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United States District Court, S.D. New York

April 7, 2004.


The opinion of the court was delivered by: CONSTANCE MOTLEY, Senior District Judge


This is a breach of contract action in which the plaintiff, Deutsche Asset Management, avers that defendant John Callaghan owes plaintiff monies mistakenly paid to him in excess of his salary during his tenure as plaintiffs employee. Defendant counterclaims on the grounds that plaintiff actually underpaid him and breached his employment contract. At issue before the court are plaintiffs motion for summary judgment on defendant's counterclaims for severance compensation, liquidated damages, fraud, unjust enrichment and defamation, and defendant's motion for summary judgment on breach of contract, severance compensation, and liquidated pages: For the reasons stated below, plaintiffs motion for summary judgment is hereby GUARANTED and defendant's motion for summary judgment is


 I. Factual Background

  A. Plaintiff and defendant's 1997 and March 1999 employment contracts

  Morgan Grenfell Capital Management (hereinafter "MGCM"), a subsidiary of plaintiff Deutsche Asset Management, Inc. (hereinafter "plaintiff or "DAM"), hired John P. Callaghan (hereinafter "defendant" or "Callaghan") in 1997 to co-manage small cap investment portfolios.*fn1 Callaghan became a member of the Small Cap Team, consisting of Callaghan, Audrey Jones and Dave Baratta. Pursuant to his employment agreement, the Team would receive 50% of the gross revenues "received by MGCM from the management of portfolios for which the Small Cap Team was primarily responsible." In any event, the contract guaranteed that Callaghan's total compensation would not be less than $470,000 for 1997 or less than $800,000 for 1998.

  In March of 1999, Callaghan signed a new contract with MGCM that adopted by incorporation the 50% compensation scheme from the 1997 agreement.*fn2

  B. Discussions as to whether Callaghan and the Team would manage Bankers Trust portfolios

  In June of 1999, plaintiff merged with Bankers Trust, raising the question of who would manage the Bankers Trust portfolios. Prior to the merger, the Small Cap Team had a meeting with Rich Marin, the head of the merger, and Paul Higgins, Marin's "right-hand man." Callaghan Dep. at 104. At the meeting, the Team expressed interest in managing the Bankers Trust portfolios. Id. at 104-105. Callaghan recalls Baratta telling Marin that the Team's interest in taking over the portfolios was "based on the understanding that we have a contract that calls for us to share in the revenues," and, while Callaghan does not remember the precise nature of his words, that Marin responded by stating something to the effect that the Team would be paid based on the contract or the agreement. Id. Callaghan also testified on his deposition that Marin never stated that the Team would earn 50% of the gross revenues received from the Bankers Trust assets during the meeting. Thereafter, Higgins told the Team members that they should renegotiate their contract if they were to manage the Bankers Trust portfolios. Id at 105-06. Callaghan understood Higgins to mean that "he would like to renegotiate the contract at a lower percentage than the 50 percent we had in our agreement." Id. at 106-108.

  DAM representatives aver that it was their understanding as well as the Team's that if the Small Cap Team were to take over the Banker's Trust portfolios, the 50% compensation scheme spelled out in the 1999 contract would not apply to revenues generated by the Banker's Trust assets. Weinreich Dep. at 80-81; Grohowski Dep. at 88; Kausch Dep. at 145-46; Weinrich Decl. ¶ 7. Josh Weinreich was the Co-Head of the Private Bank of Bankers Trust immediately before the merger. After the merger, he became Co-Head of the Americas for Deutsche Asset. Weinrich swears that while he and the Small Cap Team discussed the possibility of the Team managing the Bankers Trust's small cap assets, he told them that "under no circumstances" would the Team be compensated pursuant to the 50% compensation scheme that applied to the MGCM small cap portfolios and that he would not transfer the Bankers' assets to the Team's management if the 50% scheme applied. See Weinreich Decl. at 3.

  C. Discussions regarding Team compensation in the face of Baratta's departure and the Team's management of the Bankers Trust portfolios

  When the merger occurred thereafter in early June, the Team took over management of Bankers Trust small cap assets. Callaghan Dep. at 118. According to Callaghan, the parties had not reached an agreement as to what compensation the Team would receive for doing so. Id. According to Jeanne Kausch, DAM's head of Human Resources, Leo Grohowski, Callaghan's direct supervisor and Regional Chief Investment Officer, and Weinreich, DAM did not understand the 50% scheme to apply to the Bankers Trust Assets. Callaghan Dep. at 86, Grohowski Dep. at 12, 88; Barr Dep. at 13, Kausch Dep. at 145-46, 172-73, 196-99; Weinreich Dep. at 81-82; Weinreich Decl. 5-7.

  At approximately the same time as the merger in early June 1999, Baratta resigned his position with DAM, thereby raising the question of Jones' and Callaghan's compensation as the two remaining members of the Small Cap Team. Pursuant to the terms of Callaghan's 1999 employment contract (incorporating, by reference, the relevant provisions of the 1997 contract), with the departure of any Team member from the Team, "in the event the Co-Managers of the team and MGCM cannot reach agreement on the allocation of the aggregate compensation, the allocation shall be determined by the Chairman of the Board of MGCM, whose determination will be final." Callaghan Dep., Exhibit 7. Kausch testified that there was "a debate about what to do when Baratta left" and there were "differences of opinion as to what was called for." Kausch Dep. at 102. Specifically, "[a]t the time David Baratta resigned in approximately June of 1999, there was an issue as to whether the 1999 agreement between MGCM and the Small Cap Team (defined as Baratta, Callaghan and Audrey Jones) required that the remaining members of the Small Cap Team would split the share left on the table by the departing number, or rather contemplated that the remaining share could be held in reserve in the event a new member of the team had to be hired." Kausch Decl. ¶ 6 (February 25, 2003). On June 15, 1999 Jeanne Kausch sent Jones and Callaghan a letter via email. The email reads: "Attached is a draft for your review . . . After verbal agreement from you both that this is agreed, I will produce a hard copy memo to each of you for your files." Callaghan Dep., Exhibit 9. The letter, which is marked "draft", begins: `This letter outlines the compensation agreement between you and Deutsche Asset Management and replaces all prior compensation agreements between you and Morgan Grenfell except noted herein." Id The letter provides that with the departure of Baratta from the Team, Jones and Callaghan would each receive 16.5% of total revenues from current Morgan Grenfell assets [i.e., a larger share than they received before Baratta resigned his position] but that "assets from the Bankers Trust Small Cap portfolio will not be combined with those currently under your management for purposes of evaluating the investment performance under the terms of the March 9 letter." Id. The letter also increased Jones and Callaghan's minimum compensation for 1999 to $750,000. In contrast to 1999, for the years 2000 and beyond, "revenues from Bankers Trust's Small cap portfolio will be included in the calculation."

  A second letter dated June 30, 1999, with a pen-line edit date of July 6, 1999, is substantially the same as the June 15th letter except it is not marked "draft", is signed by Weinreich and Kausch, and is increasingly specific as to compensation for 2000 and beyond and other terms of employment. Like the earlier June 15th letter, it provides that the 50% compensation scheme will not apply to revenues generated from Banker's Trust portfolios in 1999.

  On September 30, 1999, Jones and Callaghan sent an email entitled "employment agreement" seemingly in reply to the June 30th letter. Callaghan Dep., Exhibit. 10. Callaghan's email reads: "I have attached a list of Audrey's and my comments about the employment agreement. We are sorry about the delay . . . Please let us know when we can set up a meeting to discuss this." Id The first paragraph of the attached letter states: "This is a summary of the last remaining issues we have with our employment agreement. The first part of the summary attempts to state more precisely what we believe to be our mutual understanding of the agreement reached." Id. The attached notes are relatively exhaustive, covering a range of subjects including offering additional terms. However, Callaghan and Jones do not address the exclusion of Bankers Trust profits from their 1999 compensation package anywhere in their letter. See Id. It is the last document in which compensation for 1999 is mentioned.

