Marcus v. Lominy
| Decision Date | 16 February 2022 |
| Docket Number | 18 Civ. 1857 (NSR) |
| Parties | JAY MARCUS, Plaintiff Counter-Defendant, v. MARIE MICHELINE LOMINY and PEDIATRIC ADOLESCENT MEDICINE LLC, Defendants Counter-Plaintiff. |
| Court | U.S. District Court — Southern District of New York |
JAY MARCUS, Plaintiff Counter-Defendant,
v.
MARIE MICHELINE LOMINY and PEDIATRIC ADOLESCENT MEDICINE LLC, Defendants Counter-Plaintiff.
No. 18 Civ. 1857 (NSR)
United States District Court, S.D. New York
February 16, 2022
OPINION & ORDER
NELSON S. ROMÁN, UNITED STATES DISTRICT JUDGE:
Plaintiff Jay Marcus commenced this action against Defendants Marie Micheline Lominy and Pediatric Adolescent Medicine, LLC (“PAM”) (collectively, “Defendants”), asserting common law claims for breach of contract (or, in the alternative, promissory estoppel and/or unjust enrichment), and inadequate compensation and retaliation under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 190 et seq., and New York Labor Law (“NYLL”), N.Y. Lab. Law. §§ 190 et seq., 650 et seq. Defendants asserted counterclaims for unjust enrichment and breaches of fiduciary duty and duty of loyalty. Presently pending before the Court is (1) Marcus's motion for summary judgment against Defendants on his claims for breach of contract, promissory estoppel, unjust enrichment, and inadequate compensation (ECF No. 99); and (2) Defendants' cross-motion for summary judgment against Marcus on those same claims (ECF No. 92). For the following reasons, the Court GRANTS Defendants' cross-motion and DENIES Marcus's motion.
BACKGROUND
The following facts are drawn from Marcus's Local Rule 56.1 Statement of Undisputed Material Facts (“SUMF”, ECF No. 101-3), Defendants' Response to Plaintiff's Local Rule 56.1 Statement of Disputed Material Facts and Counterstatement of Undisputed Material Facts
(“RCSUMF”, ECF No. 94), the parties' declarations and exhibits, and are undisputed except as indicated.[1]
I. Factual Background
A. Undisputed Facts About Marcus and Lominy's Relationship
Lominy, a licensed pediatrician in New York, met Marcus in 2005 when she and her former husband hired Marcus's construction company to renovate their home.[2] Toward the end of the construction project, Lominy and Marcus developed an intimate relationship while each were married to other people.[3]
At some point in their relationship, Lominy and Marcus began commingling money, reason for which Marcus arranged to file the paperwork to form a limited liability company called the “Pic of Wall Street” in 2006.[4] Lominy was the sole shareholder of the Pic of Wall Street.[5] Marcus wanted to buy a home together, but he asked Lominy to put the home and the mortgage in her
name because his “credit was bad.”[6]
B. Disputed Facts About Marcus and Lominy's Relationship and Alleged Agreement
According to Lominy, both she and Marcus pooled money in the Pic of Wall Street to purchase a home to reside together along with her children after they divorced their respective spouses.[7] Marcus invested those funds in various accounts to garner the best interest rate.[8] These funds were later withdrawn to purchase a home in 15 Fox Run Road in Croton-on-Harmon (the “Fox Run home”), and to place them into accounts opened in the name of Lominy's medical practice-PAM-shortly after opening it.[9] Lominy avers that because they were romantically involved and Marcus had business experience, she “trusted him to make financial decisions” with these funds.[10]
But according to Marcus, after Lominy was unable to reach an agreement to take over other medical practices, Lominy decided to start her own and asked him to bankroll her “in starting a new practice.”[11] For that main purpose, Marcus states that the couple formed the Pic of Wall Street.[12] Marcus asserts that he and Lominy also formed an agreement by which he “would bankroll her purchase and growth [of] a medical practice”[13] in exchange of having guaranteed
employment as the office manager, receive an hourly wage and fifty percent of the net revenues of the practice on an annual basis.[14] Marcus further asserts that the term of the agreement was
for the remainder of [his] or [Lominy's career]. If [Lominy] decided to end the practice, then [she] would have to provide [him] back the capital [he] provided to her and give [him] a bonus based on the practice sale price. If [Lominy] died and the practice simply dissolved, [he] would have lost the money [he] gave her.[15]
Marcus claims that the agreement also entailed that
[he] would have no control or ownership in the practice [Lominy] would be the sole owner of the business, and [he] would be an employee. [Lominy] would have all the voting rights; [he] had none. [Lominy] would be entirely responsible for the losses and obligations of the practice; [he] would not. [Lominy] would have decision making control over all aspects of the business; [he] would only be able to make recommendations to [Lominy]. The only restriction [Lominy] would have would be her contractual obligation to employ [him] as the practice manager pursuant to [their] financial arrangement.[16]
Based on this agreement, Marcus claims that he provided Lominy with start-up capital for PAM, initially depositing $288, 898.17 into the Pic of Wall Street, which would later be used to open PAM.[17] Later, in September 2007, Marcus invested an additional $52, 440.70 into PAM's money market account.[18]
Lominy denies ever needing any “start-up” capital or that Marcus provided any “start-up” capital or investment to start PAM.[19] She also denies ever having any intention of entering, or actually entering into any agreement, either in writing, verbally, or implicitly with Marcus to start
PAM.[20] Lominy avers that had she done so, she would have risked her medical license because she knew that she could not split her fees with a non-physician.[21] Instead, Lominy avers that Marcus offered to provide non-financial support and that she accepted it because they were in a romantic relationship and “he had free time . . . and experience starting and operating businesses.”[22] However, they never discussed a salary for him, what his function would be or how long he would be working at PAM.[23]
C. Undisputed Facts About PAM
In August 2007, Lominy started PAM as a private pediatric practice.[24] Marcus arranged for PAM's incorporation as a professional service liability company under Section 1203 of the Limited Liability Company Law with Lominy as its sole shareholder.[25] PAM's Articles of Organization state that PAM shall practice the profession of Medicine.[26] The State Education Department provided the required certificate confirming that Lominy was licensed to practice medicine when PAM was incorporated.[27] The Pic of Wall Street was dissolved that same month on August 20, 2007.[28]
PAM served the local community of Mount Vernon, New York, and Lominy's pediatric
patients mainly lived in the local Mount Vernon community or the local Westchester community.[29]Due to an office take-over arrangement she had with another doctor, Lominy started her own practice in an office that was already equipped with the necessary equipment, furniture, and other basic materials.[30] PAM's lease included a list of furniture that came with the lease, including multiple chairs, paintings, tables, file cabinets, draw cabinets, consultation tables, refrigerator, sink, and some equipment.[31] PAM never had income or revenue more than $500, 000.[32]
D. Undisputed Facts About Marcus's Work in PAM
Marcus acted as PAM's office manager from around August 10, 2007, through July 1, 2016.[33] Marcus understood his job duties as PAM's office manager to include managing the office, meeting with people, collecting mail, responding to mail, speaking to potential hires, meeting with insurance company, marketing, etc.[34] Marcus was also responsible for (1) processing the billing after Lominy “did her part, ” which was seeing the patients;[35] (2) keeping track of PAM's accounts receivable by posting through a software system licensed by STI;[36] (3) receiving, every 15 days, sheets that employees would fill out with the hours they worked;[37] (4) communicating with ADP, PAM's third-party payroll company, and he opened the ADP account under PAM and his name,
and knew the passcode to gain access to PAM's ADP account;[38] (5) reporting all the employees' hours, including his own, to ADP;[39] and (6) completing and providing to the other employees the Notice and Acknowledgement of Pay Rate and Payday under Section 195.1 of the NYLL Notice for Hourly Rate Employees, which he signed as the “Administrator.”[40]
If Marcus thought an employee had not reported their work hours correctly, he would cross-reference their hours with their log-in and log-out hours on the computer system.[41] Marcus did not keep the same kinds of records for himself as he kept for the other employees.[42] Beginning sometime in late 2007 through December 2015, Marcus reported to ADP that his wages were at an hourly rate of $15.[43] Beginning December 2015 through July 1, 2016, Marcus reported to ADP that his wages had increased to $75 per hour.[44]
Besides wages, Marcus also received compensation in the form of “profit-sharing, ” amounting to fifty percent of PAM's profits.[45] Without an exact formula or time-basis, Marcus determined his “profit-sharing” compensation based on availability, feasibility, and the money available.[46] On average, Marcus took approximately between $40, 000 and $60, 000 per year from his “profit-sharing” compensation.[47]
On October 15, 2014, Lominy emailed Marcus a letter she received from the Children's & Women's Physicians of Westchester (“CWPW”) regarding a Confidentiality Agreement and preliminary discussions about a potential business relationship between her and CWPW.[48] Lominy offered Marcus the opportunity to move along with other PAM employees to BCHP, but he declined.[49] By that time, Lominy and Marcus had become estranged personally.[50] CWPW was subsequently renamed Boston Children's Health Physicians (“BCHP”) in April 2016.[51] On July 1, 2016,...
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