Lande v. Radiology Specialists of Kingston PC, 90 Civ. 1251 (JFK) (SEG).
| Decision Date | 17 September 1992 |
| Docket Number | No. 90 Civ. 1251 (JFK) (SEG).,90 Civ. 1251 (JFK) (SEG). |
| Citation | 806 F. Supp. 1084 |
| Parties | Adam LANDE, Plaintiff, v. RADIOLOGY SPECIALISTS OF KINGSTON P.C., Michael S. Komarow, Thomas Abraham Koshy, David Ryon and Komarow, Koshy, Lande & Ryon Equipment Company, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Marc A. Pergament, Weinberg, Kaley & Pergament, P.C., Garden City, N.Y., for plaintiff.
Michael S. Komarow and Thomas A. Koshy was Patrick M. Reilly, David Worby, P.C., White Plains, N.Y., for defendants Radiology Specialists of Kingston, P.C.
This case, tried to the court without a jury, is brought by plaintiff Dr. Adam Lande against Dr. Michael S. Komarow and Dr. Thomas A. Koshy, his former colleagues in an incorporated medical practice at which he ceased working in 1987. Plaintiff claims that he is due certain sums from the defendants representing the value of his shares in the professional corporation and compensation which he was improperly denied in 1986 and 1987.
On January 1, 1986, Lande, the two defendant doctors and Dr. David Ryon1 formed Radiology Specialists of Kingston, P.C., a professional corporation under New York State law. They executed a shareholders agreement (P.Ex. 7),2 and each doctor executed an employment agreement with the corporation at that time. The group had been in practice as a partnership for about a year prior to that time and had previously formed a professional corporation in 1985 for the purchase of radiology equipment known as the Komarow, Koshy, Lande & Ryon Equipment Company. This Equipment Company retained no value of its own, and was set up to enable the doctors to pass through an investment tax credit on equipment to their personal individual returns, and a note of value equal to the equipment was taken out at the same time. Under the agreements as well as the corporate by-laws, each doctor was an equal shareholder in both corporations, and they were to receive equal salary and other compensation.3
In mid-1986 it was determined that Lande was to find other employment and then leave the practice. He eventually found another position close to a year later, in July 1987, at Mount Sinai Hospital and told Komarow (who handled the matters relevant herein on behalf of all defendants) that he would leave the practice August 15, 1987. At that time they agreed he would receive payment of six weeks' salary representing "sabbatical leave" to which each doctor was entitled every five years under their employment agreements. Plaintiff also maintains they agreed to additional salary for untaken vacation and educational leave, although Komarow denies those items were discussed. The main issue in this case — what plaintiff was to receive for his share of the practice — was apparently not discussed at that time, and there were no further relevant discussions between plaintiff and defendants until after plaintiff left the practice and a meeting was held on November 11, 1987.4
Present at the November meeting were Lande, Komarow, Thomas Doerr, who had been the accountant for the practice (and the individual doctors) since its inception, and Glenn Sutherland, who was an accountant plaintiff had consulted and retained for the purpose of reviewing the corporation's financial statements and advising him as to what amount he should receive. Plaintiff had also consulted his own attorney who was not, however, present at the meeting. According to Lande, Komarow initially offered him about $30,000, although Komarow says he offered $54,000 and Lande proposed $85,000 or $80,000.5 Komarow then proposed $60,000, and Komarow claims that at this meeting Lande accepted the offer of $60,000 to be paid in monthly installments over two years in full payment of everything owed. Lande, however, maintains that the meeting was only an "exploratory" bargaining session at which he agreed to nothing. Lande says that the meeting simply ended with Komarow's $60,000 offer on the table:
Tr. at 33-34. There were no further discussions between the parties except that, sometime in late November or December, plaintiff called Komarow and asked, because he was short of money, if he could receive an "advance" payment of $8,000 by the end of the year. Komarow agreed and sent Lande two checks totaling $8,000. The checks were annotated on their face with the words "Payout" and "Stock Repurchase."
