financial situation might improve.

On January 2, 1976, plaintiff sent the bank president a memorandum requesting that he "recommend to the Board of Directors that General Counsel be retained for the calendar year 1976 at $25,000"--an increase of $10,000. After the board met in March, 1976 and failed to alter plaintiff's retainer agreement, plaintiff resigned as general counsel and sued for services allegedly rendered beyond the scope of the retainer agreement. Plaintiff contended that the retainer agreement covered only ordinary services and not the performance of the allegedly extraordinary services which he rendered. After a bench trial, the trial court found in plaintiff's favor, declaring that it would be unreasonable for the bank to assume that it could retain experienced counsel for only $1,250 per month and that there was no written contract of retainer between the parties. Plaintiff was awarded a judgment in the principal sum of $45,676.59. We believe reversal is mandated.

On appeal, defendant contends that plaintiff's 36 monthly reports and the description of legal services they contain established either an account stated or an accord and satisfaction barring the claims for additional compensation. Since the monthly reports contained no reference to any sums due, they did not constitute accounts stated (see Chisholm-Ryder Co. v. Sommer & Sommer, 70 A.D.2d 429, 421 N.Y.S.2d 455; Pellegrino v. Almasian, 10 A.D.2d 507, 201 N.Y.S.2d 275) and plaintiff's acceptance of the monthly payments did not constitute an accord and satisfaction because there was no indication that plaintiff intended to accept a new performance in discharge of an unresolved obligation (see McMahon v. Pfister, 39 A.D.2d 691, 332 N.Y.S.2d 591; 19 N.Y.Jur.2d, Compromise, Accord & Release, § 6). The case must be resolved on the basis of the interpretation to be given the retainer agreement entered into between the parties. If the "extr...