| Ryan v Kellogg Partners Inst. Servs. |
| 2010 NY Slip Op 08983 [79 AD3d 447] |
| December 7, 2010 |
| Appellate Division, First Department |
| Daniel Ryan, Respondent, v Kellogg Partners InstitutionalServices, Appellant. |
—[*1] Law Offices of Thomas S. Rosenthal, New York (Thomas S. Rosenthal of counsel), forrespondent.
Judgment, Supreme Court, New York County (Saliann Scarpulla, J., and a jury), entered February24, 2010, awarding plaintiff the total sum of $379,956.65, and bringing up for review an order, samecourt and Justice, entered January 6, 2010, which, inter alia, denied defendant's motion for a directedverdict, for judgment notwithstanding the verdict or for a new trial, and granted plaintiff's cross motionfor attorney's fees and costs pursuant to Labor Law § 198 (1-a), and an order, same court andJustice, entered February 22, 2010, which amended the order entered January 6, 2010 to denydefendant's motion at trial to amend its answer and affirmative defenses, affirmed, without costs.Appeal from the January 6, 2010 order, unanimously dismissed, without costs, as subsumed in theappeal from the judgment.
Supreme Court properly denied defendant's motions for a directed verdict (CPLR 4401), and forjudgment notwithstanding the verdict or for a new trial (CPLR 4404 [a]). Regardless of theemployment application and employee handbook, the jury found that the parties entered into bindingoral agreements whereby plaintiff was to leave his current employment to work for defendant andreceive a bonus of $175,000 at the end of one year, payment of which was orally extended to the endof the following year. The verdict is based on sufficient evidence and is not against the weight of theevidence (see Cohen v Hallmark Cards, 45 NY2d 493, 499 [1978]).
The trial court correctly determined that defendant waived reliance on statutory provisions requiringan agreement to be reduced to a writing (General Obligations Law §§ 5-701, 5-1103,5-1105) by failing to plead the statute of frauds as an affirmative defense in its answer (CPLR 3018 [b];see 23/23 Communications Corp. v General Motors Corp., 257 AD2d 367, 367 [1999],lv denied 93 NY2d 805 [1999]). The court also providently exercised its discretion in denyingdefendant's trial motion to amend his pleadings to assert these provisions, particularly since the motionwas interposed after the close of plaintiff's evidence (see Mayers v D'Agostino, 58 NY2d 696[1982]).
Even if defendant had not waived the statute of frauds, the court properly determined that thesubject General Obligations Law provisions do not apply to the facts of this case. Contrary todefendant's contention, the oral agreements to pay plaintiff a bonus were not based solely on past [*2]consideration, but on present and future consideration, respectively,plaintiff's promises to leave his current employer to join defendant and to work for defendant until theend of the year (see Gruber v J.W.E. Silk,Inc., 52 AD3d 339, 340 [2008]), and thus the court correctly declined to charge GeneralObligations Law § 5-1105. Furthermore, because defendant disputed the existence of the oralagreements, and the agreements were capable of completion within one year, including the 2004agreement which was supported by separate and new consideration, the court correctly declined tocharge General Obligations Law § 5-701 (a) (1) and § 5-1103 (cf. J.R. Loftus, Inc. vWhite, 85 NY2d 874, 876 [1995]; Weisse v Engelhard Mins. & Chems. Corp., 571 F2d117 [1978]).
The court correctly determined that plaintiff's breach of contract claim was not barred by theprovisions of defendant's employee handbook or his employment application. Those documents did notclearly indicate that bonuses are discretionary (cf.Smalley v Dreyfus Corp., 40 AD3d 99, 106 [2007], revd on other grounds 10NY3d 55 [2008]; Kaplan v Capital Co. of Am., 298 AD2d 110, 111 [2002], lv denied99 NY2d 510 [2003]), and whether the $175,000 payment was intended to be a discretionarybonus or earned income was a factual question for determination by the jury (see Weiner v DieboldGroup, 173 AD2d 166, 167 [1991]).
The court providently exercised its discretion to preclude inquiry into plaintiff's financialcommitments at the time he entered into the oral agreements with defendant. As the court determined,plaintiff's personal life was a collateral matter that had no direct bearing on any issue in this case otherthan credibility (see generally Crooms vSauer Bros. Inc., 48 AD3d 380, 381 [2008]). Moreover, any possible prejudice to defendantwas alleviated by plaintiff's testimony that he found it necessary to take out a $50,000 loan against his401(k) account as a result of not being paid his bonus.
The court properly determined that plaintiff was entitled to attorney's fees under New York LaborLaw § 198 (1-a). Contrary to defendant's contention, the type of bonus agreement involved inthis case, i.e., a non-discretionary bonus based on labor and services rendered, constitutes "wages"within the meaning of Labor Law § 190 (1) (cf. Truelove v Northeast Capital &Advisory, 95 NY2d 220, 224 [2000]; Hunter v Deutsche Bank AG, N.Y. Branch, 56 AD3d 274 [2008]).Concur—Tom, J.P., Acosta and RomÁn, JJ.
Friedman and McGuire, JJ., dissent in a memorandum by McGuire, J., as follows: I would reverseand dismiss the complaint on the ground that plaintiff's breach of contract claim is barred by theemployment application he signed and the employee handbook. With respect to the former, plaintiffacknowledged his understanding that none of appellant-employer Kellogg Partners' "policies orprocedures . . . carry any guarantee of employment for any length of time and that myemployment, compensation and benefits are at will and can be terminated, with or without cause ornotice, at any time, at the option of [employer] or myself." The majority upholds plaintiff's claim ofentitlement to a bonus on the ground that the language just quoted does not "clearly indicate thatbonuses are discretionary." Even assuming that the application or handbook must "clearly indicate" thatbonuses are discretionary, that requirement was easily satisfied. Although the [*3]majority is not clear on the point, it may be of the view that the word"bonus" must appear in either the application or the handbook. If so, suffice it to say that none of thecases the majority cites so holds and that, at least in this context, it makes no sense to insist that anemployer use a specific rather than a more encompassing word (cf. Bazak Intl. Corp. v MastIndus., 73 NY2d 113, 125 [1989] [rejecting significance in commercial case of failure of merchantto use "magic words"]). I need not determine whether appellant also is entitled to reversal on the othergrounds it raises.