Silverman v Keller

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Silverman v Keller 2006 NY Slip Op 30662(U) March 9, 2006 Sup Ct, NY County Docket Number: 601913/2004 Judge: Richard B. Lowe Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK PRESENT: Hon. RICHARD B. LOWE, 111 COUNTY PART Justice SIDNEY E. SILVERMAN, INDEX NO. 6019 13/04 Plaintiff, MOTION DATE -againstMOTION SECl. NO. MOTION CAL. NO. GLUXORY E, KELLER, et al., Defendants. The following papcrs, nuinberccl I to ___ were rcad on this motion to/for Notice oi'Motiod Order 10 Show Cause Aiiswcritig Affidavits ExhiRils - W Y i r l f i nffidavih - - -. Cross-Motion: - Summary Judgincnt Affidavits - Exhibits ... , - - - - --. r Ycs l - - - - - -. @ No Upon thc forcgoing papcrs, it is ordcred that this rnoticm Check if appropriate: L 1 1)O NO' - .. POS'I' - 56 [* 2] SUPREME COURT OF 1HE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 56 -____-____--____--______I_______________-------------------------------- X SID NEYB. SILVERMAN, Plaintiff, --against- Index No.: GO 1913/2004 GREGC31iY E. KELLElI, J O H N F. HARNLS, JOAN T. HARNES, and B. ADAM PRUSSIN, Llcfendants. ........................................................................ X RICHARD B. LOWE, 111, J.: This case involves a dispute betwceii former colleagues in tlic now dcfunct law finn 01 Silvei-niaii, Harnes, Hanies, Pnissin 6r Keller (the Firm or SI-IHP&K) with respect to the proper allocation of legal fecs awarded in two class actions, Providcnt and Plum Creek, which were iniliatcd by the Finm prior to its dissolution at the end of2000. I3ot.h fees werc paid after thc Firm was dissolved. Plaintiff Sidney B. Silvcnnan seeks to rccovcr his share of a legal i ec awarded in the Provident case to dcfendant Gregory E. Kcller- in 2004. Plaintiff bases his claim on an agecnieiit that was confirmed in an February 4, 2002 c-mail exchange between plaintiff and dcfeiidant Kcller, In their answer, defendants allegc, intcr alia, that this agreement was procured by fraud, because, at the time plaintiff and Keller first ncgotiated a split of the Provident fee, plaintiff did not disclosc, in violation of his fiduciary duty, that he intended to take all of the Plurll Crcck k c . Dcfendants also asscrt counterclaims for an accounting and a sharc of the Plum Creek fcc plaintiff reccived in 2002. Lkfcndants argue that, as partiicrs of the Firm, they were entitlcd to a sharc ofthe Plum Crcek fee, as well as any other protjts canicd in 1999 that plaintiff rnay have concealcd. [* 3] Plaintiff moves, pursuant to CPLR 321 2, for summaryjud~nentdismissingthc second, third, fourth and fifth countcrclaims as to defendants Grcgory E. Kelier and .lo1111 F. Ilarncs, and granting plaintiff s claim for damages and directing dcfendants to turn ovcr the Provident fee, which is tieing held in escrow by dcfendants counsel. Plaintiff has setllcd his claims against d.efcndant H. Adam Pnissin, and this motion is not addressed to the claims and counterclaims betwceii plaintiff and dcfendant Joan T. 1 lanics. Familiarity with this court s orders dated August 4,2004, June 16,2005 and August 1,2005 is prcsumecl. FACTUAL ALLEGATIONS AND CLAIMS 1. The Firm Plaintiff Sidney B. Silverman alleges that, in thc early years of his law practice he worked alone, but as his prictice grew, he hired lawyers to assist him. Among tlie lawyers hc hired werc the dcfendants .loan T. Ilarncs, hcr son, John F. Harnes, Grcgory E. Kellcr and H. Adam Prussin. 11 is undisputed that John Harnes joined the Firin in II-)91, and Keller joined in 1994. Although dcfendants names werc in the title of the Firni, plaintiff maintains that nonc were equity p*rt iicrs (I and all were treatcd, for tax and profit sliaring pu.rposes, as crnployccs. Plaintiff allcges that during their teniis of cmployiicnt, defcndant John 1,lanlcs aild Keller received aniizral salaries. Jn or about 1994, plaintiff claims hc institutcd a plan to award bonuses to his attorneys. lfthey did subsiantiallyall ofthe work on the case, they received a bonus up to 50% of thc fee. h addition, plaiiitiffganted bonuses to attorneys w110 rcndercd cxceptional serviccs on cases ret.ainer1by plaiiitiff. Plaintiff further alleges that, in 1998, he changed thc bonus plan L givc o Joan H.arnes, John Flarnes, Kcller and Pivssin a share of tlie Firm s profits in lieu of a share of 2 [* 4] individual cases. Thc revised plan provided that the defendants would receive as bonuses, 50% of the Finn s profits in amounts detcrrniiicd by plaintiff. This plan was describcd in a memorandum rcgarding Interim Bonuses dated June 15, 1998 that plaintiff distributcd to cach of thc dcfendants. This memorandum states, i n pertinent part: Pursuant to this year s agreemcnt, profits are to be divided 50% to you and 50%) to me. I havc discretion over the amount of each sliare provided o d y that, in the aggregate, your shares equal 50%. Fce awards in thrce cases, Dart, Maxxam and Tremont, made possible profit sharing. The boiluses awardcd, subject to a final accounting, are as follows: *** Ifour arrangement is to continue, you will have to make a contribution to firm revcnue at least equal to your share. Complaint, Exh. C thereto. Plaintiff contciids that, by its terms, this bonus plan applicd only to J998, and was not continued in 1999. In that year, plainti~~reinstated original bonus plan. He the further contends that almost all of the income for 1999 came froin cases hc brought to the Firm aiid for which he was lead attorney. In late 1999, dcfendants John FJarnes and Kellcr formed thcir own finii, Harnes & Kellcr, LLP, and the Finn was dissolved as of ycar-cnd 2000. 11. Provident Fee I n 1997, plaintiffwas retained to reprcsent a policyholder of thc Provident Mutual Insurancc Conipany and to bring two separate class actions in the Pennsylvania Court of Cornnion I lcas on behalf of all other policyholders siriiilarly situated. Thc poljcyholder was a client 01 Lawson l+ Benistein, a New York lawyer. Bcrnstcin and plaintiff agreed to share fees and responsibilitics. Plaintiff allcges that he and Bernstein prepared the complaint, successfully rcsistcd Provident s motion to stay thc action in favor of prior cornnicnced actions, aiid obtaincd a lcadcrship position in the conduct of the litigation. Thereafter, defendant Kellcr assumed the day-to-day management 3 [* 5] ofthe case under the supervision of Bemstein and plaintiff. Bcrnstein became ill in I998 and could no longer participate in the Providcnt case. Plaintiff alleges that he assured Bcrnstcin that the fcc agreement would bc maintained, and gave him a imemoranduiii to that effcct. Benistcin died 011 January 25, 1999. After the dissolution of the Firm in 2000, defendant Keller assumcd responsibility [or the conduct of the Provident casts in cxchange for 50%) the fees, as coiif irmed in a letter from Kcller of to plaintiffdated March I O , 2000. Under the revised fee arrangemcnt, plaintiff contends that he and Bernstejn s estate would each receive 25% and Kcller would rcceivc the 