Garg v Wyckoff Hgts. Med. Ctr., Inc.

[*1] Garg v Wyckoff Hgts. Med. Ctr., Inc. 2013 NY Slip Op 52272(U) Decided on December 30, 2013 Supreme Court, Kings County Schmidt, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 30, 2013
Supreme Court, Kings County

Rajiv Garg, Plaintiff,

against

Wyckoff Heights Medical Center, Inc., Defendant.



7631/13



Plaintiff Attorney: Ken Sutak, Esq., Franklin, Gringer & Cohen, P.C., 150 East 58th Street, 27th Floor, New York, NY 10155

Defendant Attorney: Marcus Asner, Esq., Arnold & Porter, LLP, 399 Park Avenue, New York, NY 10022

David I. Schmidt, J.

following papers numbered 1 to 4 read on this motion:

Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1

Opposing Affidavits (Affirmations)

Reply Affidavits (Affirmations)

Affidavit (Affirmation)

Other Papers2-4 [*2]

Upon the foregoing papers, defendant Wyckoff Medical Center (Wyckoff) moves pursuant to CPLR 3211 (a) (7) for an order dismissing the first, third and fourth causes of action in plaintiff Rajiv Garg's amended complaint with prejudice for failure to state a cause of action.

Background

In 2010, plaintiff entered into an agreement with Wyckoff to serve as its President and CEO for a term commencing on December 1, 2010 and ending on December 31, 2014. In December 2011, plaintiff was asked to resign as President and CEO by the Wyckoff Board of Trustees. Plaintiff maintains that on or about December 23, 2011, he was verbally informed that the Board wished to replace him with a member of a State Task Force that had been charged with making recommendations for reorganizing the delivery of hospital care in Brooklyn. The Task Force had recommended that Wyckoff be merged with two other hospitals, a proposal that plaintiff himself had made in or about April 2011. Plaintiff claims that the task force member that the Board wished to replace him with was opposed to the proposed merger.

Plaintiff commenced the instant ligation alleging that Wyckoff violated the terms of his employment agreement in several respects including failing to provide him with written notice of termination and that he is entitled to damages related to Wyckoff's failure to inform him of the cancellation of his employee benefits and the wrongful withholding of wages due him.

Wyckoff's Motion

Wyckoff moves pursuant to CPLR 3211 (a) (7) for an order dismissing the first, third and fourth causes of action in plaintiff Rajiv Garg's amended complaint with prejudice for failure to state a cause of action. When a party moves to dismiss a complaint pursuant to CPLR 3211(a)(7), the standard is whether the pleading states a cause of action, not whether the proponent of the pleading has a cause of action" (Bokhour v GTI Retail Holdings, Inc., 94 AD3d 682, 682 [2012] quoting Sokol v Leader, 74 AD3d 1180, 1180—1181 [2010]; see Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). "In considering such a motion, the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Sokol, 74 AD3d at 1181[internal quotation marks omitted]; see Nonnon v City of New York, 9 NY3d 825, 827 [2007]). " Whether a plaintiff can ultimately establish its allegations is not part of the calculus' " (Sokol, 74 AD3d at 1181, quoting EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]).

Plaintiff's first cause of action alleges a breach of plaintiff's employment agreement with Wyckoff for failure to provide written notice of his termination, failing to pay plaintiff his salary payable under the employment agreement from the week ending December 31, 2011 through the date of the filing of the complaint, and failing to provide health benefits to plaintiff after April 30, 2012. Wyckoff argues that this cause of action should be dismissed because an employer's failure to provide advance notice of his termination does not render such termination ineffective where, as here, the employment contract provides for an absolute right of termination. Thus Wyckoff maintains that since the employment agreement gives Wyckoff an absolute right to terminate plaintiff's employment, and inasmuch as the first cause of action is premised on the allegation that, by failing to provide written notice of termination, Wyckoff could not terminate plaintiff, it fails to state a cause of action. Additionally, Wyckoff claims that at best plaintiff would be entitled to no more than 90 days worth of salary and benefits for Wyckoff's alleged breach of the advance notice requirement, as the employment agreement merely required a 90 day written notice in the event of a termination without cause. Wyckoff contends that such relief is already subsumed in plaintiff's second cause of action which seeks, in addition to severance payments, "an additional sum equal to [*3]an additional three months salary for the ninety-day required notice period under the employment agreement.

In opposition, plaintiff contends that his first cause of action is actually"an alternative breach of contract action, based on the opposite premise to the premise of the second cause of action." That is, he is claiming that because of the absence of any written notice of termination from Wyckoff to him, he is in fact still an employee under the terms of the employment agreement and thus Wyckoff has breached said agreement by failing to pay him his regular contractual salary from December 31, 2011 up to the date of the filing of the complaint. Plaintiff argues that Wyckoff never gave him the requisite written notice, nor has he been given any basis by Wyckoff to believe that he was asked to "step down" from his position for any reason that could be construed as being "for cause." Plaintiff contends that three representatives of Wyckoff's Board of Trustees verbally informed him that the Board wanted him to step down as President and CEO and that they fully intended to honor Wyckoff's contractual obligation to plaintiff under the employment agreement in connection with a termination without cause. Additionally, he claims that they specifically mentioned severance payments and the continuation of benefits. Plaintiff further points out that a request to "step down" is not the same thing as a notice of termination. Plaintiff argues that the statutory requirement that an employee be given written notice of termination is a condition precedent to an employer's ability to claim that an employee was terminated as of a certain date.

Labor Law §195 (6) states that every employer shall: notify any employee terminated from employment, in writing, of the exact date of such termination as well as the exact date of cancellation of employee benefits connected with such termination. In no case shall notice of such termination be provided more than five working days after the date of such termination. Failure to notify an employee of cancellation of accident or health insurance subjects an employer to an additional penalty pursuant to section two hundred seventeen of this chapter.

