agreed to the severance package which he put forth." Zeitman Aff. P 3.
Golden swears that he made no such claim concerning his former salary. Reply Affirmation of Howard I. Golden in Support of Motion for Summary Judgment, sworn to July 30, 1992 ("Golden Reply Aff."), P 3(A). He argues that even if he had made such a misrepresentation, it would be of no importance because his salary was not the basis for his hiring. Golden further asserts that the merger clause renders the entire subject moot. This court does not agree.
As a matter of public policy, courts have a duty to pay particular attention to fee arrangements between attorneys and their clients. Jacobson, 66 N.Y.2d at 993, 489 N.E.2d at 1284, 499 N.Y.S.2d at 383 (citing Smitas v. Rickett, 102 A.D.2d 928, 929, 477 N.Y.S.2d 752, 754 (3 Dept. 1984)). Although generally, a lawyer's compensation is governed by the express terms of the contract with a client,
"few propositions are better established than that our courts do retain power of supervision" to consider, notwithstanding the agreement, a client's challenge thereto as unreasonable, unconscionable, exorbitant or for any reason that would move a court of equity to modify it or set it aside.
Williamson v. John D. Quinn Const. Corp., 537 F. Supp. 613, 617 (1982) (Weinfield, J.).
Reading the pleadings in favor of the defendants, as this court must, the issue of misrepresentation brings into question the validity of the entire contract. The merger clause offers no protection, because a contract procured by fraudulent inducement cannot be saved by its own terms. In denying the motion for summary judgment on this ground, the court does note that defendant, through Zeitman's affidavit, has offered evidence which barely reaches the Anderson standard of presenting a "scintilla of evidence."
Because the allegation of misrepresentation, although thin on the present record, nevertheless presents a material fact, the motion for summary judgment must fail on this ground.
The second ground on which the defendant seeks to challenge this motion is based on principles of accord and satisfaction. Zeitman claims that as company affairs were winding down in New York, GACC and Golden reached a new agreement and arrangement. Under this agreement, Golden continued to receive his full salary while no longer being obligated to devote his full time to the business; received a free full-time secretary to allow him to service an unrestricted clientele; gained title to furniture, fixtures, and equipment to allow him to set up a new practice; and received a monthly retainer for "greater than the value of the work to be performed, and was in lieu of the severance pay or any other obligation of GACC to Golden under the employment agreement." Zeitman Aff. P 9.
Defendant faces several problems by asserting this affirmative defense. As a preliminary matter, under New York law, the party claiming the defense must show "that there is a disputed unliquidated claim between the parties which they have mutually resolved through a new contract 'discharging all or part of their obligation under the original contract.'" Conboy, McKay, Bachman & Kendall v. Armstrong, 110 A.D.2d 1042, 1042, 488 N.Y.S.2d 901, 902 (4 Dept. 1985) (quoting Merrill Lynch Realty/Carll Burr, Inc. v. Skinner, 63 N.Y.2d 590, 596, 473 N.E.2d 229, 232, 483 N.Y.S.2d 979, 982 (1984)) (citations omitted). Plaintiff properly points out that the dispute in this case is a liquidated one: $ 100,000 in severance pay. Even if this were not a barrier to the defense, the court in Conboy held that "acceptance of a check will operate as an accord and satisfaction only when the person receiving the check has been clearly informed that acceptance of the amount offered will settle or discharge the claim." Conboy, 110 A.D.2d at 1042, 488 N.Y.S.2d at 902 (citing Merrill Lynch, 63 N.Y.2d at 596, 473 N.E.2d at 232, 483 N.Y.S.2d at 982). There is no evidence whatsoever that Golden had been clearly informed that the retainer he was receiving was intended to settle his potential claim.
Beyond these difficulties, plaintiff cannot escape the language of the original employment contract. As indicated above, the merger clause specifically states that "no modification hereof shall be valid unless in writing and signed on behalf of the Company by its President and the Executive." See supra, n. 2. Defendant offers no evidence of the existence of any writing memorializing the second agreement. Indeed, in its memorandum of law in opposition to the motion for summary judgment, defendant neither advances any legal argument concerning accord and satisfaction nor asserts any additional facts that would lead this court to believe that such a writing exists. As there is no ambiguity in the contract, as the substantive law precludes a defense of accord and satisfaction in the instant case, and as the defendant has not produced evidence of any subsequent agreement, GACC cannot meet its burden under Celotex. Accordingly, the motion for summary judgment is granted in part, thereby foreclosing the defendant from asserting the affirmative defense of accord and satisfaction.
II. RULE 11 SANCTIONS
Because of this court's disposition of the summary judgment motion, Rule 11 sanctions will not be considered at this time.
New York, New York
Date: December 9, 1992
Charles H. Tenney
U.S. District Judge