50% balance. hi 200 1, one ofthe Providcnt cases was settled and Keller received a fec of $1.8 million. Kellcr paid plaintiff $900,000, and he remitted $450,000 to Bcrnstein s estate. lJowevcr, his heirs objected, contending they were entitlcd to $900,000, and comlncnced an action in the District Court for the Southcrn District ofNcw York (Bcrnstein action) against plaintiff, John Harms, Kellcr, SH l W & K and Hariles & Kcller LLI , Case No. 01-CV-9292. The Bernstein action was settled in 2002, by paying the Bemstcin heirs an additional $150,000 aiid increasing their sharc in tlic second Provident casc fruni 25% to 33%. Plaintiff claims that in ordcr to reach this scttlerncnt, hc agced to pay thc $150,000 to the Bernstein heirs arid rcducc his share in the second Provident action to 16.7%. This agreement is mcniorialized in an e-mail exchange on February 4, 2002 bctwecn plaintiff and defendant Kcller as follows: Dear Greg: Our dcal is: I . I pay $ 1 50,000 to Lawson s estate; 2. If therc is not (sic) fee on the second case, that is thc end of the rnattcr and 1 a111out $150,000; 3. If there is a fee on tlic second case, from your share, you rcmit to mc $100,000; 4. On thc sccond case, my sliare of thc fee i s 16.67%),yours is 50% and Lawson s estate is 33.33%. If you codinn via E-mail, our estates will bc protccted! 4 [* 6] Warm regards Sidney: Tlianks, that is our deal. greg. .. Complaint, Exh. A thereto. Plaintiff alleges that Kcller subsequcntly rencged on this agreement, and failed to cven disclosc to plaintiff thc amount of the fce on tlic second Providcnt casc and the datc of its reccipt. Instead, plaintiff received a letter dated May 27, 2004 from defendants in which they indicated that although receipt of the Provident fee was iinmincnt, plaintiff s share would be held i n cscrow until such timc as the plaintif1 scttled their claims of entitlement to a portion of a $4.5 million lcgal lec reccived by the plaintiff in 2002 for work 011 a case cntitled Sonet v Plum Creek Timber Comp,any, L P litigated in Delaware Cliancery Court. It is undisputcd that plaintiffs sharc of the Provident -9 fce is $442,614, excluding the $100,000 payment as outlined in the February 4, 2002 e-mail. 111. Plum Creek Fees Plaintiff alleges that thc Firni commenced a class action lawsuit i n 1998 (l lurii Crcek I) on behalf of Jcrrold Sonet, a New York attorney, and the limited partiicrs of Plum Crcck Tinihcr Company, L.P. The lawsuit claimcd that a proposcd reorganization of tlie limited partnership was going to un1airly bencfit the general partner by paying it lor uncertain future pcrfonnance. After extensive discovery, that action was dismissed on the basis that a vote by the limited partiicrs would cietcrininc who bclicved thc reorganization plan to be fiir or not, but that the proxy matcrials would bc closely scrutinized by the Dclaware Chancery Court. The Firm appealcd that dismissal, and commcxiced a sccond action in I999 (Plum Creek 11),wherein it was siicccssful in enjoining the iisc of a proxy stateincnt which contained false and misleading information. Thc two actions wcrc then 5 [* 7] settled in June 1999. Thc settlenient provid.ed that the general partncr would hold $30 million in escrow, and if ovcr the ncxt five years Plum Creek mct the financial targets that thc general partner had forecast, the money would bc retuincd to thc general partncr. If not, the money would bc paid over to the limited partners. A n indcpendcnt accounting firm was to provide a cerlificatc reflccting wlicther Plum Creek was meeting thc financial targets. 11 accordance with Delawarc law, tlie settlement and request for legal fees wcrc submitted 1 to the court for approval. Tlic Court approved the settlement in August 1999, and awarded the plaintiffs attonlcys a fec of $775,000 for the work performed in Plum Creek IT in improving the disclosure to the limited partncrs in the proxy matcrials. For Plum Crcck I, counsel for the plaintiff would be entitled to 25% of the proceeds of the escrow account, iiany, paid to the limited partncrs. ~ Sonet v Plum Creek Timber Co., 1999 WL 608849 (Dcl Ch A L 10, 1999). Thc Finn was paid its portion of the $775,000 in 2000 for the work doiic in Plum Creck 11. As a result of a merger of Plum Creck with Georgia Pacific in 2002, tlie time to incasure whcther the coinpany had met its financial targets was reduced from fivc years to two years and three months. Plaintiff alleges that the accoiintants reports hc receivcd retlccted that Plum Crcck hac1 iiidced iiot met the i orccast s target. He claims that he, along with Jcrrold Sonet and local counscl in Delaware, dcvoted hundreds of hours to analyzing and contcsting the accountant s rcports, and that, as a result of their efforts, the reports were revised and the limited partiicrs were paid $ 1 X iiiillioii from tlic escrowed funds. In accordance with thc Chanccry Court s fee award, $4.5 million was deducted from thc amount paid to thc liinitcd partners. Of that amount, local counsel in Delaware reccived IO%, Sonet received 30% and the 70% balance or $3, I50,OOO wcnt to plaintiff. He rcceivcd the Plum Creek I fee in 2002, two years aiicr the Firm had dissolved. [* 8] Plaintiff contends that sincc none of the defcndants rendered any exceptional services in connection with the I lum Crcek case, he did not award any part of the $775,000 he rcceivcd in 2000, and nonc requested a share. He further contcnds that none of the defendants ask.cd for a share ofthe contingent portion o f t h e legal fee at the time it was awarded in 2002, and that, not only was it a matter of public record, plaintiff directly informed John Harnes abou.t it. Defendants first claiiiied that thcy were entitled to 50% of the contingelit fee in a letter pcnned by Prussin dated February 12, 2004. Jii this letter, defendants based their claim on tlie Julie 15, 1998 memorandum, asscrting that "[elf coursc, this arrangement continued in subsequent years. Complainl, Exb. 1)thcreto. l laintiffrcplicd, advising that the bonus arrangement agreed to in 1998 did not sunrive past that year, and that not oiic of tlie dcfendants had reticlcred services on thc critical work perfoniied in 2002. Plaintiff also noted that he had lost several cases, pending at the time the Firm dissolvcd, in which hc hac1 a liugc invcstmcnt of tiinc and money and that defendants could not cherry pick thc one winncr and leavc him with the losers. IV. The Claims in This Lawsuit Plaintiffs complaint secks to compel dcfendaiits to pay forthwith the Provident fee, currciitly being held in escrow by clcfendants counsel pursuant to tlic so-ordered Stipulation dated August 4, 2004. He also seeks an assessmcnt of pu.nitivc damagcs against defcndants for breach of thcir fiduciary duty, a declaration that defendants claims with respect to the Pluiii Crcck claim arc without merit, arid a declaration that defendants have violatcd thc Cannons ofProfcssional Conduct and Disciplinary Rulc 9-1 02(A). I n thcir answer to the complaint, defcndants John I Ianics and Kcller