Grosman v Lederman

[*1] Grosman v Lederman 2009 NY Slip Op 52590(U) [25 Misc 3d 1245(A)] Decided on December 21, 2009 Supreme Court, Richmond County McMahon, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 21, 2009
Supreme Court, Richmond County

Irina Grosman, M.D., and PHILIP SILVERMAN, M.D., Plaintiff(s),

against

Gilbert S. Lederman, M.D., P.C., and GILBERT S. LEDERMAN, M.D., Individually, Defendant(s).



100544/2007

Judith N. McMahon, J.

On or about February 2, 2007, the plaintiffs commenced this action seeking to recover for monies allegedly due and owing to them pursuant to their separate employment agreements with the defendants. It is undisputed that defendant Gilbert S. Lederman was the director of the Radiation Oncology Department at Staten Island University Hospital from 1990 through 2004. In that capacity he hired the plaintiff Philip S. Silverman, a radiation oncologist, in 1994, as an associate in the firm defendant, Gilbert S. Lederman, M.D., P.C. Upon his hiring, Dr. Silverman signed an employment agreement with the defendants which indicated "compensation [ ] shall be agreed upon from time to time by EMPLOYER and EMPLOYEE".

Defendant Dr. Lederman also hired plaintiff Irina Grosman, another radiation oncologist, as an associate physician of the firm in 1996. Dr. Grosman's employment agreement indicated that "compensation [will be] mutually agreed upon by the EMPLOYER and the PHYSICIAN. In addition, PHYSICIAN may receive such additional amounts each year as the EMPLOYER may from time to time determine." On October 22, 2001, Dr. Grosman agreed to the annual gross salary of $400,000, retroactive from August 15, 2001.

In January 2004, defendant Gilbert S. Lederman concluded his employment as director of the department of Radiation Oncology at Staten Island University Hospital but continued to treat patients until November 2004, when both plaintiffs and defendant were asked to leave the hospital. Defendant Lederman contends that upon him no longer being the director of the Radiation Oncology department he changed the rate and manner of compensation to the plaintiffs. The plaintiff's acknowledge that the compensation rate and manner did change but still contend they were not paid in accordance with the agreed upon rates. Plaintiff's complaint alleges that the defendants, inter alia, breached their employment contract, were unjustly enriched, converted funds inappropriately, violated Labor Law § 198 and caused the plaintiffs emotional distress. Presently, issue has been joined and discovery is complete. The defendants are now moving for summary judgment contending, inter alia, that no monies are owed to the plaintiffs.

Clearly, summary judgment is a drastic remedy that should not be granted where there is any doubt as to the existence of triable issues of fact (Alvarez v Prospect Hosp., 68 NY2d 320, [*2]324 [1986]; Herrin v Airborne Freight Corp., 301 AD2d 500, 500-501 [2d Dept 2003]). The party moving for summary judgment bears the initial burden of establishing its right to judgment as a matter of law (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]), and in this regard " the evidence is to be viewed in a light most favorable to the party opposing the motion, giving [it] the benefit of every favorable inference" (Cortale v Educational Testing Serv., 251 AD2d 528, 531 [2d Dept 1998]). Nevertheless, upon a prima facie showing by the moving party, it is incumbent upon the party opposing the motion to produce "evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" (Alvarez v Prospect Hosp., 68 NY2d at 324; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

Plaintiffs Causes of Action alleging Breach of Contract

Here, the defendants have submitted evidence sufficient to establish their prima facie entitlement to summary judgment on the plaintiff's breach of contract causes of action (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Herrin v Airborne Freight Corp., 301 AD2d 500, 500-501 [2d Dept 2003]). Defendants have submitted evidence that all the compensation due and owing to the plaintiffs was paid at the conclusion of their employment and that no additional money is outstanding. However, in opposition, the plaintiffs have raised several issues of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Herrin v Airborne Freight Corp., 301 AD2d 500, 500-501 [2d Dept 2003]). Namely, the plaintiffs have established that the contract between the parties while indicating that compensation would be "agreed upon from time to time" is contradictory of evidence which indicates that a set salary may have been agreed upon. In addition, all the parties agree that the rate and manner at which compensation was awarded changed over the course of the employment, however, the exact rate and manner are in dispute. As a result, numerous questions of fact exist sufficient to warrant a trial by a jury and denial of summary judgment.

Plaintiffs Causes of Action alleging Unjust Enrichment

"To prevail on a claim of unjust enrichment, a plaintiff must establish that the defendant benefitted at the plaintiff's expense and that equity and good conscience require restitution" (Whitman Realty Group Inc. v. Galano, 41 AD3d 590, 591 [2d Dept. 2007]). Therefore, in order for the plaintiff to make out a prima facie case they would have to aver that defendants were enriched at their expense and that to retain such enrichment would be against "equity and good conscience" (id,; Swits v. New York Systems Exchange, Inc., 281 Ad2d 833, 835 [3d Dept., 2001]). However, "[r]ecovery for unjust enrichment is barred by a valid and enforceable contract" (Whitman Realty Group, Inc. v. Galano, 2007 NY Slip Op 5266, 2 [2d Dept., 2007]).

Here, the defendants have established their entitlement to summary judgment as a matter of law with regard to plaintiff's claims under the guise of unjust enrichment (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Herrin v Airborne Freight Corp., 301 AD2d 500, 500-501 [2d Dept 2003]; Whitman Realty Group, Inc. v. Galano, 2007 NY Slip Op 5266, 2 [2d Dept., 2007]). Neither party denies the existence of a valid and enforceable contract, in fact, both parties recognize its validity, as a result the plaintiffs' causes of action based upon unjust enrichment are hereby dismissed.

Plaintiffs Causes of Action alleging Conversion

"A cause of action alleging conversion of funds must allege legal ownership or an [*3]immediate right of possession to specifically identifiable funds and that the defendants exercised an unauthorized dominion over such funds to the exclusion of the plaintiff's rights'" (Zendler Constr. Co., Inc. v. First Adj Group, Inc., 59 AD3d 439, 440 [2d Dept., 2009]). Furthermore, " [t]he mere right to payment cannot be the basis for a cause of action alleging conversion" (id.).

Here, defendants have established their right to summary judgment on the plaintiff's conversion causes of action (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Herrin v Airborne Freight Corp., 301 AD2d 500, 500-501 [2d Dept 2003]; Zendler Constr. Co., Inc. v. First Adj Group, Inc., 59 AD3d 439, 440 [2d Dept., 2009]). The defendants have established that the plaintiffs claims are for payment of services provided and thus are inappropriate for a conversion claim. In opposition, the plaintiffs have failed to provide evidence that they had an immediate right of possession of the funds claimed. As such, summary judgment is appropriate on the plaintiffs causes of action for conversion.

Plaintiffs Causes of Action alleging New York State Labor Law Art. 6 Violations

Plaintiffs claims under Labor Law Article 6 are improper. A cause of action under New York State Labor Law Article 6 is only viable if the employee prevails on the underlying wage claim, which at this point has not occurred and as such summary judgment is appropriate on plaintiffs' causes of action based upon Labor Law Article 6 (Winsch v. Esposito Bldg. Specialty Inc., 48 AD3d 558, 559 [2d Dept., 2008]; NYS Labor Law § 198). The plaintiffs are entitled to recover based upon Labor Law Article 6 if they prevail on the underlying causes of action.

Plaintiffs Causes of Action alleging Attorneys Fees

It is well settled that where expressly provided for, attorneys fees are recoverable (Luis Lopez & Sons Inc. v. Dannies Auto Care, 61 AD3d 643, 643-644 [2d Dept., 2009]). Here, while the contract does provide for attorneys fees it does so under the Restrictive Covenant portion which was held unenforceable by J. Philip Minardo, as a result, attorneys fees are not recoverable in the instant action and plaintiffs causes of action to recover attorneys fees are hereby dismissed.

Plaintiffs Causes of Action requesting an Accounting

"The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest.'" And "an employer-employee relationship providing for the division of profits will not give rise to a fiduciary obligation on the part of the employer absent an agreement to also share losses" (LoGerfo v. Trustees of Columbia Univ. in City of New York, 35 AD3d 395, 397 [2d Dept., 2006]). Here, the parties have a valid and enforceable contract, the terms of which are in dispute, but nothing that gives rise to a fiduciary relationship more than just employee/employer, and as such summary judgment on plaintiffs' causes of action that request an accounting is hereby granted and such causes of action are hereby dismissed.

Plaintiffs Tort Causes of Action

With respect to plaintiffs causes of action alleging independent torts, the claims are inappropriate and plaintiffs have failed to oppose defendant's successful argument for dismissal whereby alleged breach of contract causes of action, without evidence to the contrary of an independent tort, are not tort causes of action (Clemens Realty, LLC v. NYC Dept. Of Educ., 47 [*4]AD3d 666, 666-667 [2d Dept., 2008][holding that "[a] simple breach of contract [cause of action] is not to be considered a tort unless a legal duty independent of the contract itself has been violated. This legal duty must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent upon the contract"]). Here, the plaintiffs' failed to show any legal duty beyond the breach of contract and thus, the tort causes of action against defendants are hereby granted summary judgment.

Plaintiffs Causes of Action for Punitive Damages

Generally, "New York does not recognize an independent cause of action for punitive damages. Instead, [a] demand or request for punitive damages is parasitic and possesses no viability absent its attachment to a substantive cause of action'" (Randi A. J. v. Long Is. Surgi-Center, 46 AD3d 74, 80-81 [2d Dept., 2007]; Rocanova v Equitable Life Assur. Socy. of U.S., 83 NY2d 603, 616 [1994]). Further, "it is well-settled that conduct warranting an award of punitive damages need not be intentionally harmful but may consist of actions which constitute willful or wanton negligence or recklessness'" ( Randi A. J. v. Long Is. Surgi-Center,46 AD3d 74, 80-81 [2nd Dept., 2007]; Home Ins. Co. v American Home Prods. Corp., 75 NY2d 196, 204 [1990]). To warrant an award of punitive damages the conduct complaint of must be "[s]uch wantonly negligent or reckless" and "sufficiently blameworthy" as to act as a deterrent for future conduct, as public policy dictates (Randi A. J. v. Long Is. Surgi-Center,46 AD3d 74, 80-81 [2nd Dept., 2007]; Doe v Roe, 190 AD2d 463, 474-475 [4th Dept., 1993]).

With respect to breach of contract cases,

"punitive damages are not recoverable in an ordinary breach of contract case, as their purpose is not to remedy private wrongs but to vindicate public rights. Punitive damages are only recoverable where the breach of contract also involves a fraud evincing a high degree of moral turpitude, and demonstrating such wanton dishonesty as to imply a criminal indifference to civil obligations, and where the conduct was aimed at the public generally" (Tartaro v. Allstate Indem. Co., 56 AD3d 758, 758 [2d Dept., 2008]).Further, "[p]unitive damages are available where the conduct associated with the breach of contract is first actionable as an independent tort for which compensatory damages are ordinarily available, and is sufficiently egregious to warrant the additional imposition of exemplary damages. A party must demonstrate not only egregious tortious conduct, but also that such conduct was part of a pattern of similar conduct directed at the public generally" (id.).

Here, the defendants have met their burden entitling them to summary judgment on plaintiffs' causes of action alleging for punitive damages (Chance v. Felder, 33 AD3d 645, 645-646 [2d Dept 2006]; Zuckerman v. City of New York, 49 NY2d 557 [1980]; Tartaro v. Allstate Indem. Co., 56 AD3d 758, 758 [2d Dept., 2008]). Specifically, defendant Lederman established that the alleged behavior was not intentional nor a complete wanton disregard for the plaintiffs well being to warrant punitive damages. In addition, the defendant showed that their alleged conduct was not egregious or of high moral turpitude and thus, was not actionable as an independent tort. Furthermore, there is no evidence of a pattern of egregious conduct directed toward the public at large. In opposition, the plaintiff has failed to sufficiently raise triable issues of fact (Tartaro v. Allstate Indem. Co., 56 AD3d 758, 758 [2d Dept., 2008]). As such, summary judgment on the plaintiffs' punitive damages causes of action is hereby granted and the complaint [*5]is dismissed as such.

Plaintiffs Fraud Causes of Action

In bringing a cause of action for fraud the plaintiff "must prove a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" (Lama Holding Co. v. Smith Barney Inc., 88 NY2d 413, 421[1996]; Tenenbaum v. Gibbs, 27 AD2d 722, 723 [2d Dept., 2006]).

Here, the defendant has established summary judgment with respect to plaintiffs' fraud claims (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Herrin v Airborne Freight Corp., 301 AD2d 500, 500-501 [2d Dept 2003]; Lama Holding Co. v. Smith Barney Inc., 88 NY2d 413, 421[1996]; Tenenbaum v. Gibbs, 27 AD2d 722, 723 [2d Dept., 2006]). The plaintiff has failed to prove the elements of a cause of action for fraud, namely, a material omission, known to be false and made to induce the plaintiff's to rely upon it (Lama Holding Co. v. Smith Barney Inc., 88 NY2d 413, 421[1996]). As a result, summary judgment on the plaintiff's fraud causes of action is granted.

Accordingly, it is

ORDERED that the defendant's motion for summary judgment on the plaintiffs causes of action for breach of contract is hereby denied, and it is further

ORDERED that the defendant's motion for summary judgment on the plaintiffs causes of action based upon unjust enrichment is hereby granted and the complaint is dismissed with respect to the claims of unjust enrichment, and it is further

ORDERED that defendant's motion for summary judgment on plaintiffs causes of action based upon conversion is hereby granted and the complaint is dismissed with respect to the claims of conversion against defendants, and it is further

ORDERED that defendant's motion for summary judgment on plaintiffs causes of action based on NYS Labor Law Art. 6 is hereby granted and the complaint is dismissed with respect to those claims, and it is further

ORDERED that the defendant's motion for summary judgment on plaintiffs causes of action to recover attorneys fees in connection with this action is hereby granted and the complaint is dismissed with respect to those causes of action, and it is further

ORDERED that defendant's motion for summary judgment on plaintiffs causes of action for tortious conduct is hereby granted and the complaint is dismissed with respect to those causes of action, and it is further

ORDERED that the defendant's motion for summary judgment on plaintiffs punitive damages causes of action is hereby granted and the complaint is dismissed with respect to the punitive damage causes of action, and it is further

ORDERED that the defendant's motion for summary judgment on the plaintiffs causes of action alleging fraud is hereby granted and the complaint is dismissed with respect to those causes of action, and it is further [*6]

ORDERED that any and all additional requests for relief are hereby denied, and it is further

ORDERED that the Clerk enter Judgment accordingly.

THIS IS THE DECISION AND ORDER OF THE COURT.

ENTER,

Dated: December 21, 2009

Hon. Judith N. McMahon

Justice of the Supreme Court