McCabe v Command Fin. Press Corp.
Annotate this CaseDecided on July 20, 2020
Supreme Court, New York County
Peter McCabe, Plaintiff,
against
Command Financial Press Corporation, Defendant.
655649/2017
Cozen O'Connor, New York, NY (Rachel H. Bevans and Paul K. Leary of counsel), for plaintiff.
Donnelly Minter & Kelly, LLC, Morristown, NJ (Jared J. Limbach of counsel), for defendant.
Gerald Lebovits, J.
This action arises out of a dispute over post-employment compensation under a 2011 employment agreement between plaintiff Peter McCabe and defendant Command Financial Press Corporation.
Section 4 of the agreement describes plaintiff's compensation. That section provides that plaintiff will be paid an annual salary of $165,000 and a 5% commission on certain specified categories of sales. (See NYSCEF No. 24 at 3.) Section 4 also provides that defendant will increase plaintiff's commission rate on a third category of sales (pertaining to SCAPS, a [*2]particular type of automated publishing system) from 2.5% to 3.5%; this "additional one (1%) percent commission will be calculated retroactive from the date of this Agreement to January 1, 2011, and will be paid upon the execution of this Agreement, by commission check processed with next subsequent payroll run." (Id. at 3-4.)
Section 8 of the agreement provides that if plaintiff's employment were to expire or be terminated (other than firing for cause or voluntary resignation), then defendant would thereafter pay plaintiff specified commissions on revenue from SCAPS for three years. (Id. at 8.)
Defendant issued three commission payments to plaintiff under § 4 during the term of the agreement. Defendant did not renew the agreement, and plaintiff's employment expired in 2016. After the expiration of the agreement, defendant paid plaintiff commission on SCAPS revenue for three years under the terms of § 8. Plaintiff claims that after his term of employment ended, he also was permanently entitled under § 4 to be paid 3.5% commission on SCAPS sales—and that defendant breached their agreement by failing to pay him that commission.
Plaintiff now moves for summary judgment under CPLR 3212, seeking a declaratory judgment as to defendant's obligations under the contract, and judgment in his favor on his breach-of-contract claim. Defendant cross moves for summary judgment on all causes of action. Plaintiff's motion for summary judgement is denied. Defendant's cross-motion is granted.
DISCUSSION
Plaintiff argues that according to the agreement, he is entitled to receive 3.5 percent commission on SCAPS sales even after the expiration of his term of employment. The agreement provides otherwise.
"Where the terms of a contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving a practical interpretation to the language employed and reading the contract as a whole." (Ellington v EMI Music, Inc., 24 NY3d 239, 244 [2014].) A written agreement that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of its terms. (Greenfield v Philles Records, 98 NY2d 562, 569 [2002].) Extrinsic evidence of the parties' intent may be considered when interpreting contract only if the agreement is ambiguous.
This court concludes that the employment agreement here, read as a whole, is clear and unambiguous about compensation. Section 4, which begins "[d]uring the Term of this Agreement" (NYSCEF No. 24 at 3), addresses compensation only during plaintiff's term of employment. Section 8, which begins "[i]n the event of the termination or expiration of the Employee's employment" (id. at 8), discusses compensation only after termination of the agreement.
Plaintiff argues that under § 4 he is entitled to receive commission payments in perpetuity. But § 4 contains no language stating or indicating that the commissions described therein would persist in perpetuity—as one would expect to find had defendant in fact agreed to this strikingly generous arrangement.
Additionally, if defendant was indeed agreeing to pay plaintiff post-employment commissions (let alone in perpetuity), one would expect to find language to that effect in § 8, which expressly governs post-employment compensation, rather than in § 4. Moreover, § 8 expressly limits carves out exceptions to defendant's obligation to pay post-employment commissions—for example if plaintiff were to be fired for cause. (See NYSCEF No. 24 at 8.) [*3]Section 4 contains no such exceptions. Thus, on plaintiff's interpretation, defendant would be obliged to pay him commissions for life even if he were fired for cause two weeks into his employment term. Nothing in the language of § 4 requires such an absurd result.
To be sure, as plaintiff argues, § 4 (a) provides expressly that it applies "[d]uring the Term of this Agreement," and § 4 (b) does not. (NYSCEF No. 24 at 3.) But this difference does not bear the weight that plaintiff would place on it. Section 4 (b) states that plaintiff "will also be paid commissions" based on a specified structure. (Id. at 3 [emphasis added].) That is, those commissions are to be paid on top of plaintiff's annual salary, not as a free-standing—and perpetual—form of compensation. The only reasonable interpretation of these two paragraphs, read together, is that both the salary and commissions described in § 4 are owed by defendant to plaintiff only during the term of plaintiff's employment.[FN1]
Accordingly, it is hereby
ORDERED that plaintiff's motion under CPLR 3212 for summary judgment in his favor is denied; and it is further
ORDERED that defendant's cross-motion under CPLR 3212 for summary judgment is granted and the complaint is dismissed, with costs and disbursements to defendant as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.
DATE 7/20/2020 Footnotes
Footnote 1:Even if the agreement were ambiguous—and it is not—extrinsic evidence in the record supports defendant's reading, rather than plaintiff's. On December 21, 2011, during final negotiations of the agreement, plaintiff sent an email to defendant's CEO, explaining that he had modified the draft § 8 to protect his own interests if the agreement were not renewed. But plaintiff said nothing about post-employment commission payments under § 4, as one would expect if that provision also protected his interests absent a renewal of the agreement. (See NYSCEF No. 47.)
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