Plancher v Katz
Decided on August 9, 2005
Supreme Court, New York County
Kevin Plancher, M.D., Plaintiff,
Clifford Katz, Russell Cavallo, John Dowdle, Tyler Lucas, and Nyconn Orthopaedic & Rehabilitation, PLLC, Defendants.
Kenneth D. Friedman, Esq.
Manatt Phelps & Phillips, LLP
7 Times Square, 22nd Floor
New York, NY 10036
Martin P. Russo, Esq.
Kurzman Eisenberg Corbin Lever & Goodman, LLP
One North Broadway, 10th Floor
White Plains, NY 10601
Debra A. James, J.
Defendants move for summary judgment (1) granting judgment on their fourth counterclaim; (2) dismissing all causes of action against defendant Clifford Katz; (3) dismissing plaintiff's second and third causes of action against defendants Russell Cavallo, John Dowdle, Tyler Lucas, (the "Remaining Members") and NYCONN Orthopaedic & Rehabilitation (NYCONN), and (4) dismissing portions of plaintiff's first cause of action.
This action for breach of contract arises out of a Settlement Agreement (the "Agreement") dated November 21, 2002, in which the plaintiff and defendants agreed to plaintiff doctor's withdrawal from a medical practice PLLC. Plaintiff seeks a preliminary injunction against defendants and their medical practice pursuant to the terms of the agreement.
Defendants seek judgment on their fourth counterclaim which alleges that plaintiff breached the geographical non-compete restriction contained in Paragraph 6 (a) of the Settlement Agreement. In response, plaintiff does not contest that he in fact breached the non-compete clause but argues that summary judgment is inappropriate because there are questions of disputed fact with respect to whether his breach should be excused based upon the defendants prior alleged breach of the Settlement Agreement. The court finds that plaintiff has failed to [*2]demonstrate that there are issues of fact precluding summary judgment and therefore shall grant defendants' motion for judgment on their fourth counterclaim as there is no dispute that plaintiff breached the non-compete clause.
Plaintiff's argument that a jury could find that his breach was excusable based upon defendants' alleged prior breach of the contract is contrary to law and plaintiff's reliance on Conservancy Holdings, Ltd. v Perma-Treat Corp. (126 AD2d 114 [3d Dept 1987]) is misplaced. In that case, the Court held that "[u]nder general contract law, a party may repudiate a contract for substantial nonperformance where the breach speaks to the very essence of the agreement." Id. at 118. In this case, plaintiff has not and does not seek to repudiate the contract but instead seeks to enforce the contract against the defendants. A party cannot on the one hand seek to enforce a contract and on the other hand claim that it is entitled to breach the contract.
It is well settled that when one party breaches an executory contract, the adverse party has a choiceto treat the entire contract as broken and sue immediately for the breach or reject the proposed breach and continue to treat the contract as valid. The adverse party must, however, make an election and cannot at the same time treat the contract as broken and as subsisting. One course of action excludes the other. Additionally, while an anticipatory breach relieves the nonbreaching party of the need to tender performance, such party nonetheless is required to show that it was ready, willing and able to perform its obligations under the contract.
Inter-Power of New York Inc. v Niagara Mohawk Power Corp., 259 AD2d 932, 934 (3d Dept 1999) (citations and quotations omitted). In this case, plaintiff made the election to treat the contract as valid and therefore plaintiff's breach of the contract cannot be excused. The court shall therefore grant defendants' motion for summary judgment on their fourth counterclaim.
The court shall also grant defendants' motion to dismiss all causes of action against defendant Clifford Katz. Defendants argue that plaintiff has failed to demonstrate that Clifford Katz breached any provision of the settlement agreement, converted plaintiff's property or was unjustly enriched by retaining property owned by the plaintiff. Plaintiff counters that Clifford Katz is a signatory to the Settlement Agreement and bound thereby, and that acting in concert with the defendants he withheld Member Collections owed to the plaintiff. While the court agrees with plaintiff that Clifford Katz is a signatory to the Settlement Agreement and is bound by its terms, the court finds that plaintiff has failed to create an issue of fact as to [*3]whether Clifford Katz breached any contractual or quasi-contractual obligation owed to the plaintiff.
While Clifford Katz is a party to the Settlement Agreement, he is not a "Remaining Member" as that term is defined in the Settlement Agreement. Therefore, contrary to the arguments asserted by plaintiff, obligations imposed upon Remaining Members under the Agreement were not imposed upon Clifford Katz unless expressly set forth in the Agreement. The defendants correctly argue that whatever the relationship between the plaintiff and Clifford Katz, the relevant paragraphs of the Settlement Agreement impose no obligations upon Clifford Katz. Similarly, plaintiff fails to raise any issue of triable fact with respect to the allegation that Clifford Katz withheld Member Collections owed to plaintiff as no evidence has been introduced to demonstrate that Clifford Katz exercised control over the Member Collections in light of the fact that the Settlement Agreement imposed no such obligation. The same reasoning applies to plaintiff's unjust enrichment claim as plaintiff presents no evidence that Clifford Katz is in possession of money that belongs to the plaintiff. Nor has plaintiff established that the Settlement Agreement created a fiduciary relationship between plaintiff and Clifford Katz with respect to the Member Collections because Clifford Katz is not a named obligee in Paragraph 12 of the Settlement Agreement and therefore plaintiff fails to establish any right to an accounting from Clifford Katz. Accordingly, defendants' motion for summary judgment dismissing the claims against Clifford Katz shall be granted.
The court shall deny defendants' motion for summary judgment dismissing the second and third causes of action for conversion and unjust enrichment against the Remaining Members and NYCONN. In contrast to defendant Clifford Katz, the Remaining Members and NYCONN were contractually bound by the provisions of the Settlement Agreement pertaining to the Member Collections and certain assets of the plaintiff. The conflicting affidavits submitted by the parties as regards this property raise triable issues of fact for determination at trial and preclude summary dismissal.
The court shall grant defendants' motion for summary judgment with respect to the first cause of action for breach of contract to the extent that claim is based upon (1) the release of Montefiore patient information to plaintiff; (2) the transfer of the facsimile telephone number, and (3) the solicitation of employees as plaintiff raises no opposition to that portion of defendants' motion.
With respect to the medical photo files, the court shall deny defendants' motion. The parties' affidavits raise issues of fact as to whether the parties' complied with the detailed procedure for disposition of the Medical Photo Files as set forth [*4]in Paragraph 5 (b) of the Settlement Agreement. Defendants' argument that plaintiff's claim should be dismissed because the plaintiff has failed to identify actual damages is misplaced, as it is defendants' burden on their summary judgment motion to demonstrate that plaintiff has not alleged or will be unable to prove damages due to the alleged breach. Plaintiff's complaint alleges that defendants' breach caused economic injury to plaintiff's practice by increasing the costs associated with patient care because plaintiff was required to recreate the files (Complaint, paragraph 33). Defendants have not rebutted such assertion as a matter of law. Therefore defendants' motion must be denied as to the Medical Photo Files.
Similarly, there are issues of fact as to plaintiff's claim that the defendants breached Paragraph 12 (c) of the Settlement Agreement by failing to provide "access to any and all information and documents . . . necessary to facilitate the process of collecting Dr. Plancher's Member Collections . . . and] . . . a data set, in electronic form, of all his patient receivables." There is conflicting testimony in the record as to whether plaintiff was granted sufficient access to the subject information under the terms of the Agreement. Furthermore, although it is agreed by the parties that data in electronic format was provided, there is an issue of fact whether the electronic data provided was of sufficient quality to comply with the terms of the Agreement. Therefore, this branch of defendants' motion shall also be denied.
There also remain disputed factual issues as to whether the defendants breached the contractual mail forwarding procedure and whether plaintiff suffered any injury thereby. The defendants assert that the parties through their course of conduct modified the mail-handling procedures in the contract in spite of the "no waiver" clause in Settlement Agreement. However, the defendants have not demonstrated by their submissions that the conduct of the plaintiff waived the mail-forwarding clause as a matter of law and therefore this issue shall be submitted to the factfinder. Furthermore, the plaintiff's affidavit creates a question of fact as to the injury plaintiff suffered by missing out on speaking engagements and being omitted from published lists of "top doctors."
The parties' affidavits also raise triable issues of fact as to whether the defendants complied with the Settlement Agreement provisions requiring the defendants to remove plaintiff's name from the signage of defendants' practice.
Based upon the foregoing, it is
ORDERED and ADJUDGED that the defendants' motion for summary judgment on their fourth counterclaim is hereby GRANTED; and it is further [*5]
ORDERED and ADJUDGED that the defendants' motion for summary judgment dismissing all causes of action against defendant CLIFFORD KATZ is GRANTED; and it is further
ORDERED and ADJUDGED that defendants' motion for partial summary judgment in favor of defendants RUSSELL CAVALLO, JOHN DOWDLE, TYLER LUCAS, and NYCONN is GRANTED to the extent of dismissing items 7 and 9 of plaintiff's first cause of action; and it is further
ORDERED and ADJUDGED that the defendants' motion is otherwise DENIED; and it is further
ORDERED that the parties are hereby directed to attend a pre-trial conference on September 9, 2005, at 12:00 A.M., at the Courthouse, IAS Part 59, Room 1254, 111 Centre Street, New York New York 10013.
This is the decision and order of the court.
Dated: August 9, 2005ENTER: