| Silber v New York Life Ins. Co. |
| 2012 NY Slip Op 00816 [92 AD3d 436] |
| February 7, 2012 |
| Appellate Division, First Department |
| Zalman Silber, Appellant, v New York Life InsuranceCompany, Respondent. |
—[*1] Morgan, Lewis & Bockius LLP, New York (Michael L. Banks of the bar of the State ofPennsylvania, admitted pro hac vice, of counsel), for respondent.
Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered on or about April18, 2011, which, inter alia, upon a search of the record, granted defendant summary judgmentdismissing the complaint, unanimously affirmed, with costs.
The determination of this appeal requires the Court to invoke the most basic tenets ofcontract law. Plaintiff worked as a life insurance agent for defendant from 1987 until his agencycontract was terminated on July 16, 2008. By summons and verified complaint dated May 12,2010, plaintiff commenced this breach of contract action. Plaintiff claims that defendant'stermination of plaintiff and refusal to reinstate him or credit him with service time towards hisretirement benefit violated an oral agreement between the parties, which caused plaintiffapproximately $3,000,000 in damages.
Prior to discovery, plaintiff moved for summary judgment as to liability, arguing that theparties had entered into an oral agreement "that [p]laintiff would resign from [d]efendant pendingthe sale of his interest in a life settlement company . . . following which he was tobe reinstated." Plaintiff asserted that the agreement was then memorialized in a letter fromdefendant to plaintiff. Plaintiff also argued that defendant should be equitably estopped fromdenying that it agreed to reinstate plaintiff if he divested himself of his outside interests.
In opposition to the motion, defendant submitted an affidavit attesting to the following: InNovember 2007, defendant learned that plaintiff had an ownership interest in a life settlementcompany, which purchased blocks of life insurance policies previously viaticated by their ownersand then sold them to other financial institutions, including several prominent hedgefunds.[FN1][*2]
Defendant asserts that it prohibits its agents fromparticipating in such business because the industry is underregulated, with significant potentialfor fraud and abuse. Defendant further asserts that plaintiff never disclosed his interest in thisbusiness to defendant nor secured approval as required by defendant's company rules. In a March2008 meeting, plaintiff was advised that he would be required to divest himself of his interest inthe business. Defendant states that despite subsequent efforts to discuss the outstanding issue ofhis life settlement business, plaintiff failed to respond.
In support of his motion, plaintiff submitted, among other documents, correspondencebetween himself and defendant. In a letter to plaintiff, dated May 29, 2008, defendant's seniorvice president (Senior VP) stated, in pertinent part:
"As we discussed, you agreed that you would resign as an agent of New York Life and thatonce your [life settlement] business was sold you would apply for reinstatement of your contract.I agreed that we would review your application for reinstatement at that time, and so long as allof your other outside business activities were acceptable to the Company, and there were nointervening compliance issues, we would reinstate your contract.
"If you are in agreement with the terms set forth in this letter, please sign below and return acopy of this letter to me."It is undisputed that plaintiff did not sign and return the letter or resign. In a June 12 letter, theSenior VP stated that he had not received a response to the May 29 letter, and that he hadunsuccessfully attempted to reach plaintiff by telephone. The Senior VP wrote that he wassuspending plaintiff, and, unless he heard from him by June 16, he would terminate his agencycontract. He also stated that the letter served as plaintiff's 30 days notice. The delivery receipt inthe record indicates, and plaintiff does not dispute, that the letter was delivered to plaintiff'shome the following day.
On June 13, plaintiff was arrested on felony criminal charges of impersonating a doctor andperforming gynecological examinations on young women.[FN2] Plaintiff responded to the Senior VP by letter dated June 16, 2008, explaining that he had been"tied up" and unable to respond sooner. Plaintiff's letter suggested that they address issues suchas whether defendant would agree to certain underwriting concessions, the need to [*3]review plaintiff's other insurance products, credit of his service timeupon reinstatement, and the sale of his life settlement business.
In a June 17, 2008 letter, before he received plaintiff's June 16 letter, the Senior VP againwrote to plaintiff to confirm that he was suspended as of June 16, and that his contract was beingterminated effective July 16, 2008. Plaintiff responded by letter on June 20, 2008, claiming thathe did not receive the June 12 letter and that their "correspondences must have crossed in themail."
In a June 26, 2008 letter, the Senior VP terminated plaintiff and advised him that theallegations of plaintiff's recent arrest "raise serious compliance issues" and preclude hisreinstatement. On July 18, defendant notified the New York Insurance Department that it hadterminated plaintiff effective July 16, 2008 because of his "participat[ion] in life settlements inviolation of Company policy" and his "arrest[ ] for impersonating a doctor."
Plaintiff alleges that after dismissal of the criminal charges a year later, his license to sellinsurance was renewed by the New York Insurance Department, and in 2010 he applied forreinstatement with defendant. Defendant denied his application on March 10, 2010, withoutproviding a reason.
