| PAS Tech. Servs., Inc. v Middle Vil. Healthcare Mgt., LLC |
| 2012 NY Slip Op 01226 [92 AD3d 742] |
| February 14, 2012 |
| Appellate Division, Second Department |
| PAS Technology Services, Inc., Appellant, v MiddleVillage Healthcare Management, LLC, et al., Respondents. |
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Beekman Schwartz Kaufman & Livoti, LLP, Garden City, N.Y. (Jonathan D. Beekman ofcounsel), for respondents.
In an action to recover damages for breach of contract, the plaintiff appeals from (1) an orderof the Supreme Court, Nassau County (Warshawsky, J.), dated September 17, 2010, which, aftera nonjury trial, granted the defendants' motion pursuant to CPLR 4401, made at the close of theplaintiff's case, for judgment as a matter of law dismissing the complaint, and (2) a judgment ofthe same court entered May 9, 2011, which, upon the order, is in favor of the defendants andagainst it dismissing the complaint.
Ordered that the appeal from the order is dismissed; and it is further,
Ordered that the judgment is modified, on the law, by deleting the provision thereofdismissing the first, second, and fourth causes of action, and so much of the third cause of actionas alleged breach of contract; as so modified, the judgment is affirmed, the first, second, andfourth causes of action, and so much of the third cause of action as alleged breach of contract, arereinstated and severed, the order dated September 17, 2010, is modified accordingly, and thematter is remitted to the Supreme Court, Nassau County, for a new trial on those causes ofaction; and it is further,
Ordered that one bill of costs is awarded to the plaintiff.
The appeal from the intermediate order must be dismissed because the right of direct appealtherefrom terminated with the entry of judgment in the action (see Matter of Aho, 39NY2d 241, 248 [1976]). The issues raised on the appeal from the order are brought up for reviewand have been considered on the appeal from the judgment (see CPLR 5501 [a] [1]).
The plaintiff, PAS Technology Services, Inc. (hereinafter PAS), entered into three contracts,each dated April 5, 2005, with the defendant Middle Village Healthcare Management, LLC(hereinafter MVHM). Pursuant to an asset purchase agreement, PAS agreed to sell MVHMcertain assets of a medical imaging office located in Rego Park, Queens. Pursuant to a consultingagreement, PAS agreed to provide MVHM up to 10 hours per month of consulting services with[*2]regard to the operations of the medical imaging office inexchange for annual compensation of $111,000 for the first three years and $275,000 for the lastthree years. Pursuant to a marketing agreement, PAS agreed to provide MVHM with marketingservices in exchange for compensation of $100,000 per year. The marketing agreement containeda provision for a performance incentive payment of up to $50,000 annually based on an increasein business for the Rego Park medical imaging office. The marketing agreement also containedprovisions for reimbursement of PAS's expenses and the health care premiums for Rajiv Rudra,PAS's general manager. The defendant Middle Village Diagnostic Imaging, P.C. (hereinafterMVDI), executed a guaranty, whereby it guaranteed MVHM's obligations under the consultingand marketing agreements.
MVHM allegedly made only partial payment under the asset purchase agreement. MVHMalso allegedly failed to make payments pursuant to the asset purchase agreement on itsassumption of a lease for a DEXA scanner, which measures calcium content in bones. On July24, 2006, MVHM terminated the marketing agreement due to PAS's alleged violation of thatagreement's restrictive covenant. MVHM allegedly stopped making regular payments under theconsulting agreement, and as of early 2008, completely ceased making payments under themarketing agreement.
PAS commenced this action alleging that the defendants breached the agreements.Thereafter, by order dated July 8, 2010, the Supreme Court, inter alia, granted that branch ofPAS's motion which was for summary judgment dismissing the defendants' counterclaims to theextent that they asserted that PAS violated the restrictive covenants in the asset purchase,consulting, and marketing agreements. At the close of PAS's case at a nonjury trial, thedefendants moved pursuant to CPLR 4401 for judgment as a matter of law dismissing thecomplaint on the ground that PAS failed to prove all of the elements of its breach of contractcauses of action. By order dated September 17, 2010, the Supreme Court granted the motion and,upon the order, a judgment was entered dismissing the complaint. PAS appeals.
"A motion for judgment as a matter of law pursuant to CPLR 4401 may be granted where thetrial court determines that, upon the evidence presented, there is no rational process by which the[trier of fact] could base a finding in favor of the nonmoving party" (C.K. Rehner, Inc. vArnell Constr. Corp., 303 AD2d 439, 440 [2003]; see Robinson v 211-11 N., LLC, 46 AD3d 657, 658 [2007]). Inconsidering such a motion, " 'the trial court must afford the party opposing the motion everyinference which may properly be drawn from the facts presented, and the facts must beconsidered in a light most favorable to the nonmovant' " (Robinson v 211-11 N., LLC, 46AD3d at 658, quoting Szczerbiak v Pilat, 90 NY2d 553, 556 [1997]).
Giving PAS the benefit of every reasonable inference to be drawn from the evidencepresented, there was a rational basis upon which the Supreme Court could have concluded thatPAS performed under the consulting and marketing agreements prior to MVHM's breach of theseagreements (see Campbell v Silver Huntington Enters., 288 AD2d 416 [2001]).Moreover, on the evidence that PAS presented, the Supreme Court could have rationallyconcluded that MVHM breached the relevant agreements. PAS presented evidence that MVHMbreached the asset purchase agreement when it paid only $112,000 of the $142,000 duethereunder and failed to make the monthly payments of $975 under the lease for the DEXAscanner. PAS also provided evidence that MVHM breached the marketing and consultingagreements when it ceased making required payments thereunder (see Paterno & Sons vTown of New Windsor, 43 AD2d 863, 864 [1974]), as well as when it terminated themarketing agreement because of PAS's alleged violation of that agreement's restrictive covenant.
Contrary to the defendants' contention, PAS provided evidence of the specific damages itsustained. PAS provided evidence that it was not paid $30,000 due under the asset purchaseagreement, and was not paid regularly under the lease for the DEXA scanner. As to theconsulting and marketing agreements, PAS provided evidence that MVHM stopped making therequired periodic payments under these agreements. PAS had difficulty demonstrating whatMVHM had and had not paid under the three agreements, as many of these payments allegedlywere grouped together. Nevertheless, the specific damages allegedly owed to PAS can beascertained by the Supreme Court by subtracting the sum total paid to the plaintiff from the sumtotal the defendants owed under these agreements.[*3]
However, the Supreme Court properly dismissed so muchof the third cause of action as sought damages for expenses and health care premiums, as PASfailed to establish, prima facie, its entitlement to those damages. Therefore, the Supreme Courtshould not include expenses or health care premiums when computing any amount owed byMVHM.
Regarding the performance incentive provision contained in the marketing agreement,generally, there is no enforceable right to compensation under a discretionary compensation orbonus plan (see Namad v Salomon Inc., 74 NY2d 751, 753 [1989]). Here, however, PASsubmitted sufficient evidence showing that the defendants breached this provision when theyfailed to meet with one of PAS's representatives before April 15, 2005, and establish a formulafor the incentive payment. Since compliance with this provision was not discretionary, theSupreme Court could rationally conclude that PAS was entitled to the performance incentive forthe duration of the marketing agreement. Dillon, J.P., Eng, Austin and Miller, JJ., concur.