contcnci that thcy werc partncrs in the Firm at all relevant times. Answcr 7 17. nei endants iiames were listcd 7 iii the [* 9] letterhead of thc firm, and theywere listed as partners in Martindale-Hubbcll. They claini they were entitled lo a share of partiicrship profits and werc exposcd to personal liability for partnership debts. Defcndants John Jlarnes and Keller claim that they wcre sucd in thc Bemstein action for a sharc of the Providcnt lecs solely as a result of their status as partncrs of S H H P M . Answcr 7 14. The Answer furthcr alleges that: during most of the rclevant period after 1991, cach oftlie partners of SHHP&K was to receivc a salary or draw, and a sharc of the profits. Silveinian s draw was $500,000, Joan Harnes $200,000, Prussin s $15O,OO0, and John Harnes s and Kcller s $125,000. Jolm Harries s base compensation was subseyucntly raised lo $150,000. hicome taxes were not withheld from the profits distributed abovc the base compensation. Answer 1 19. De ¬endants contend that the 1948 memorandum outlining the splitting of profits bctweeii plaintiff and Joan Warnes, Jolm I-lames, Prussin and Keller remained in placc in 1998 and 1999. Id.,1 21, 1 However, in 1999, Silvcrman represented to his partiler that there wcrc 110 firm profits, so n o moncy was distributed pursuant to this plan. Id. Defendants assert five countcrclaiii~s.Thc first counterclaiim asserts that Joan Harnes was a partner of the Firni Irom 1972 though 2000, and is entitled to an accounting for all these years. Likewise, thc second counterclaim asserts that, froin 199 I through 1999, John Harnes a n d o r Kcller were partners of SHJ IP&K and as such they are entitled to an accounting lor such years, The third counterclaim is prcniised on an alleged profit-sharing agreement from 1996 forward, that defcndaiits assert did riot cease upon the dissolution of Firni, but remained in placc until all profits earned through that year were paid out. Defendants claini that they werc primarily responsible for the successful prosecution of the Plum Creek litigations, and are entitled to their sharc of thc fee receivcd by plaintiff on altemativc theorics of breach of contract, quantum iiieruit and brcach of 8 [* 10] fiduciary duty. The fourth counterclaim is bascd on defendants claim that, at the time that Keller and plaintiff negotiated the division ofthe fec in thc Provident actions, which was in late 1949 when he and John Harnes had already dccided to leave SIIHP&K, plaintiffhad dctennined to keep the entire Plum Creek fee to himsclf. Thereafter, and in breach of his fiduciary duty of candor and his contractual duty ofgood faith and fair dcaling, plaintiffdid not disclosc to John Harnes or Kellcr that an additional $4.5 million had becn awarded in the Plum Creek litigation in 2002 when Kcller agrecd io plaintiffs Februaiy 4, 2002 c-mail. Kcller claims that hc would iicver have agreed to givc plaintiff any money from the Provident action had he known that plaintiffwas plaiiiiing on keeping $4.5 million in fces for which defendants were primarily responsiblc. Plaintiffs conduct allegedly amounts to fraud, breach offjduciary duty, and breach of his contractual duty of good faith and fair dcaling. The iifth counterclaim alleges that, pursuant to the compcnsation arrangcments in place at SHI W&K, defcndants had the right rcceivc 50%1of thc profits in 1998 and 1999, and thus they haw a contractual right lo their share of the Plum Creek fee. DISCUSSION 1. PROCEDURAL JRHECXJLALUTIES There are a few rules that a litigant must follow in order to play the litigation gainc. Onc must sliow up for schedulcd depositions, preparc tiincly answers to discovery dcmands, and comply with discovery orders. A litigant must also follow clcar and simple directives lrom tlic court s legal staff, serve iiiotion papers in accordaiicc with the CI LR, local court rules and court-ordered deadlincs, and, thc motion papers servcd should be idcntical to the ones filed with the cour-t. [* 11] Defcndants and/or thcir counsel have managed to break cvery siiigle one of thesc rules in this case. By order dated June 16, 2005, the court ruled that defcndants waived their right to take the dcpositioii of plaintiff as a result ofscvcral willfiil violations ofthe court s discovcryrulings and the Rules of thc Commercial Division. The order iiotcs that dcfendants were warned by this court sevcral times that 110 filrther violations would be tolerated. As fiirther discusscd below, defendants will be dcerned to have admitted to certain key facts as a result of ignoring a Notice to Admit, aiid tlie court has refised to consider those portions of their opposition papers on this motion that flagrantly violatc the CPLIi a d o r Rulcs oltlic Commcrcial Division. Their cries ofprcjudice fall on deai cars. Defendants John Harries and Kellcr, in their own words, arc experienced and highly succcssful litigators themselvcs aiid have called the shots in this casc, so thc blame cannot be wholly placed on their counsel. A. Notice to Admit On Scptembcr 22, 2004, plaintiff s previous attorneys servcd a Notice to Admit by rcgularmail. Pursuant to CPLR 3 123(a) and 2 I03(b)(2), defcndants response, if any, was due on October 18,2004. Dcfendants never served any response to this notice. They now admit the authcnticity of thc documents attached to the iiotioe, but claim that tlicy did not aiiswcr or object to this noticc in the belieftliat discovery was to bc set forth in thc scheduling ordcr established at the fjrstpreliininary confkrcnce, pursuant to Rulc I1 of the Commercial Part, and that only such discovcry would proceed." Defs. Rule-1% Statement, at 1 2. Nothing in Rulc 1 I supports tlie position that the 1 scheduling of a prcliininary confcrence i n any way postpones a litigant s responsibilities to timely respond to discovery deinands or seek an extciision of time. Pursuant to CPLR 3 123(a), [elach ofthc matters of which an admission is requested shall 10 [* 12] bc deemed admitted unless a sworn response is timelyreceived. Set Marine Midland Bank, N.A. v Custer, 97 AD2d 974, 974-75 (4th Dept 1983), affd 62 NY2d 732 (1984); Marine Midland Rank v Brycc, 70 AD2d 754,754-55 (3d.Dcpt 1979). Ilowevcr, a notice to admit is intended to eliminate from trial those facts that are easily provable or not in dispute. Wolin v St. Vinccnt s Hosp. and Medical Ccnter of New York, 304 AD2d 348,349 (1 st Dcpt 2003); EJodes v Citv ofNcw York, 165 AD2d 168, 170 ( 1 s t Dcpt 1991). Plaintiffs Notice to Admit complies with the nile, since it merely rcqucsted that defendants admit the genuineness of five documents and the tnith of certain key statements madc in those documcnts by the defendants. Accordingly, the court finds that tlic following admissions have bccn made in this case: John Harnes: -- admits that the following statemcnt in an afijdavit submitted to the New York City Tax Appeals Tribunal was true at the lime it was made by him on October 7, 1999: hthe years 1995 and 1996, I was employed by Silvennan Harncs & I larncs. I have, and had, no intercst in the partncrsliip or share in its profits; T havc made no contribution to thc firm s capital cither by cash or otherwise and have had no control over thc mariagemcnt of the firm. Elliot 6/15/05 Aff., Exh. 8 thcreto: Notice to Admit at p. 2,T 2. John Harnes and Keller: -- admit the genuincness of a draft niemorandum of law pr-cparcd in conneclion with the Bcrnstcin action; that thcy both read the memorandum at the time it was preparcd, and that the following staterncnt in footnote 3 was true at thc timc it was made: should Kcller or [John] Harnes be required to answer in this action they would catcgorically dcny that thcy wcre equity partners in the law fimi of Silverrnan, I lamcs, Harnes or [SHHP&K] or individual partners with Defendant Silvcrman. - at p. 4,117 1-4. Id., -- atlriiit that the Fcbruary 4,2002 e-mail reflccts tlic deal the partics reached as to the settlcment of Ihc Benistein action. Id.,at pp. 4-5,TI 5-7. 11 [* 13] B. Defendants Brief I n Opposition to This Motion In connection with this motion, defendants scrved and filcd two different versions of their brief in opposition. The docu.ment scrved on July 22, 2005 is a 22-page document, which has no page iiumbcrs and iiuincrous formatting errors. Uefensc counsel requested. permission to file a corrected brief and to niakc certain substantive changes. On August 10,2005, the court s law clerk instructed defcndants counsel to file the papcrs that werc served by the court-ordered July 22nd deadlinc. Accordingly, plaintifrs counscl tai lorcd its reply papers to the document servcd on July 22, 2005. Defeiidants counsel, however, proceedcd to filc a brief correcting the formatting en-ors and adding page numbers. While there does not appear to be any substantivc changes, it demonstrates the defkndants complete disregard. for the directives of this court. C. Defendants Kule 19-a Statement As required by Commercial Division Iiulc 19-a, plaintiffs counsel subrnittcd a statement of undisputed rnatcrial facts numbering 8 1 in total, each supported by evidentiary citations. In dcfendants counter-statement of disputed facts, 45 of thcse paragraphs are not supported by any citation to evidence, as required by Rule I9-a(d). Pursuant to Rule 19-(c), the corresponding allegations in plaintiffs statement are to be deemcd admitted. Feinsod v Stiefel Laboratories, IIIC., 1 Misc 3d 909(A), 781 NYS2d 623 (Sup Ct, Nass County 2004); see also Giannullo v City of New York, 322 b 3d 139, 140 (2d Cir 2003) (construing analogous provision of local federal rule St;. 1); Derienzo v Metropolitan Transp. Auth., 404 F Supp 2d 555, 557 (SD NY 2005) (same). D. Defendants Affirmations In Opposition To This Motion The three remaining defendants in this case havc submitted affirmations in opposition tu plaintifFs motion. CPLR 2106 is very clcar that an attonley may submit an affirmation in lieu of ;I 12 [* 14] sworn affidavit only when he or she is not a party to the action. An affirmation submitted by an attorney is procedurally erroneous if he is an active litigant on his own behalf. Slavenburg (:orp. v OpusAmarel,Inc., 53NY2d799,80On(1981);SchutzervSuss-Kolyer, 57AD2d613,613-14(2d Dcpt 1977). To makc matters worse, the affirmation of Joan Hanies is not subscribcd and affirmcd by [her] to bc true under penalties of perjury as rcquired by the statute. Grasso v Ancerarrii, 79 NY2d H 13, 8 I4 (1991); Siinriis v APA Tnick Leasinp Corp., 14 hD3d 322 ( I st Dcpt 2005). Thc Jolui Harnes affirmation purports to have an electronic signaturc, although the document bcfore lhc court was not elcctronically filed, and part of that signaturc includes a printed message that reads, i n parl, validity ~iiknowii. Finally, all t h e e affirmations are fillcd with irrclevant invcctive about plaintiffs lawyering skills and cthics. For all these rcasons, the court declines to consider thesc affimiatioiis, and will only consider the deposition testimony ofthese parties andany other properly authenticated documentary cvidencc. 111. DEFENDANTS 1UGHT TO AN ACCOUNTING The second counterclaim seeks an accounting for the ycars 1991 through 1099. 1 lowevcr, oiily equity partners, as opposed to contract partners, are entitled to an accounting. Mazur v Grcenberg, Cantor & Reiss, 1 I O AD2d 605, 605-06 (1 st Dept), 66 NY2d 927 ( 1 985); sce also Bercck v Meyer, 222 AD2d 243,244 (1st Dcpt 1995); Lynn v Corcoran, 1994 WL 123519, * 1 (Sup Ct, Nassau County Fcb. 14, 1994), a 2 19 AD2d 698 (2d Dcpt 1995). In Mazur v GreenbcrET, - Cantor & Reiss, sunra, a lawycr sought to compel his former law fin11 tu account for the value of his partnership share, incliiding assets and all fees cariicd but not collectcd as of lhc date of his withdrawal. The First Department reversed a j u d p c n t directing a partnership 13 [* 15] accounting. Whether partnership status is enjoycd turns on various factors, including sharing of prolits and losscs, cxercising joint control over the business, aiid inaking capital invcstmeiit and possessing an owncrship iiitcrest in the partnership. Stamrn & C h . , 94 AD2d 2 1 I , 2 I4 ( I st Dept), J f a Id.at 605, c,jtjngM.I.F. Securities Co. v R.C. 60 NY2d 936 (1983). T was not enough that the t plaintifi was given the right to sharc in the f h s annual profits at a fixed rate, cxercised sonic control iii the firni, and was allowed to call liimsclf a partner aiid listed as such in Martindalc- Hubbell, and on the firm s lctterhead and tax returns. The plaintiff did not have the right to share in the finn s capital account, w s not responsible for the firm s rcnt or losses, and was not a party a to the original 1967 partnership agreement or any other written agreement. Thc First Departnient held that tlic customary indicia of a partnership wcre not all prescnt, and that the arrangement sccnns to be a precursor to today s law f r practice of two-tiered partncrships. im 110 AD2d at 606 (citations omitted). Muhlstock v Cole (245 AD2d 55 [Ist Dept 1997]), also involved a claiin for an accounting by former members of an accounting finn organized as a partnership. Thc First Dcpartmenl affrnied a Rcfercc s finding that the fonncr members were not true partncrs, but niorc like glorified cmployecs, who participatcd in profits but had no other rights and duties of partnership, on thc ground that they had no rcal say in tlic management of the firm and did not agrec to sliare losscs. M.at 58. As more fiilly explained below, plaintiff has amply dcmonstrated that neither John I-lariics nor Kcller was an equity partner of the Firm, and the defendants Iiavc failed to raise a triable issuc of fact to support their couiiterclairn for an accounting. 14 [* 16] A. Defendants Admissions As stated abovc, by failing to rcspond to plaintiffs Noticc to Admit, John Harncs and Kellcr have each admitted in this case that they were not cquity partners of the Firm. Even if thc court were to cxcusc this discovery failure, plaintiff would still he entitled to surnmaiy judgncnt against these dcfendaiits as lhcy have failcd to raise a triable issuc of rnatcrial fact as to whether they, unlike the plaintiff in Mazur, eiijoyed a full equity partilership with the plaintiff, In ail affidavit tic voluntarily submitted to the Ncw York City Tax Appeals Tribunal on or about Octobcr 7, 1999 (the Tax Affidavit), John Harncs SWOJ-c under oath that lie had no inter-cstin SHHP&K, no share i n its profits, inade no contribution to the firm s capital either by cash 01- othcrwisc, no control ovcr the management of thc finn, and was not an equity partncr. At his deposition, Johii Harnes attempted to explain away the statements in the Tax Affidavit. Hc testiiicd that thc affidavit is liniited to the ycars 1905 and 1996, and that it was accuratc for thosc years becausc the Firm had T ~ profits. John Harncs Tr. at 124-125, 134. The court rejccts Mr. Jlarnes O attempt to tnakc an uttcr mockcry out of a sworn statcnierlt hc freely gave to a taxing authority. As this court found in its August I , 2005 decision, the Tax Affidavit clearly states that John I-Iarncswas iievcr a partner at the Eirni. Decision, at p. 9. Tlic plain languagc of thc affidavit, Le., I havc, and had, ..., does not limit his statements to 1095 and 1996. In addition to the Tax Afljdavit, both l o h i I larnes and Keller reprcsentcd to a fcdcral judgc that tlicy in f x t wcre riot equity partners in SHHP&K, nor werc they individual partiicrs with Defendant Silvennan. Elliot 6/15/05 Aff., Exh. 7 thereto. This was not a lcgal position, as defcndaiits now claim, but an admissioii of fact made in connection with settlement ncgotiatioiis, and admissible in this proceeding. Central Petroleum C:nr-~. Kvrinkoudes, 121 AU2d 165, 105 ( I st v 15 [* 17] Dept), appeal dismissed 68 NY2d 807 (1986). B. No Written Partnership Agreemcnt It is undisputcd that neither defendant signed a formal written partnership agreement. It was plaintifl s practicc that, whcn he did havc an equity partner, the partnership would be riieniorializcd in writ.ing. Silverman 6/13/05 Aff., at 7 1 1 . For example, when Joan Harnes had an cquity intercst in the Firm, thcrc was a written partnership agreement in place. Id.,1 11, Exh. A thereto. & 1 Mazur, 1 10 AD2d at 605 (it was espccially worth noting that cquity partncrs had a written partnership agreement and plaintiff did not). The mcinorandum written by plaintiff in Novembcr 1993 is merely a proposal for the division of fr prolits with John Harnes, not a formal partnership im agrccment. Likcwise, thc 1998 memorandum mcrcly confirms that defendants were entitlcd to liitcrirn Bonuses based on a pcrcentage of firm profits. C. Firm Managemcnt Thc cvidencc in this case overwhelmingly supports plaintiffs claim that he had sole authority to inanage the Firni. John Harnes testiiicd that he had no control over thc management of the firm (John llanies Tr. at 1 3 3 , and Keller testified that he did not participate in decisions regarding compensation to be paid to employces, that his involvcment i n firm management was limi tcd to cascs he was working on, what typcs of clectronic research we would use, things of that sort. Kellcr Tr. at 59-60. Joan I-larnes testiiicd: Ycs, I think [Plaintiff] had the final say on things. I hcy were ccrtaiiily discussed, and 1 think at times we argued about things, but I understood that he had the major interest and he madc the final dccision. Joan Harncs Tr. at 15-16. In addition, plaintiff offers ail affidavit frorn H. Adam Prussin, in which he avers that Plaintiff was the sole maiiager of the Firm, with ultimate authority in all areas of management o r the Firm, including staffing, 16 [* 18] personnel, financcs, and case management. Prussin 6/8/05 Aff., at 7 5. The documentary evidence subinittcd by defendants actually supports the plaintifvs claim. The Novcmbcr 28, 1993 meriiorandum giving John llarnes 20% of the Finn s prof its makes clcar that plaintiff was i n control ofthe Finn at that timc, and would reinain in control until such time as John Ilarnes percentage of firm profits cxcceded 5096, a scenario which, by John Harnes own admission, never occurred. Hc testificd that, in 1995 or 1996, thcir arrangcment died and a iicw arrangerneiit came into being. John Harnes Tr, at 14 1. And the 1908 mcmoraiidum clearly indicates that plaintiff had the sole discrction to divide up the remaining 50% of the profits arnongst Joan Harnes, John J lames, Kellcr aid Prussin. D. Liability For Firm Losses An indispensable essential of a contract of partnership . , . is a mutual prornisc or undertaking ofthe parties to share in the profits of the business and submit to thc burden of making good the losses (citation omittcd). Steinheck v Gerosa, 4 NY2d 302, 3 17 (1958); sec also Prince v O Brien, 256 h D 2 d 208,2 12 (1st Dcpt 1998) (no oral partncrship agrecmcnt, absent, among other things, cvidcncc that thc parties agreed to sharc losses); Chanlcr v Roberts, 200 AD2d 489,491 ( 1 st Dept), ]v dismissed 84 NY2d 903 (1994) (an essential clemcnt of a partnership is an agrceincnt bctwcen the principals to share losscs as wcll as profits). Plaintiff contcnds that hc alone was liable for Firm losses and liabilities, plcdged pcrsonal assets to secure credit for thc Firm, and guarantecd the Firm s sublcasc of office space at 750 Lexington Avenue. Silverman 6/13/05 Aff., 7 12. Abe Steinberg, who was thc Firm s certified public accountant froiii 1975 through 2000, avcrs that the Firm s cash flow was lcss than its opcr-atingcxpcnscs in 1995, 1996 and 1997, and that, during thosc years, thc Firm borrowed money 17 [* 19] 1 from a bank secured by stocks owned by plaintiff. Steinberg 6/ 13/05 hff., 1 6. In addition, as needcd, plaintiff made direct capital contributions to the Finn. Mr. Steinberg avers that no other person loaned, directly or indirectly, any money to the Firm or contributcd funds to support thc Firm s operations. The loails to thc Firm totaling $1,365,000 were repaid in 1 398. He contcnds that plaintiff, as thc sole cquity partncr, was charged with inconic in thc amount of the rcpayment and paid taxes on such income cven thou.gh he reccived no cash in connection with the rcpaynient. I , d 71 6, 8. 7 Joan H a n m confirmed that plaintiffpledgcd his own stock to securc a bank loan. Joan Harnes Tr. at 93. John Harms admitted at his deposition t1:iat lie never had a discussion with plaintiK as to wlictlier lic would be pcrsonally responsible for any dcbts or liabilities of the Firm, but claiincd that it was an implicit understanding on his part when hc became a incrnbcr of tlic f r .Jolm TTarnes im Tr. at I 17-1 18. Kellcr testified only that, in discussing the loans that plaintiff had taken out for the Fiiiii, Kellcr assumed that, as a partner of the Firm, hc was ultimately rcsponsible for that debt. Kcller Tr. at 56-57. However, a pcrson cannot unilatcrally assumc an obligation to share losses. John 1.larnes also testified that he nevcr personally guaranteed any loans to the Firm, and that plaintiffs pcrsonal guarantee of the rciit obligations of tlic Finn happened bcfore hc joined the Finn. Jolm I-Iamcs Tr. at 110. Kellcr testified that hc understood that hc would receive his frill pay of $125,00O, eveiy two weeks, regardless of thc fiiiancial perfbrniancc of the firni ... Kcller Tr. at 81-83. Defendants argue that bccause the Firm covered its losses from prior years lxforc detcrmining its profits in 1998, dcfendants shared in Firni losscs. This theory was rejectcd by tlic First Department in (307 AD2d 107, 108-09 11st Dept 2003]), on the thcory that 18 [* 20] such an cxpansivc interprctatioii renders meaningless thc distinction bctween sharing profits and sharing losscs. Defendants only other cvidencc on this point, other than their allegedunilatcral assumptions, is the fact that they were sued in the Bernstcin action as partners of the Firm. The fact that a third party -- not thc plaintiff -- took a litigation position that defcndants were partners of SJII IK&P, and that litigation was settled, is simply not evidence that the defcndants were, in fact, eyuity partners. E. Capital Contributions [Tlhe railure ofa party to contribute capital is strongly indicative that no partnership exisls. Rrodskv v Stadlcn, 138 AD2d 662, 663 (2d Dept 1988); sec also Kyle v Brenton, 184 AD2d 1036, I037 (4th Dcpt 1992) ( Thc undisputed cvidencc that dcfendants iievcr made a capital contribution to tlie business strongly suggests that no partnership existed [citations omitted]. ) Plaintif contends that he alone madc capital contribution to the Firm (Silvcrnian 6/13/05 Aff., 17 11-12), and thc Steinberg affidavit confirms this (Steinberg 6/13/05 Aff., 7 6). In tlic Tax 1 Affidavit, John Harnes dcnied that he made any capital contribution lo the Firm, as of Oclobcr 7, 1999. Elliot 6/15/05 Aff., Exh. 6. Defendants admit on this inotion that thcy never made any capital contribution to the Firm, having f d e d to o f k r any cvideiltiary proof to rcbut paragraph 18 of the plaintiffs Rule 19-a statemcnt. Even without these admissions, defendants have no proof that they made any capital contributions to thc Firm. Defendants argue that K.cller made a capital contribution in May 1909 of $50,000 io satisfy the Firni s obligation to a litigation fund iri the Proviclent casc. IIowcvcr, Kellcr s deposition tcstimony is that he decided to pcrsonally contribute the money to this f h d in ordcr to maintain the Finn s position as one ofthree co-lead counsel, after plaintiff cxprcssly told Kellcr we 19 [* 21] don t contribute to litigation funds (Keller Tr. at 158-60), aiid was reimbursed the $50,000 in 2004 (id. at 162-63). Moreover, he nevcr discussed with plaintiff that fronting this money would be a capital contribution to the Firm. Id. at 168-09. A voluntary payment that was expressly unauthorized by thc Finn cannot be considered a capital contribution. Finally, defendants counscl argues that the deposition testimony of John Harnes and Keller [shows] that they worked at a reduced salary and forcwcnt profits as a contribution to capital (Defs. Mern. of Law, at 2), but, like the defendants Rule 10-a statement, fails to providc any evidentiary citations to support this statement and fails to indicate that plaintiff agrced, either iniplicitly o r explicitly, that this would suffice as their capital contribution. F. Tax Treatment The fact that a persoii has always becn listed in a company s payroll books as an cmployce tends to cstablish that he is not a partncr. Allcva v Alleva Dairv, 129 AD2d 663, 664 (2d Dept 1987); see also Pi-ince v O Brien, 256 AD2d at 21 3, supra (finding that plaintiff was designatcd arid compensated as an employee contributcd to thc holding that the plaintiff was not a partner). In the August 1,2005 Decision, it was noted that John Hames and Kellcr had failed to rebut thc plaintiffs showing that the Firm treated them as employees, not partners, for tax purposcs. On this motion, the Firm s accountant avers that he treated John Hamcs aiid Keller every ycar as cmployees for tax purposes, and that every year from 1994 through 1999, defendants rcceived an TRS Form W-2 (Wage and Tax Statcment). Steinberg 6/13/05 Aff., I[ 2 and Exh. A thcreto. Both defendants acknowledged at their depositions that they received W-2 s for all the years of thcir ernployrnent at the Firm. John Harncs Tr. 26-29; Kcller Tr. at 32-35. Pnissin likewisc avers that he was treated as an einployee for tax purposcs. l russin 6/8/05 Aff., 1 6. Defendants admit 1 20 011 this [* 22] motion that The Finns accountant treated [John Harncs and Kellcr] as employecs for tax purposcs, by their failure to offer any cvidcntiary proof to rcbut paragraph 19 of the plaintiffs Iiule 19-a statement. Defendants' claim that the inconic taxes were not withheld from thcprofits distributed d bove r their base salary or draw (Answer, 1 19), is flatly contradictcd by the W-2 s. For example, John 1 Hanics wages for 1998 were reported as $650,6 14.50, aiicl the suni of $10 1,898.00 was withhcld lor fcderal taxes and $34,060.50 were withheld for state and local taxes, hardly tlic correct aiiiounts fc7r a $150,000 salary. Steiiibcrg 6/13/05 Aff., Exh. A thereto. In an attempt to raise an issuc of fact, deikiidants offer incomplete copies of the Finn s New York City Uniiicorporated Business Tax Returns for 1990, 1994, 1005, and 1997. Clompare Tannenbaurn Affirm., Exh. J thcreto, Elliot Reply Aff., Exhs. 4-7 thcrcto. The coniplcte 1904, 1995 and 1907 rchmis for the Firm, then Silvcrman, Harncs and Hanics, do list John I Iarnes as a partner of tlic Firni along with plaintiff and Joan Harnes, but significantly, plaintiff is listcd as having a 100% interest in thc partnership, John Harncs interest is citlier left blank or listcd as 0%. Keller is not listed as a partncr. The Firm issucd Schedule K-1 s to John Jlarnes from 1993 through 1997. Tariiienbauin I Affirm., Exhs. . and L thereto, This schcdule to the Form 1005 represents a Partner s Sharc of Incomc, Credits and Dcductions, Etc. for a partiicrship. Whilc it is true that the gcneral parlner box is chccked, the only other choiccs were liinitcd partner or limited liability coinpany member. More importantly, without exception, the Schedulc K- 1 s list John Harnes share ofthc Finn s capital account as 0 and his sliarc of share of income or losses as 0 . 1 Thc rclcvancc of the I990 return to this motion is unclcar. 