| Grassi & Co., CPAs, P.C. v Janover Rubinroit, LLC |
| 2011 NY Slip Op 01614 [82 AD3d 700] |
| March 1, 2011 |
| Appellate Division, Second Department |
| Grassi & Co., CPAs, P.C., Appellant, v Janover Rubinroit,LLC, et al., Respondents. |
—[*1] Moritt Hock Hamroff & Horowitz, LLP, Garden City, N.Y. (William P. Laino of counsel),for respondents.
In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals (1)from stated portions of an order of the Supreme Court, Nassau County (Warshawsky, J.), enteredNovember 2, 2009, which granted those branches of the defendants' motion which were forsummary judgment dismissing the first, second, third, fourth, fifth, sixth, seventh, and eighthcauses of action, and granted that branch of the motion which was for summary judgmentdismissing the ninth cause of action insofar as asserted against the defendant Barry Schosid, (2)from stated portions of an order of the same court entered December 8, 2009, which, inter alia,granted those branches of the defendants' motion which were for summary judgment dismissingthe first, second, third, fourth, fifth, sixth, seventh, and eighth causes of action, and granted thatbranch of the motion which was for summary judgment dismissing the ninth cause of actioninsofar as asserted against the defendant Barry Schosid, and (3) as limited by its brief, from somuch of an order and judgment (one paper) of the same court dated January 6, 2010, as, upon theorder entered December 8, 2009, granted those branches of the defendants' motion which werefor summary judgment dismissing the first, second, third, fourth, fifth, sixth, seventh, and eighthcauses of action, and granted that branch of the motion which was for summary judgmentdismissing the ninth cause of action insofar as asserted against the defendant Barry Schosid anddismissed the first through eighth causes of action and the ninth cause of action insofar asasserted against Barry Schosid.
Ordered that the appeals from the orders entered November 2, 2009, and December 8, 2009,are dismissed; and it is further,
Ordered that the order and judgment is affirmed insofar as appealed from; and it is further,
Ordered that one bill of costs is awarded to the defendants.[*2]
The appeal from the intermediate orders must bedismissed because the right of direct appeal therefrom terminated with the entry of judgment inthe action (see Matter of Aho, 39 NY2d 241, 248 [1976]). The issues raised on appealsfrom the orders are brought up for review and have been considered on the appeal from the orderand judgment (CPLR 5501 [a] [1]).
The plaintiff and the defendant Janover Rubinroit, LLC (hereinafter Janover), are rivalaccounting firms. The defendants James Logan and Barry Schosid were employed by theplaintiff, and subsequently, within one year of commencing employment with the plaintiff, left itsemploy and began working for Janover. It is undisputed that Logan and Schosid brought anumber of clients with them when they began working for the plaintiff. It is also undisputed thata number of these clients ceased being serviced by the plaintiff at approximately the time whenLogan and Schosid's employment with the plaintiff terminated.
At the core of several of the causes of action asserted here are the confidentiality provisionsand the restrictive covenants, including "reimbursement clauses," contained in Logan's andSchosid's employment agreements with the plaintiff. However, the defendants are correct that therestrictive covenant and the reimbursement clauses were unenforceable as to Schosid. Becausethe plaintiff terminated Schosid's employment without cause, the "mutuality of obligation" onwhich the covenant depended, and which enabled the plaintiff as employer to impose a forfeiture,ceased to exist, and, accordingly, as to Schosid, these provisions were unenforceable (seePost v Merrill Lynch, Pierce, Fenner & Smith, 48 NY2d 84, 89 [1979]; Borne Chem. Co.v Dictrow, 85 AD2d 646, 649 [1981]).
We agree with the defendants' interpretation of the reimbursement clauses as providing, inpart, that, where, as here, the employee left the plaintiff's employ within his or her first year ofemployment, and the plaintiff did not pay the employee's prior employer for the right to servicethe client for whom the plaintiff is seeking reimbursement based on that client's departing, noobligation to reimburse the plaintiff arises. Here, it is undisputed that both Logan and Schosidleft the plaintiff's employ within one year after being hired by the plaintiff. Therefore, under theplain terms of the reimbursement clauses (see generally Greenfield v Philles Records, 98NY2d 562, 569-570 [2002]; AnitaBabikian, Inc. v TMA Realty, LLC, 78 AD3d 1088 [2010]), Logan (and Schosid had theprovisions been applicable to him) would not be obligated to reimburse the plaintiff for thedeparture of certain clients who ended their relationship with the plaintiff after Logan andSchosid left the plaintiff's employ, since the plaintiff did not pay a fee to Logan and Schosid'sprior employer to gain the right to service those clients. As to those clients for whom the plaintiffpaid Logan and Schosid's prior employer, nonparty RSM McGladrey, Inc. (hereinafter RSM), forthe right to service, the defendants established, among other things, that Logan did not cause anyof those clients to end their relationships with the plaintiff within the meaning of thereimbursement clauses. In opposition, the plaintiff failed to raise a triable issue of fact (seeZuckerman v City of New York, 49 NY2d 557, 562 [1980]). Additionally, to the extent thatSchosid caused the departure from the plaintiff of any of the clients who worked with him atRSM, as previously stated, the reimbursement clauses are unenforceable against him.
As to the remaining causes of action at issue on the plaintiff's appeal, sounding in, amongother things, conversion and tortious interference with contract, the defendants established theirprima facie entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68NY2d 320, 324 [1986]). The plaintiff's arguments in opposition were based solely upon surmise,conjecture, and suspicion, and were insufficient to raise a triable issue of fact to defeat thedefendants' motion for summary judgment (see e.g. Rendon v Castle Realty, 28 AD3d 532, 533 [2006]).
The plaintiff's remaining contentions are without merit. Skelos, J.P., Dickerson, Belen andLott, JJ., concur. [Prior Case History: 2009 NY Slip Op 32620(U).]