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ECKHAUS v. ALFA-LAVAL

May 13, 1991

JAY E. ECKHAUS, PLAINTIFF,
v.
ALFA-LAVAL, INC., DEFENDANT.



The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.

OPINION AND ORDER

This is a diversity action in which plaintiff, former general counsel of defendant Alfa-Laval, Inc. ("Alfa-Laval"), seeks damages for defamation. Defendant moves pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment dismissing the complaint on the grounds that further prosecution of this action would violate the New York Code of Professional Responsibility. Defendant also seeks summary judgment on its counterclaim alleging breach of contract and breach of fiduciary duty. For the reasons set forth below, defendant's motion for summary judgment dismissing the complaint is granted while defendant's motion for summary judgment on its counterclaim is denied.

BACKGROUND

Plaintiff Jay Eckhaus ("Eckhaus") served as general counsel of defendant Alfa-Laval from September 18, 1989 to June 20, 1990 when he resigned after a series of disputes with Alfa-Laval's president and chief executive officer, David Nichols ("Nichols"). Eckhaus also served as vice president and corporate secretary from December 1989 until he resigned.

Eckhaus had responsibility for a wide variety of legal matters including environmental issues, product liability disputes and corporate mergers and acquisitions. The defamation alleged in the complaint concerns a memorandum of June 11, 1990 and related discussions with Alfa-Laval executives.

Eckhaus suffered a heart attack on February 23, 1990 and did not return to work until March 19, 1990. On April 24, 1990 he was hospitalized for heart surgery and spent the next several months on paid leave recuperating. When Eckhaus returned to work on June 11, 1990, Nichols called him in to discuss his job performance.*fn1 At various points during the meeting, which Eckhaus claims lasted two hours, Eckhaus Aff. ¶ 49, the following persons were asked to join the meeting one at a time: Eileen Wenegrat, assistant corporate secretary, Barry Sullivan, vice president and treasurer, and Quintin Jackson, vice president. The parties dispute whether it was Nichols or Eckhaus who requested the other employees' presence. Eckhaus Aff. ¶ 49; Nichols Aff. ¶ 5.

A two-page performance evaluation dated June 11, 1990 (attached to the complaint) signed by Nichols and marked "confidential" covers the relevant issues discussed at the meeting. The memo reads in pertinent part:

  It now appears that on several occasions you have
  given inappropriate legal advice, exercised poor
  business judgment and failed to carry out your
  management duties in a professional manner.
  Examples of these are:

— the mishandling of the Park Ridge lease

  — poor advice given on the termination of Valarie
  Rose
  — poor review and advice (re: handling of
  personnel files — V. Rose)
  — inappropriate selection of counsel on the
  environmental matters
  — convoluted strategy on giving notice to
  insurance carriers
  — refusal to consider decentralization of
  ...

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