The Second Department in Hugo v A & A Maintenance Enter., 269 AD2d 357, 358 [2000] in discussing the legislative history of Labor Law §195 (6) found that: The legislative history of the amendments indicates that they were enacted to ensure continued insurance coverage and benefits for employees and/or to minimize the impact of an unexpected termination of employment on an employee's benefits (see, Mem of State Dept of Labor, 1989 McKinney's Session Laws of NY, at 2191-2192). There is no indication in the legislative history that the intent of the Legislature in amending Labor Law § 195 (6) was to provide for an employee's continued employment in the absence of a written notice of termination. The statute itself does not provide for such a penalty. Thus, the plaintiffs' contention that the defendant's failure to comply with the written notice provisions of Labor Law § 195 (6) requires a finding that their employment was not terminated is without merit. "

Similarly, in the instant case, plaintiff contends that his first cause of action is "an alternative breach of contract action, that because of the absence of any written notice of termination from [*4]Wyckoff to him, he is in fact still an employee under the terms of the employment agreement and Wyckoff has breached said agreement by failing to pay him his regular contractual salary from December 31, 2011 up to the date of the filing of the complaint. Based upon the Second Department's holding in Hugo, that branch of Wyckoff's motion seeking to dismiss plaintiff's first cause of action pursuant to CPLR 3211 (a) (7) is granted and said claim is hereby dismissed.

Plaintiff's third cause of action alleges a violation of Labor Law §§195 (6) and 217 and states that Wyckoff was required to give plaintiff written notice of the termination of his employment and written notice of the exact date of cancellation of his employee benefits. Wyckoff argues that this claim should be dismissed because plaintiff acknowledges that he was notified on or about April 26, 2012 that his health benefits would terminate on midnight of April 30, 2012. Thus, Wyckoff states that because plaintiff has failed to allege that Wyckoff violated §195 (6) at all, said claim should be dismissed. Wyckoff argues that should the court allow this cause of action to go forward the claim should be limited to the reimbursement of medical expenses which were not covered by the policyholder's insurer by virtue of its termination of the policy pursuant to Labor Law §217 (7) (b).

In opposition, plaintiff argues that he was not provided with notice that his employee benefits would be canceled until April 26, 2012, approximately four months after he was verbally asked to step down.

As discussed above, Labor Law §195 (6) requires that an employer "notify any employee terminated from employment, in writing, of the exact date of such termination as well as the exact date of cancellation of employee benefits connected with such termination. In no case shall notice of such termination be provided more than five working days after the date of such termination. Failure to notify an employee of cancellation of accident or health insurance subjects an employer to an additional penalty pursuant to section two hundred seventeen of this chapter."

Here it is undisputed that Wyckoff failed to provide plaintiff with notice of the cancellation of his health benefits within the requisite five day period as required under Labor Law §195 (6). Therefore, that branch of Wyckoff's motion seeking dismissal of this claim for failure to state a cause of action is denied.

Plaintiff's fourth cause of action alleges a violation of Labor Law §§190 and 198 claiming that Wyckoff failed to pay plaintiff all wages he was due and that he is thus entitled to "liquidated damages" including two times the total amount of plaintiff's annual salary continuation or severance payments due to plaintiff pursuant to his employment agreement.

Wyckoff points out that plaintiff was paid for all of his work up until the date of his termination and thus his claim for unpaid wages must relate to Wyckoff's alleged failure to pay him severance payments. Wyckoff argues that an executive does not have a cause of action under Labor Law §190 for the payment of a severance package. Moreover, Wyckoff points out that severance payments are covered under the definition of "benefits or wage supplements" in Labor Law §198-c and because subsection (3) of this statute expressly excludes from coverage "any person in a bona fide executive, administrative, or professional capacity whose earnings are in excess of nine hundred dollars a week, plaintiff fails to state a valid claim.

In opposition, plaintiff argues that his claim is not based solely on Wyckoff's failure to pay him severance payments, but also its failure to pay him the remainder of his salary for the employment agreement's 90 day notice period. He argues that unlike severance pay, the 90 days salary that he is entitled to under his employment contract is wages.

"Labor Law § 190 (1) defines "wages," in pertinent part, as "earnings of an employee for labor or services rendered . . . includ[ing] benefits or wage supplements as defined in" Labor Law § 198-c, which requires "any employer who is a party to an agreement to pay . . . benefits or wage supplements to employees" to pay those benefits or wage supplements within 30 days after such [*5]payments are required to be made (Labor Law § 198-c [1]). Labor Law § 198-c (2) defines "benefits or wage supplements" as "includ[ing] . . . but . . . not limited to, reimbursement for expenses; health, welfare and retirement benefits; and vacation, separation or holiday pay." Labor Law § 198-c (3) states that Labor Law § 198-c "shall not apply to any person in a bona fide executive, administrative, or professional capacity whose earnings are in excess of nine hundred dollars a week."(Fraiberg v 4Kids Entertainment, Inc., 75 AD3d 580, 583 [2010]; see Romanello v Intesa Sanpaolo S.p.A., 97 AD3d 449, 455 [2012] ).

Here it is undisputed that plaintiff served in an executive capacity during his tenure at Wyckoff earning in excess of $900 per week, thus he is precluded by the express terms of the statute from pursing this cause of action. Accordingly, that branch of Wyckoff's motion seeking dismissal of plaintiff's fourth cause of action is granted and said claim is hereby dismissed.

The foregoing constitutes the decision and order of the court.

E N T E R,

December 30, 2013

J. S. C.