  D. Payment of 1999 bonus compensation

  In October of 1999, DAM paid Callaghan his third quarter bonus, pursuant to which Callaghan received his share of 50% of the revenues generated for managing the MGCM assets, but not for managing the Banker's Trust assets. Callaghan Dep. at 298-99. The payment would have been several hundred thousand dollars higher had 50% of Bankers Trust revenues been included. Kausch Decl., ¶ 7.

  In early 2000, DAM paid Callaghan his fourth quarter 1999 bonus in the amount of $780,000. DAM claims that by mistake, it overpaid Callaghan by $482,739 because it did not calculate the amounts he had already received throughout 1999. Callaghan did not address the overpayment with DAM at that time. Id. at 299-300.

  E. The 2000 employment contract

  On February 23, 2000, Callaghan received a letter signed by Kausch and Barr stating "this letter describes the compensation agreement between you and DAM for your services in 2000 and 200L" Callaghan Dep., Ex. 4. Under the agreement, for the years 2000 and 2001, Callaghan would earn 8.3% of the gross revenues received from portfolios managed by the Team, with an annual base salary of $355,000 and a guaranteed minimum salary of $950,000. The contract guaranteed his compensation as long as Callaghan did not resign for other than "Good Reason." "Good reason" is defined as "(i) any default by Deutsche Asset Management in its obligation to you with respect to payment of compensation and provision of benefits when, as and if due, occurring 10 business days after notice to Deutsche Asset Management by you that such payment or benefit was not made when due, (ii) the failure or refusal to appoint you to a job having the same or equivalent official title as Managing Director or having the level of responsibility or authority you currently exercise." Id. If Callaghan resigned for "Good Reason", DAM agreed to pay him a pro-rata share of his guaranteed compensation plus a severance payment equal to salary and bonus. Pursuant to the letter, Callaghan's title was "Principal Portfolio Manager of Small Cap Equity Investments." Callaghan Dep., Exhibit 4.

  F. Plaintiffs request for reimbursement of the alleged overpayment and Callaghan's resignation

  In August of 2000, DAM realized it had overpaid Callaghan for his fourth-quarter 1999 bonus. Kausch Decl, ¶ 10. After a meeting on August 4th in which DAM representatives communicated the error and asked Callaghan to repay the $480,000 it had mistakenly transferred to him, Callaghan charged that not only did he not owe DAM for this payment, but that DAM owed him for his share of 50% of the revenues generates from the Bankers Trust assets in 1999, totaling $550,000.

  In February of 2001, without having resolved whether Callaghan owed DAM or whether DAM owed Callaghan for 1999 compensation, Callaghan resigned his employment with plaintiff.

  Callaghan justified his resignation on two grounds. First, he maintains that DAM breached his employment agreement by refusing to pay him his share of 50% of the revenues generated from the Bankers Trust assets in 1999. Callaghan believed that the 50% bonus compensation formula spelled out in his 1999 contract applied to revenues from those assets because a) around the time that the parties were discussing how the Team should be compensated for managing the Bankers Trust assets, Dean Barr, DAM's Chief Investment Officer, said he was dropping renegotiation of the 1999 contract and b) although written correspondence previously circulated in 1999 provided that the Bankers Trust assets were excluded from the 50% compensation scheme, the subsequent employment agreement dated February of 2000 did not address 1999 compensation, leading him to conclude that the renegotiation had in fact been dropped. Callaghan Dep. at 230. Callaghan alleges that he did not complain about the $550,000 underpayment in his third and fourth quarter 1999 bonuses because the amount received was a "plausible number" for the amounts owed to him and he did not have an accounting of revenues generated from the Bankers Trust portfolios. Callaghan Dep., at 42.*fn3 Alternatively, Callaghan suggests that he did not complain about alleged underpayment because, at the time, the parties were in the middle of contract negotiations. Callaghan Dep. at 299-300. "One of the demands that was being made at the time was to exclude those assets [the Banker's Trust assets] from the calculation; to have protested at that point, I was afraid to raise the issue and "squash the negotiations" Id.

