such language is absent. Here, although Travelstead had the discretion to determine the amount of the bonus, a bonus was part of his employment contract with Canet. Canet was entitled to receive payment of his bonus once Travelstead had determined the amount.
Another case cited by defendant for the proposition that a promised bonus may not be enforced may also be readily distinguished. In Schmidt v. Maiorino, 209 A.D.2d 683, 619 N.Y.S.2d 139, 140 (2d Dep't 1994), the court dismissed plaintiff's cause of action to enforce oral promises granting her entitlement to future percentage bonuses based on a substantially different employment situation from Canet's. There, the bonus promise was made fourteen years after plaintiff began working for the defendant, and, thus, it was not a condition of the original employment contract. Furthermore, in Schmidt, plaintiff and defendant were engaged in a meretricious relationship throughout plaintiff's employment.
The conclusion that Travelstead felt himself obligated to pay a bonus once he had specified its amount finds further support in his payment of interest on Canet's 1985 bonus when he failed to pay it until 1987. If a bonus was truly not due until it was paid, as Travelstead asserts, Def. Post Trial Brf. at 5, there would have been no reason for him to pay Canet interest when he delayed payment. Def. Ex. 41A.
C. Enforcement of Equity Participation
As noted, supra pp. 10-18, the court finds that Canet received a net profit participation from Travelstead in Travelstead's interests in 383 Madison, 712 Fifth Avenue, Tower 49, and Canary Wharf in the percentages claimed by Canet. Canet's contribution to these projects was his dedicated service, in effect, "sweat equity." Canet stated that the interest granted by Travelstead in 712 Fifth Avenue was granted in the same terms as the other interests. Id. at 301. Travelstead represented that the interest he granted Canet in 712 Fifth Avenue was "ten percent of the net profits that I got out of the project, if any." Travelstead at 354. It should be noted that this is, by Travelstead's own definition, one form of equity participation and was the form he in fact fulfilled at least partially with respect to 712 Fifth Avenue and Canary Wharf. Travelstead at 337. It may then be appropriate to infer that the other interests granted by Travelstead were effectively net profit interests in Travelstead's interest in the referenced project and that this form represented his intent in making the offer.
The participation Travelstead granted to the four Canary Wharf staff members, leaving aside the question of whether it completely fulfilled Travelstead's commitment to Canet, was also of this nature. Travelstead, himself, described the interest he gave these staff members as "a net profit interest." Travelstead at 362. In these projects that preceded Barcelona, Canet's interests were relatively small - a pro rata share seemingly based on Travelstead's evaluation of Canet's personal contribution as against his own personal and capital investment. Although the nature of the Barcelona project also fits within the law of joint ventures, see infra, pp. 46-49, it might, in the alternative, also be considered as a "net profit interest."
By including such interests as part of his offer of employment to Canet, Travelstead may have expected to obtain a higher level of dedication, based on Canet's sense that he had ownership of the projects on which he worked. Uncontradicted testimony indicated that Canet did provide just such dedication. In addition, Canet had a voice in the management of the enterprise. There was extensive testimony that Travelstead announced to Canet and to other business associates that Canet was "his partner." Another way of phrasing this is to say that Canet was a general partner of Travelstead in a general partnership whose principal asset was an interest in Travelstead's limited partnerships.
The understanding with respect to all the projects prior to the Barcelona project was that Canet stood to gain if the project succeeded in relation to his relatively small percentage interest gained as sweat equity.
Similarly, he stood to lose his sweat equity if the project went under. He would not however, and did not expect to, lose anything more than his "capital contribution" in the form of "sweat equity." With respect to Barcelona, where he had a much larger share in recognition of his role as director of the project, his share, again would exceed his anticipated capital contribution. Still, it is clear he expected to make a contribution to capital. Canet at 244-47.
One view of these equity interests created by Travelstead's offers is that they were "net profit payout" interests, Travelstead at 338, representing another form of incentive compensation that, like the bonus, was included as an integral term of the employment contract. See, Smith v. Horsehead Industries, Inc., 1995 U.S. Dist. LEXIS 9549, 1995 WL 406024, *5 (S.D.N.Y. July 10, 1995), Mann v. Helmsley-Spear, Inc., 177 A.D.2d 147, 581 N.Y.S.2d 16 (1st Dept 1992), Raes v. So-Lite Furniture Corp., 4 A.D.2d 851, 166 N.Y.S.2d 471 (4th Dep't 1957). A "net profit payout" interest is somewhat akin to commission sales percentage, whose enforceability was codified in the Labor Law § 191(1).
Travelstead also argues that Canet's equity participation claims are barred by the Statute of Frauds.
This is misplaced for several reasons. New York General Obligations Law § 5-701(a) provides, in pertinent part:
Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be changed therewith, or by his lawful agent, if such agreement, promise or undertaking: