Obstfeld v. Thermo Niton Analyzers, LLC
| Decision Date | 30 January 2019 |
| Docket Number | 2015–05517,Index No. 500152/09 |
| Citation | 93 N.Y.S.3d 338,168 A.D.3d 1080 |
| Parties | Lawrence A. OBSTFELD, et al., Appellants, v. THERMO NITON ANALYZERS, LLC, et al., Respondents. |
| Court | New York Supreme Court — Appellate Division |
168 A.D.3d 1080
93 N.Y.S.3d 338
Lawrence A. OBSTFELD, et al., Appellants,
v.
THERMO NITON ANALYZERS, LLC, et al., Respondents.
2015–05517
Index No. 500152/09
Supreme Court, Appellate Division, Second Department, New York.
Argued—October 3, 2018
January 30, 2019
Michelman & Robinson, LLP, New York, NY (Jon Schuyler Brooks of counsel), for appellants.
Stanley K. Shapiro, New York, NY (T. Christopher Donnelly, pro hac vice, of counsel), for respondents.
ALAN D. SCHEINKMAN, P.J., CHERYL E. CHAMBERS, LEONARD B. AUSTIN, ROBERT J. MILLER, JJ.
DECISION & ORDER
In an action, inter alia, to recover damages for conversion and unjust enrichment, the plaintiffs appeal from a judgment of the Supreme Court, Kings County (Carolyn E. Demarest, J.), dated May 21, 2015. The judgment, upon, among other things, a decision of the same court dated May 4, 2015, made after a
nonjury trial, is in favor of the defendants and against the plaintiffs, in effect, dismissing the complaint.
ORDERED that the judgment is affirmed, with costs; and it is further,
ORDERED that on the Court's own motion, the parties are directed to show cause why an order should or should not be made and entered imposing sanctions and/or costs, if any, including appellate counsel fees, against the plaintiffs pursuant to 22 NYCRR 130–1.1(c) as this Court may deem appropriate, by filing an original and four copies of their respective affirmations or affidavits on that issue, including the amounts of legal fees incurred by the defendants in connection with this appeal, in the office of the Clerk of this Court and serving one copy of the same on each other on or before March 1, 2019; and it is further,
ORDERED that the Clerk of this Court, or her designee, is directed to serve the respective parties with a copy of this decision and order by regular mail.
The plaintiff Morningside Consulting Group, Inc., doing business as Morningside Capital Group (hereinafter Morningside), by its managing partner, the plaintiff Lawrence A. Obstfeld, entered into an agreement (hereinafter the Agreement) with the defendants' predecessor in interest, Niton
Corporation (hereinafter Niton). Under the Agreement, Morningside agreed to assist Niton, on an exclusive basis, as a financial advisor for the purpose of finding a joint venture partner, a strategic investor, or some other business combination. The Agreement provided, inter alia, that it "shall be cancelable on sixty days notice by either party after August 1, 2002."
In September 2002, the parties entered into an addendum to the Agreement (hereinafter the Addendum), which stated, inter alia, that Morningside was granted "the exclusive right to act as financial advisor for Niton for the next two rounds of institutional fundraising following the present round, as well as for any investment or merger/acquisition transaction or IPO." Although the Addendum gave Morningside the exclusive right to act as Niton's financial advisor for further fundraising, including a possible merger or acquisition, the Addendum did not abrogate the provision in the Agreement that gave the parties the right to end their relationship upon 60 days' written notice (see Obstfeld v. Thermo Niton Analyzers, LLC , 112 A.D.3d 895, 897–898, 977 N.Y.S.2d 371 ).
In a letter dated June 6, 2003, Niton's attorney wrote to Morningside to provide "formal notice" of Niton's decision to "terminat[e]" the Agreement, as modified by the Addendum.
This letter operated to cancel the Agreement by its own terms no later than 60 days thereafter, or August 6, 2003 (see id. at 898, 977 N.Y.S.2d 371 ).
Approximately two years later, in March 2005, Niton was acquired by Thermo Fisher Scientific, Inc. Niton was renamed Thermo Niton Analyzers, LLC, and became a subsidiary of Thermo Fisher Scientific, Inc. The terms of the acquisition were set forth in an agreement titled "Niton LLC Member Interest Purchase Agreement" (hereinafter the Purchase Agreement), which provided, among other things, that Thermo Fisher Scientific, Inc., would purchase all outstanding member interests in Niton.
The plaintiffs commenced this action against Thermo Niton Analyzers, LLC, and Thermo Fisher Scientific, Inc. (hereinafter together the defendants), by filing a summons with notice dated June 9, 2009. In a complaint dated November 13, 2009, the plaintiffs asserted four causes of action.
The first cause of action was asserted by Obstfeld and alleged that Obstfeld held certain "Member Interests" in Niton and that he was therefore entitled to certain payments in connection with the acquisition of Niton by Thermo Fisher Scientific, Inc. The plaintiffs alleged that those payments were due when "certain identified triggering events" occurred. Although the complaint acknowledged that these payments were eventually made to Obstfeld, the plaintiffs alleged that the defendants failed to make those payments "when they became due." The first cause of action alleged that the defendants "thereby converted property belonging to Obstfeld."
The second cause of action was also asserted by Obstfeld and alleged that the defendants' failure to timely compensate Obstfeld for his member interests in Niton permitted the defendants to make use of such compensation for a period of between 18 and 30 months. The second cause of action alleged that the defendants "thereby unjustly enriched themselves at the expense of Obstfeld."
The third and fourth causes of action were asserted by Morningside and alleged that the defendants failed to make certain payments to Morningside in accordance with the terms of the Agreement. Accordingly, the third and fourth causes of action sought to recover damages for breach of contract.
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