  Second, Callaghan justifies his resignation on the grounds that although his 2000 contract provides that "bonuses for other members of the Small Cap Team will be determined by the Team principals," in late 2000/early 2001, when they were deciding employee compensation, DAM excluded him from the second and third round of negotiations, communicated with Jones to the exclusion of Callaghan, and did not follow his recommendations for at least one employee. Audrey Jones, however, testified that DAM did not bypass Callaghan during the 2000/2001 compensation decision process. Jones Dep. at 118. Human Resources Director Jeanne Kausch testified that the decision-making process did not differ from the way it had functioned in 1999. Kausch Decl. ¶ 14-18 (February 11, 2003). Callaghan admits that Jones was included in the decision-making process and that he was consulted at the initial stages. Callaghan Dep. at 27.

 II. Procedural History & The Motions Before the Court

  Plaintiff filed suit in May of 2001 alleging that due to an administrative error, DAM overpaid defendant Callaghan $482,739 when it paid him his fourth quarter incentive compensation for 1999. DAM seeks repayment of this sum and claims breach of contract for defendant's failure to remit the overpayment and unjust enrichment. See Pl.'s Complaint, May 15, 2001.

  In his Answer, defendant denies DAM's claims and affirmatively alleges that DAM underpaid him by $550,000 for 1999. Defendant counterclaims for two counts of breach of contract, the first on the grounds that DAM did not pay him the full compensation owed in 1999, and the second on the grounds that DAM refuses to pay him severance owed to him under the 2000 contract. See Def.'s Answer with Counterclaims (June 19, 2001). His counterclaims further include defamation, violation of New York State and federal labor laws, and fraud.*fn4

  Presently before the court are both parties' motions for summary judgment. Plaintiff DAM seeks summary judgment in its favor on Callaghan's counterclaims for severance compensation, attorneys fees and liquidated damages, fraud, unjust enrichment, and defamation. Defendant Callaghan moves for summary judgment on his counterclaims that 1) DAM breached the 1999 employment contract by failing to pay him his share of 50% of the revenues generated from the Bankers Trust assets in 1999, 2) DAM owes him severance payments because he resigned for "good reason" under the contract, and 3) he is entitled to liquidated damages under New York Labor Law.


  According to Fed.R.Civ.P. 56(c), summary judgment "shall be rendered forthwith" if it is shown that "there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 323 n. 4,106 S.Ct. 2548, 2552 n. 4 (1986). "[G]enuineness runs to whether disputed factual issues can reasonably be resolved in favor of either party, [while] materiality runs to whether the dispute matters, i.e., whether it concerns facts that can affect the outcome under the applicable substantive law." Mitchell v. Washingtonville Cent. Sch. Dist. 190 F.3d 1, 5 (2d Cir. 1999) (internal quotations and citations omitted). In order to prove that a genuine issue of material fact exists, a plaintiff "may not rest upon the mere allegations or denials of the pleading[s]," but must by affidavit or otherwise "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). "Conclusory statements, conjecture or speculation by the party resisting the motion will not defeat summary judgment." Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996).

