Regent Fin. Grp., LLC v. Bedian

• Decision Date: 06 July 2012
• Citation: 949 N.Y.S.2d 315,97 A.D.3d 1116,2012 N.Y. Slip Op. 05458
• Parties: REGENT FINANCIAL GROUP, LLC, Plaintiff–Respondent, v. Rosalee BEDIAN, Defendant–Appellant.
• Court: New York Supreme Court — Appellate Division

97 A.D.3d 1116

949 N.Y.S.2d 315

2012 N.Y. Slip Op. 05458

REGENT FINANCIAL GROUP, LLC, Plaintiff–Respondent,

v.Rosalee BEDIAN, Defendant–Appellant.

Supreme Court, Appellate Division, Fourth Department, New York.

July 6, 2012.

Adair Law Firm, LLP, Rochester (Donald R. Adair of Counsel), for Defendant–Appellant.

Pheterson & Pheterson, Rochester (Irving Pheterson of Counsel), for Plaintiff–Respondent.

PRESENT: SMITH, J.P., FAHEY, PERADOTTO, SCONIERS, and MARTOCHE, JJ.

MEMORANDUM:

Defendant appeals from a judgment that brings up for review the underlying order that, inter alia, granted those parts of plaintiff's motion to dismiss the counterclaims and for summary judgment on the first cause of action in this breach of contract action, and denied that part of defendant's cross motion for leave to amend her answer. As limited by her brief, defendant contends that Supreme Court erred in granting that part of plaintiff's motion for summary judgment on the first cause of action, and in denying that part of her cross motion seeking leave to amend her answer to assert a counterclaim alleging misrepresentation. We agree with defendant.

The record establishes that defendant worked for a period of time as a representative of plaintiff, a financial services company. Pursuant to an agreement that was never executed, plaintiff initially paid defendant $130,000 per year in monthly installments in anticipation that defendant would earn commissions from her work that would meet and even exceed what she was paid. After a series of events that included the reduction by plaintiff of defendant's monthly draws and the imposition of a condition barring defendant from engaging in outside employment, defendant eventually ended her employment with plaintiff. Plaintiff thereafter commenced this action seeking to recover unearned commissions that had been paid to defendant, totaling $64,099.98.

We agree with defendant that the court erred in granting that part of plaintiff's motion for summary judgment on the first cause of action, upon determining that there was an enforceable “special agreement” that obligated defendant to repay unearned commissions to plaintiff. The court properly concluded that enforcement of the unsigned agreement in its entirety was barred by the statute of frauds ( seeGeneral Obligations Law § 5–701[a][1] ). Moreover, the court properly recognized that “no recovery can be had for the excess of advances over commissions in the absence of an agreement, express or implied, by the agent or employee to repay such excess” ( Nationwide Mut. Ins. Co. v. Timon, 9 A.D.2d 1018, 194 N.Y.S.2d 429;see Kleinfeld v. Roburn Agencies, Inc., 270 App.Div. 509, 511, 60 N.Y.S.2d 485). The court erred, however, in determining that defendant had entered into a separate binding “special agreement” that obligated her to repay unearned commissions. According to the court's reasoning, the one-term “special agreement” was enforceable based on defendant's acknowledgment of that term, despite the applicability of the statute of frauds to the agreement as a whole as well as the fact that plaintiff relied on the statute of frauds to avoid all other terms of the parties' unsigned agreement with the exception of that same term, obligating defendant to repay unearned commissions. Although a party's “admission of the existence...