Zolotar v. New York Life Ins. Co.

• Decision Date: 26 November 1991
• Citation: 172 A.D.2d 27,576 N.Y.S.2d 850
• Parties: , 125 Lab.Cas. P 57,354, 6 IER Cases 1648 Seymour ZOLOTAR, Plaintiff-Respondent, v. NEW YORK LIFE INSURANCE COMPANY, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 850

576 N.Y.S.2d 850

172 A.D.2d 27, 125 Lab.Cas. P 57,354,

6 IER Cases 1648

Seymour ZOLOTAR, Plaintiff-Respondent, v. NEW YORK LIFE INSURANCE COMPANY, Defendant-Appellant.

Supreme Court, Appellate Division,

First Department.

Nov. 26, 1991.

Christopher S. Rooney, New York City, of counsel (Robert C. Shenfeld, with him on the brief, Jackson & Nash, attorneys), for defendant-appellant.

Harold S. Elovich, New York City, of counsel (Ira M. Belfer, attorney), for plaintiff-respondent.

Before SULLIVAN, J.P., and WALLACH, KUPFERMAN, ROSS and ASCH, JJ.

ROSS, Justice.

The primary issue presented by this appeal is whether plaintiff's employment with defendant was terminable at will.

On October 16, 1953, Mr. Seymour Zolotar joined New York Life Insurance Company (New York Life) as an Apprentice Underwriter, and thereafter, pursuant to a written agreement, executed on or about April 16, 1954, with New York Life, he became a soliciting agent.

It is undisputed that this agreement, entitled: Soliciting Agent's Contract (contract), authorized Mr. Zolotar, as a Field Underwriter, to solicit applications for various insurance policies issued by New York Life, and specified the commissions that he would receive for performing that service. Paragraph 9 provides that either Mr. Zolotar or New York Life, as the parties to the contract, "may, with or without cause, terminate this contract upon written notice, said termination to become effective thirty days after the day on which such notice is dated" (see, for a copy of paragraph 9, Record on Appeal (RA), at 45).

In order to provide another monetary incentive, in addition to commissions, to soliciting agents, like Mr. Zolotar, New York Life offered a system of benefits (Nylic benefits), including retirement benefits, to those agents, "who qualified based, in part, upon the volume of life insurance the agent had produced ... The highest Nylic benefits offered are the Senior Nylic payments, which come into effect at the beginning of a soliciting agent's twenty-first year of soliciting policies for New York Life and increase annually until the agent's thirtieth year ..." (see, RA, at 42).

Nylic benefits are set forth in a Handbook issued by New York Life (see, for a copy, RA, at 51-66), and Mr. Zolotar received a copy. These benefits "are supplemental to and expressly made subject to the soliciting agent's continued employment with New York Life under a soliciting agent's contract ..." (see, RA, at 42).

During a more than twenty-seven year period, extending from April 1954 to November 1981, Mr. Zolotar, continuously operating under the provisions of the contract, produced numerous applications for insurance policies for New York Life, and in exchange he received commissions and Nylic benefits.

Sometime in 1981, New York Life discovered that Mr. Zolotar had improperly been submitting insurance applications, containing the signature of a physician on the medical portion of those application forms, who had not examined the applicants. Thereafter, New York Life, instead of using paragraph 10 of the contract, providing for termination only for certain stated reasons (see, for a copy of paragraph 10, RA, at 45), used paragraph 9, providing for termination, without cause, to terminate Mr. Zolotar. Specifically, by letter dated November 18, 1981, New York Life terminated Mr. Zolotar's employment, without cause, "effective December 18, 1981" (see, for a copy of that letter, RA, at 67).

By summons and complaint, dated October 17, 1985, Mr. Zolotar (plaintiff) commenced a wrongful discharge action against New York Life (defendant) for damages, based upon allegations of breach of contract, fraud, and unjust enrichment, as well as a claim for quantum meruit.

Following the joinder of issue and the completion of discovery, defendant moved for summary judgment, dismissing the complaint, and plaintiff cross-moved for partial summary judgment as to liability, and a trial as to damages. By order, entered June 3, 1991, the IAS Court denied both the motion and cross-motion. Defendant appeals.