On February 2, 1988 Komarow sent Lande a letter that read as follows:
Adam,
Enclosed is a payment schedule for your pay-out. Please note the calculations.
1- $52,000 was the original total due
2- 2 payments totalling $8,000 12/31/87
3- 24 equal principal payments of
$1833.33 (except pmt 24 of $1833.41)
4- 24 interest payments calculated as follows
7.5% ÷ 12 = 0.625% interest monthly
on the unpaid balance
for example
unpaid bal. = 44,000 × 0.625% = interest
pmt of $275.00
5- Total payment equals totals of 3 & 4
above
This is as fair a calculation as I can think of. I hope this answers any questions you have.
D. Ex. 3. Included with the letter was a document entitled "ADAM-PAYMENT-SCHEDULE" which showed that Lande had been given $8,000 in December 1987, reducing the "balance due" to $44,000. Then, for each month for 24 months, commencing with February 1, 1988, the document set forth a payment amount, broken down into principal and interest, and the balance that would be due after each payment. The schedule showed the total paid after the last installment on January 1, 1990 would be $52,000 plus $3,300 in interest. Also included with the letter and schedule was a check to Lande dated February 1, 1988 representing the first payment. The check was annotated "Memo: STOCK REPURCHASE."
Although Lande initially testified that upon receipt of these documents he did not call Komarow, he later stated that he "apparently must have called him in February" because he recalls asking Komarow why the total was $52,000 instead of $60,000. Tr. 48. He testified that the $52,000 figure was "a shock" to him: "Instead of $60,000, I received $52,000." Tr. 43.6 Komarow's explanation was that it represented repayment of an outstanding $8,000 loan Lande had from the Equipment Company. (The exact amount of the loan was $8,716.) Lande also recalls that he told Komarow that interest rates were running higher than 7.5%, but Komarow said Tr. 44.
What is significant about Lande's testimony is that he never questioned Komarow's clear assertion by way of these documents that $60,000 was the full payment Lande was to receive. Despite Lande's claim that he did not agree at the November meeting to this amount, upon receipt of the letter, schedule and check, his expressed concerns were about the interest rate and the $8,000 deduction. His "shock" was not at the $60,000 figure, but rather that he would receive only $52,000 instead of $60,000. He did not point out to Komarow that he did not agree to $60,000, nor did he set up any further meeting or make any additional proposal to Komarow — ever. To the contrary, he endorsed and deposited the February check. Each month thereafter through October 1988 Komarow sent a check in accordance with the schedule, and Lande endorsed and deposited each one without protest and without ever speaking to Komarow again or attempting to set up any meeting or negotiations. Each of the checks through September (except the July and August ones) was annotated "PAYOUT."7 The checks for April, June and September also included the notation "bal" followed by the balance due pursuant to the schedule. In addition, the March check came accompanied by a memorandum from Komarow showing the "PAYOUT" for that month in terms of principal and interest, how he had calculated the interest portion and the "current balance" of $40,333.34. The August check was annotated with a breakdown for principal and interest, and a "bal. remaining 30,032.56." The September check, which was sent September 13 rather than at the beginning of the month, was accompanied by a note from Komarow apologizing for the delay and explaining that he had added interest for the additional two weeks' delay, setting forth separately the amounts that represented principal and interest and showing "Balance $28,157.23." D. Exs. 1, 3, 4, 6.
In August 1988 Lande met with his accountant Sutherland because he "felt very uncomfortable about the tax consequences of this entire arrangement" since he did not trust the figures in the financial statements he had been given close to a year earlier and was afraid of his personal exposure in the event of an IRS audit. Tr. 49. There is no evidence as to why he was first prompted to address this concern at that time. Sutherland told Lande that in order to assess the situation precisely, he would have to make an audit of the corporation's records. Apparently Lande took no further steps in this regard. According to Lande, on October 14,...
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