21 [* 23] As discusscd above, in or about 1999,the Firm was engaged in a dispute withNcw York City over John Tlarnes stahis in 1995 and 1996, and thc City had requested further information concerning a bonus of$47,657.49 paid to John Harnes. In addition to thc Tax Affidavit, the Finn s accountant, Abe Steinbcrg, suhmjtted an affidavit in which he explained that, in 1995 and 1996, thc fr had profits of $183,760 and $55,790, respectively, which werc distributcd betwccn plaintilland im Joan Hanics. I n both years, John Harncs received a salary of $125,000, as reflccted in W-2 forms. In 1995, hc got a bonus of $47,657.49. Through an error C J I ~Steinberg s part, the bonus was not added to salary, but he was issued a Form 1099 (reflccting payment for services rcndercd to professionals or indcpendeiit contractor). Defendants attempt to creatc an issuc of fact rcgarding John Harnes status at the Firm by claiiiiing that plaintiffs statcments to Joan Tlarnes in an e-mail dated Novembcr 8, 1998 about the tax dispute show plaintiffs proclivity towards dcceptioii. DePs. Mem. of Law, at 9. In truth, the c-mail mcrcly confirms that Stcinberg made a mistake taking a deduction that would I~OWCVC~, indicate that John is a partner due to thc Firm s change of name (Tannenbaum 7/22/05 A f h i . , Exli. C; thereto) , and is further cvideiice that plaintiff treatcd John Flames as an noli-equity partner. G. Share in the Firm s Profits I herc is no dispute that in 1998, plaintiff had an agrcement with dcfendants to give thcrn a share of tlic Firm s profits, although thc parties disputc whether that agreement continucd in 1909. However, aprofit sharing agrecment, without more, docs not crcate a partnership. Rlaustcin v Lazar Borck & Mcnsch, 16 1 AD2d 507,508 ( 1 st Dept 1990). Significantly, the 1908 memorandum docs not providc for an equal split of profits amongst all five attorneys, but that 50% of the profits would bc retaincd by plaintiff with thc remaining 50% to be paid out as interim bonuses to the 22 [* 24] defendants, with plaintiff the sole arbiter of the amount of each person s share. H. Conclusion Theuiidisputedcvidence in this case is that 110 written partnership agecment cxistcd betwecn plaintiff and John Harnes and Kellcr. Nor is there any evidencc that John Harncs or Kcllcr cxcrcised joint control ovcr the business, made any capital contributions, had any agreement with plaintiff to share losses, or did, in fact sharc losses or contnbutc funds to support the Firni s opcrations. Both were treated as ciiiployees for tax purposes. Against this evidence is tbc fact that their nanics were added to thc Firm s rianie, and they wcrc listed as partners in Martindale- ¬Iubbell, that John Hames was listed as a partncr and issucd a Schcdule K-1 from 1994 through 1997, and that they werc entitlcd to share in 50% oftlic Firm s profits in I998 and possibility 1999. As in Mazur, thc totality of the evidence supports ;t finding that neither John Harnes, and particularly Kcller, werc ccpity partners of the Firm, and thus not entitled to an accounting. 110 AD2d at 606. 111. DEFENDANTS REMAINING COUNTERCLAIMS A. Profit Sharing Agreement Thc third and fifth counterclaims arc premiscd on an alleged profit-sharing agrcement in 1998 and 1999. Dcfcndants contend that the 50-50 profit sharing arrangcnieiit outlined in thc 1998 memorandum did not ccase upon their withdrawal from tlic Finn in late 1999 or the dissolution of the Firm in 2000, bur rcniained in place until all profits eanicd in those years were paid out. Plaintiff contcnds that dcfendants were not partics to any profit-sharing arrangement a k r 1998, that the contingent portion of the Plum Creck fee was not carned until 2002, and thus defcndants are not entitlcd to any portion of that fcc. Summaryjuclgmciit dismissing this claim is wairanted for scveral rcasons. First, thc opcning 23 [* 25] words of the memorandum, i.c., [p]ursuant to this ycar s agtxment, ... limits the terrri of thc partics agreement to 1998. Therc is no evidence that plaintiffs suggestion for continuing the profitsharing arrarigeincnt into 1999 in the last line of the mcrnorandurn was ever agreed to by either of the defendants. John Harncs testified that hc never discusscd it with plaintiff, Kellcr or I russin. John Harncs l r. at 195, 199-200. Second, therc is no evidence that the parties intended this agrcement, assuming it was not limitcd to 1998, to continue past the tiinc defendants left the Pimi or its dissolutiori in 2000. Again, the nicmorandum inakcs clear that any future profit sharing by the dcfendants was contingent on their continucd contribution to Firm revenue, which would bc impossible if they no longer worked for thc Firm or the Firni no longer existed. Again, John Hames admitted at his deposition that he never discussed this with plaintiff(John Harncs Ti*. 203); and testificd that the 1998 memorandum at ceased to exist at the time I was lcaving with respcct to future income (d, at 204). Keller tcstiiied that hc left the Finn in late 1999, after the Plum Creck fee was structured, without so much as mciitioiiiiig the k c to plaintiff. Third, and most importantly, thc undisputed evidence is that the contingent portion of the Plum Creek fcc was not received until 2002, and caniiot be considered a profit ofthe Finn in 1909 for purposes of an eiiiployee profit-sharing plan. In May 1999, when the plaintiffs fee application was approved by the Chancery Court, the fee was wholly contingent and could have been worth anywhcre fiom $0 to $7.5 milliun. SCc Soiiet v I lum Creek Timber Co., 1999 WT, 608849, 2, supra ( []It was inipossiblc to quantify thc precisc fee that plaintiffs counsel would bc receiving in Soncl 1. That would be knowable only five years down the road. ). Tlic Firm s accountant avcrs that, in 1999, a possiblc fee from the scttleincnt could not have becn calculated as Finn income for tax 01 24 [* 26] financial accounting purposes, as the amount of the fee, depcnded on the financial results of Plum Creek over a five-year period in the future. Tliere is also no dispute that the original financial reports for Plum Creek mct the general partner s forecasts, and that a substantial amount of additioiial lcgal work was perf urnied by plaintiff and local counsel in 2002 in analyzing and challcnging those reports. Thus, it cannot even be said that the fee was carned in 1999, bul not collectcd until 2002. Dcfendants also claim that plaintiff breached his implied duty of good faith and fair dealing not to struchirc a legal fcc to deprivc defendants of their riglitfiilly earned share. Most of the work pcrformed in Plum Crcck I was completed in 1998; the remainder, in carly 1999. The obligation to pay the fee at issue was cstablished in 1999. Although SHlIP&K could have reccived its fee in cash in 1999, Silverman elected to receivc it five years from that date. & Answer 77 36,44; see also Answer, 7 36 ( Upon infonilation and belicf, Silverman planned, at the time lie structured the Plum Creek I fcc, to obtain the entirc fee without telling his partners and to rctain thc entire k e for Ii i ms el f. ) For a complaint to state a cause of action alleging breach of an implied covenant 01 good faith and fiir dealing, the plaintiff inust allege facts which tcnd to show that the defendant so~iglit to prevent perforniance of tlic contract or to withhold its bcnefits from the plaintiff. Avcntine Inv. Mgt. v Canadian Imperial Bank ofConimerce, 265 AD2d 51 3 , 5 14 (2d Dept 1999); see also I lolmes Protection of New York, Inc. v Provident ]man SOC. New York, I79 AD2d 400 ( I st Dept 1992). of Therc is 110 evidcnce whatsoever that plaintiff stnictured the Plum Creek legal fee in order to somehow cheat tlic dcfcndaiits. To the coiitraiy, defendants