The power of employers to terminate employees without cause has come under increasing attack over the last twenty years (see, for example Note, Protecting Employees At Will Against Wrongful Discharge: The Public Policy Exception, 96 Harv L Rev 1931 (1983), and the Uniform Law Commissioners' Model Employment Termination Act (adopted August 1991), as discussed in Samborn, At-Will Doctrine Under Fire, The National Law Journal, October 14, 1991, at 1, col. 4). Nevertheless, in the face of that attack, "[i]t is still settled law in New York that, absent an agreement establishing a fixed duration, an employment relationship is presumed to be a hiring at will, terminable at any time by either party (Martin v. New York Life Ins. Co., 148 N.Y. 117, 121 ..." (Sabetay v. Sterling Drug, 69 N.Y.2d 329, 333, 514 N.Y.S.2d 209, 506 N.E.2d 919 (1987)). Further, an employee at will in this State can be dismissed "at any time and for any reason or no reason ..."(O'Connor v. Eastman Kodak Co., 65 N.Y.2d 724, 725, 492 N.Y.S.2d 9, 481 N.E.2d 549 (1985), reargument denied 65 N.Y.2d 1054, 494 N.Y.S.2d 1033, 484 N.E.2d 1055 (1985)).

In Murphy v. American Home Prods., 58 N.Y.2d 293, 297, 300-301, 461 N.Y.S.2d 232, 448 N.E.2d 86 (1983), the Court of Appeals unequivocally stated that "[t]his court has not and does not now recognize ... the tort of abusive or wrongful discharge of an at-will employee. To do so would alter our long-settled rule that where an employment is for an indefinite term it is presumed to be a hiring at will which may be freely terminated by either party ... [S]uch a significant change in our law is best left to the Legislature ..." [material in brackets added].

We have repeatedly stated that "[i]n interpreting a contract, the intent of the parties governs ... [citation omitted]. A contract should be construed so as to give full meaning and effect to all of its provisions ... [citations omitted]. Words and phrases are given their plain meaning ... [citation omitted]. Rather than rewrite an unambiguous agreement, a court should enforce the plain meaning of that agreement ... Where the intent of the parties can be determined from the face of the agreement, interpretation is a matter of law and the case is ripe for summary judgment ... [citations omitted] ..." (American Express Bank v. Uniroyal, 164 A.D.2d 275, 277, 562 N.Y.S.2d 613 (1st Dept.1990), appeal denied 77 N.Y.2d 807, 569 N.Y.S.2d 611, 572 N.E.2d 52 (1991); and Consolidated Edison v. General Electric Co., 161 A.D.2d 428, 429-430, 555 N.Y.S.2d 355 (1st Dept.1990)).

Paragraph 9 of the contract between the parties, which defendant used to terminate plaintiff, reads as follows (see, RA, at 45):

"Either party hereto may, with or without cause, terminate this contract upon written notice, said termination to become effective thirty days after the day on which such notice is dated."

When we apply the methodology for interpreting contracts, set forth in the legal authority, supra, to paragraph 9, we find that, since the plain meaning of that paragraph is that it contains no limitation of any kind, either in duration or in purpose, defendant had "an unfettered right to terminate the employment at any time ...", meaning plaintiff was an employee at will (Murphy v. American Home Prods., supra 58 N.Y.2d at 304, 461 N.Y.S.2d 232, 448 N.E.2d 86, also see Waldman v. Englishtown Sportswear, Ltd., 92 A.D.2d 833, 835, 460 N.Y.S.2d 552 (1st Dept.1983)). Accordingly, defendant did not breach the subject contract, by discharging plaintiff.

One of the plaintiff's contentions is that defendant allegedly breached an implied covenant of good faith and fair dealing, by terminating him, without cause. Any "party who asserts the existence of an implied-in-fact covenant bears a heavy burden, for it is not the function of the courts to remake the contract agreed to by the parties, but rather to enforce it as it exists ..." (Rowe v. Great A & P Tea Co., 46 N.Y.2d 62, 69, 412 N.Y.S.2d 827, 385 N.E.2d 566 (1978)).

In view of the fact that the instant matter involves employment at will, we find meritless this contention about an implied covenant, since "[i]n the context of such an employment it would be incongruous to say that an inference may be drawn that the employer impliedly agreed to a provision which would be destructive of his right of termination. The parties may by express agreement limit or restrict the employer's right of discharge, but to imply such a limitation from the existence of an unrestricted right would be internally inconsistent ..." (Murphy v. American Home Prods., supra 58 N.Y.2d at 304-305, 461 N.Y.S.2d 232, 448 N.E.2d 86, and Sabetay v. Sterling Drug, supra 69 N.Y.2d at 335-336, 514 N.Y.S.2d 209, 506 N.E.2d 919).

Our review of the record indicates that, at time of plaintiff's termination effective December 18, 1981, he was credited with twenty-eight years' service for Nylic benefits (see, RA, at 43), and Nylic, as discussed supra, was defendant's supplemental monetary incentive benefit program for soliciting agents.

Although plaintiff does not dispute that defendant has paid and continues to pay him Nylic benefits, calculated on the basis of twenty-eight years' employment, as well as commissions due him, concerning policies he solicited prior to his termination, plaintiff alleges that defendant, in bad faith, prevented him from obtaining maximum...