The motion court denied plaintiff's summary judgment motion, granted summary judgementin favor of defendant, and dismissed the complaint pursuant to CPLR 3212 (b). The motion courtfound that plaintiff's documentary evidence demonstrated that there was no contract, oral orotherwise, between the parties regarding plaintiff's reinstatement.
For the reasons set forth below, we agree with the motion court that there was no "meeting ofthe minds" constituting the formation of a contract between the parties. It is axiomatic that aparty seeking to recover under a breach of contract theory must prove that a binding agreementwas made as to all essential terms (Paz v Singer Co., 151 AD2d 234, 235 [1989]). Courtslook to the basic elements of the offer and the acceptance to determine whether there is anobjective meeting of the minds sufficient to give rise to a binding and enforceable contract(Matter of Express Indus. & Term. Corp. v New York State Dept. of Transp., 93 NY2d584, 589 [1999]). An agreement must have sufficiently definite terms and the parties mustexpress their assent to those terms (id.).
In this case, plaintiff claims that the parties entered into an oral agreement, which was thenconfirmed in the May 29 letter from defendant. This contention is directly refuted by plaintiff'sJune 16 letter, in which he attempts to negotiate terms related to his employment andreinstatement. Plaintiff's claim that there would be no point in "moving forward" withoutresolving one of these terms indicates that it is a material term. Thus, plaintiff's owncorrespondence clearly indicates that material terms had not been agreed upon. Plaintiff's failureto show that the parties agreed to definite terms is fatal to his claim of a prior oral agreement.
Thus, as defendant asserts, the May 29 letter was merely an offer that plaintiff did not accept,and indeed rejected. " 'It is a fundamental principle of contract law that a valid acceptance mustcomply with the terms of the offer' " (Lamanna v Wing Yuen Realty, 283 AD2d 165, 166[2001], lv denied 96 NY2d 719 [2001], quoting Roer v Cross County Med. Ctr.Corp., 83 AD2d 861, 861 [1981]). Where "the offer specifies the . . . mode ofacceptance, an acceptance . . . in any other manner[ ] is wholly nugatory andineffectual" (Rochester Home Equity vGuenette, 6 AD3d 1119, 1120 [2004] [internal quotation marks and citation omitted]).Furthermore, a purported acceptance that is "qualified with conditions" is a rejection of the offer(Lamanna, 283 AD2d at 166 [internal quotation marks omitted]; see Homayouni vBanque Paribas, 241 [*4]AD2d 375, 376 [1997] ["whenevera purported acceptance is even slightly at variance with the terms of an offer, the qualifiedresponse operates as a rejection and termination of . . . the initially offered terms"]).
Defendant's May 29 letter specified the manner of acceptance by providing, "If you are inagreement with the terms set forth in this letter, please sign below and return a copy of this letterto me." Plaintiff concedes that he did not return a signed copy of the May 29 letter as required inorder to accept defendant's offer. Nor did he indicate his acceptance by complying with any of theterms set forth in the letter. Plaintiff did not resign, and his June 16 letter indicates that he hadnot closed on the sale of his life settlement business.
Not only did plaintiff fail to accept defendant's offer, his June 16 letter specifically rejectedthe May 29 offer. As discussed above, plaintiff's letter is an attempt to further negotiate the termsof his employment or reinstatement. The letter specifically conditions his agreement on theresolution of certain outstanding employment/reinstatement issues. As such, the June 16 letterwas a rejection of defendant's May 29 offer.
Even were we to deem plaintiff's June 16 letter an acceptance, plaintiff received defendant'srevocation of the May 29 offer prior to acceptance. Revocation is effective at the moment that theofferee receives it, so long as the offer has not yet been accepted (see Morton's ofChicago/Great Neck v Crab House, 297 AD2d 335, 337 [2002]; Buchbinder Tunick &Co. v Manhattan Natl. Life Ins. Co., 219 AD2d 463, 466 [1995]). Here, the June 12 letternotifying plaintiff of his impending termination, which was sent to plaintiff by overnight mailand received on June 13, constituted a revocation of the offer.
Since plaintiff's promissory estoppel claim was not pleaded as a cause of action in thecomplaint, the motion court correctly declined to address it (see Moscato v City of New York[Parks Dept.], 183 AD2d 599 [1992]). We have considered plaintiff's remaining contentionsand find them unavailing. Concur—Gonzalez, P.J., Tom, Catterson, Richter andRomÁn, JJ.
Footnote 1: A life settlement or viaticalinsurance company purchases life insurance policies from policy owners before the policiesmature. A policy typically sells at a price discounted from the face amount of the policy but inexcess of the premiums paid or cash surrender value. This allows a terminally ill or elderly policyholder access to the insurance money before his or her death. The word viatical comes fromviaticum, the Latin word meaning "provisions for a journey," and in the Catholic faith refers tothe communion given to a person near death as part of the Last Rites.
Footnote 2: The charges were dismissed thefollowing year in October 2009.