coiitcnd that J o h n Harnes devised tlic structure of tlic Pluni Crcek 1 scttlcment (Answer, 7 32), and he testified at his deposition that he persoilally came up with the concept of placing funds in cscrow for t ive years to see if the gencral 25 [* 27] partner was able to meet its forecasts. John Harnes Tr. at 228-230. The fee structurc was approved by the Dclawarc Chanccry Court in a publicly-reported decision. John Hanics testificd that he d.iscussed the issue with plaintiff, recognized that the fec was contingent, and didn t object to it. - at 278-81. Thus, cven assuming that defcndaiits were entitled to a share oftlie Film s profits in Id., 1990, there i s simply no evidcnce to support the claim that plaintiff delibcrately sought to avoid any contractual obligation to split firm profits by thc Plum Creek fee structurc. B. Quantum Meruit hi their answer, rcspondents pled that Joan I-lames _ _was primarily responsible for the . successful prosecution of Pluin Creek I and thc resulting fec in that action. Answer, 1 33. Kcller 1 admitted at his deposition that his role was limited. to brainstorming with Joan and John about certain issues. As I said before, I did not have much of a rolc in this case. Kellcr Tr. at I2 1-22. According io tlic Finn s Plum Creek fee applications, Kcller did not bill any tinic on this iiiatter. Elliot 6/ 15/05 Aff., Exhs. 12 arid 13 thereto. Thus, assuming Keller has any legal basis for asserting a claim to the Plum Crcek contingent fee on a quasi-contract theory, thc uridisputed cvidcncc reflects he pcrfoi-nied little work on the case for the Firm. John ].lames, on the other hand, indisputably worked on the I luni Creck I matter, althougli the importancc of his contribution to the case is disputcd. Of the five attorneys and one paralegal who worked on the mattcr, John Harnes billed 75 of tlic total IS42 hours or less than 5%. Elliot 6/ 15/05 Aff., Exh. 13 tlicreto. However, tlic undisputed evidence also shows that John I larnes MUS paid a salary and a bonus for his work for the Finn in both 1998 and 1999. Steinberg 611 3/05 Aff., Exh A. thercto. Salaried cmployees may not seek additional conipensation in quantum mcruit for scrvices perhnned in conjunction with thcir einploynicnt unless the allegedly uncompensated 26 [* 28] duties (pcrfornicd) were distinct in cliaracter from those dutics for whicli the plaintiff was conipensatcd. Lalaunie v DaGrossa, 159 AD2d 349, 350 (1st Dept. 1990); see also Itobiiison v M u m , 238 NY 40,43 ( 1924); Brodsky v Stadlen, 138 AD2d at 663-64; Mance v Mancc, 128 An2d 448,449 (1st Dept 1987). C. Breath of Fiduciary Duty Or Implied Duty of Good Faith and Fair Dealing Defcndants proffer no evidcnce that they shared a fiduciary relationship with the plaintiff that was breached by his failure to pay thcm a portion of thc Plum Creek contingent fec. &Ai1 einployei--cmployccrelationship providing for the division ofprofits will not give rise to a tiduciary obligation 017 the part. of the crnployer absent an agreement to also sharc losses. Vitale v Stcinberg, 307 AD2d at 108. Tlic fact that the defendants wcre dependent upon tlic plaintiff 10 calculate profits does not transform the rclatioiiship from oiic of employncnt into a fiduciary one. I. ) Td. at 109. Fraud Finally, dcfcndants fourth counterclaim purports io state a claim for fraud in connection with plaintiffs retcntion of the Plum Creek 1 fee in 2002. Defendants pled, on information and belie ¬, that plaintiff defr-audcd them in late 1999 or carly 2000 by not informing Kcller that plaintiff intended to keep the entire Plum Creek 1 fee to himself, and then, in 2002, years after they left the Firm, by not informing them that he had becn paid the Plum Crcck let. Answer, 7 35. Fraud consists of a misrcprescntation of a material existing fhct, made with an intcnt to deceive, upon which the other party reasonably relies, and as a result oi which 1ic sustains damages. Fricdman v Aiidcrson, 23 AD3d 163, 166 (1st Dept 2005); Meratis Furs, lnc. v Giinbel Bros., Inc., I72 AD2d 209 (1st Dept 199 I ). Fraud cannot be premised on alleged iiiisreprcsentatiotis olfuture intcnt (Eastnian Kodak Co. v Roopak Enterprises, Ltd. 202 AD2d 220, 222 [ 1st Dept 1994]), and, 27 [* 29] absent a duty to speak, non-disclosurc does iiot ordinarily constitutc fraud (0ppenhcirner & Co. v Oppenhcim, Amel, Dixon & Co., 173 AD2d 203, 204 [lst Dept 19911). Defendants do not allcge that plaintiff made any inaterial misrepresentalions of fact to them in coniicction with thc settlenicnt of thc Bernstein action. Nor liavc they presented any evidencc of a liduciary relationship with plaintiff fioin which the law iinposcd on him a duty to spcak about his intentions with respcct to a possible fcc to be awarded in the futurc, a topic that defendants admit they ncver raiscd with plaintiff prior to leaving the Firm and prior to the settlcment ofthe Bernstcin action. Thus, thc fourth counterclaim f d s to stale a claim for reliel. JV. PLAINTIPF'S CLAIM TO THE PROVJDENT FEE Plaintiff's prima facie claim for his share of the Provident fce is iiot disputed. The parties agrce that plaintiffpcnnitted Keller to take the Provident case with him when Keller lcft tlic Fimi in 1999, and that in March 2000, Keller agreed in return to delivcr half of any fce for the sccond Providcnt case. Elliot Aff., Exh. I O thereto; Keller Tr. at 132-33. It is also undisputcd that plaintiff and Kellcr anieiidcd their agreement concerning the Provident fee in February 2002, to provide that Keller would paypl:iintiff$ 100,000plus 16.670/;, ofthe fee, if any. Elliot 6/15/05 Aff., Exh2 thereo; Kcller Tr. at 141-43, 153. Finally, derendants do not dispute that Kellcr reccived a l i e i n the Provident casc, and that plaintiffs sharc is $542,614. Defs. Rule 19-a Statenicnt, 7 Dcfcndants' Answer pleads failure to state a claim, unclean hands, fraud, brcacli of fiduciary duty, estoppel arid set-of'f as affmiative dcfenses to plaintiffs claim. Since defendants h a w f d e d to raisc a triable issue oi'fact as to any of thcse defcnses, summary j u d p e n t awarding plaintiff the 2 The defcndiints ntimit that defciidant Joan T. Harncs liad 1 1 0 right fcc. Ucfs. Kulc' 134 St;itcment, at 1 79. 1 01- inkrest in any portion of the Provident 28 . [* 30] sum of $542,614 is warranted on this record. CONCLUSION AND ORDER For the foregoing rcasons, it is hereby ORDERED that plaintiffs motion is grantcd to the extcnt of dismissing the Second, Third, Fourth and Fifth Counterclaims as prosccuted by defendants John F. Harries and Gregory E, Kcller, and granting plaintiff s claim for damages in the amount of $542,614; and it is furtlicr ORDERED that defendants couusel turn over the sum of $542,6 I4 being held in escrow pursuant to thc Cour-l s August 4, 2004 Order within ten ( 1 0) of service ofa copy of this order with iioticc of entry; and it is further OKDERED that the remaining claims and counterclairns are sevcred and continued. Dated: March 9, 2006

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