  Courts must resolve all ambiguities and draw all reasonable factual inferences in favor of the non-moving party. See Nora Beverages. Inc. v. Perrier Group of Am., Inc. 164 F.3d 736, 742 (2d Cir. 1998). The moving party bears the initial burden of demonstrating an absence of genuine issues of material fact. See Schwapp v. Town of Avon. 118 F.3d 106, 110 (2d Cir. 1997). If the initial burden is met, the non-moving party "must produce specific facts indicating that a genuine issue of fact exists. If the evidence [presented by the non-moving party] is merely colorable, or is not significantly probative, summary judgment may be granted." Scotto Almenas 143 F.3d 105, 114 (2d Cir. 1998) (internal quotations and citations omitted) (alteration in original). ANALYSIS

 I. Defendant Callaghan's Counterclaim for Severance Compensation under his Employment Contract

  Defendant Callaghan counterclaims for $950,000 in severance compensation which he claims is owed to him under the 2000 employment contract. Plaintiff moves the court to render judgment in its favor on defendant's severance counterclaim, while defendant Callaghan moves the court to award him severance as a matter of law.

  A. In order to be entitled to severance, Callaghan had to have "good reason" to terminate his employment

  Defendant bases his claim for severance on his 2000 employment contract. The letter forming that contract reads, in relevant part:

"If you . . . resign for Good Reason during 2001, you will be paid the pro-rata portion of your 2001 guaranteed compensation plus a severance payment equal to your salary and bonus paid for services in 2000. The payment will be no less than $950,000."
Callaghan Dep., Exhibit 4.

  Appendix A defines "Good Reason":

"Deutsche Asset Management shall be deemed to have given you "Good Reason" to terminate your employment in case of any act or omission by Deutsche Asset Management which constitutes a material breach of this letter including (i) any default by Deutsche Asset Management in its obligation to you with respect to the payment of compensation and provision of benefits when, as and if due, occurring 10 business days after the written notice to Deutsche Asset Management by you that such payment or benefit was not made when due, ii) the failure or refusal to appoint you to a job having the same or equivalent official title as Managing Director or having the level of responsibility and authority you currently exercise."

  B, Failure to pay full amount of 1999 bonus

  First, relying on subsection (i) defining "Good Reason" as failure to pay compensation, Callaghan argues that he had "Good Reason" to terminate his employment because DAM did not compensate him for revenues plaintiff received from the Bankers Trust assets in 1999.

  "Summary judgment is only proper in contract disputes if the language of the contract is wholly unambiguous." Lucente v. International Business Machines Corp. 310 F.3d 243, 257 (2d Cir. 2002) citing Mellon Bank v. United Bank Corp., 31 F.3d 113, 115 (2d Cir. 1994) (internal quotations omitted); American Express Bank Ltd, v. Uniroyal, Inc. 164 A.D.2d 275, 277, 562 N.Y.S.2d 613, 614 (if the parties' intent is unambiguously conveyed in the plain meaning of the agreements, then interpretation is a matter of law that may be resolved by summary judgment or dismissal), appeal denied 77 N.Y.2d 807, 569 N.Y.S.2d 611, 572 N.E.2d 52 (1991). Whether the language of a contract is ambiguous is a question of law for the court to decide. Id., citing Mellon Bank, 31 F.3d at 115. A contract's language is ambiguous if it is subject to more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement Id., citing Savers v. Rochester Tel. Corp. Supplemental Mgmt. Pension Plan, 7 F.3d 1091, 1095 (2d Cir. 1993) (internal quotations omitted). However, contract language is unambiguous when it has a definite and precise meaning, without the possibility of misconception, and where there is no reasonable basis for difference of opinion. Id., citing Savers, 7 F.3d at 1095. (internal quotations omitted). If a court finds that a contract is unambiguous, then it must enforce the intent of the parties, judged by the plain meaning of the language employed. Paine Webber Inc. v. Bybyk 81 F.3d 1193, 1199 (2d Cir. 1996); Wallace v. 600 Partners Co. 86 N.Y.2d 543, 634 N.Y.S.2d 669, 658 N.E.2d 715 (1995).

  Here, the first line of defendant's 2000 employment contract governing his severance claim states: "This letter describes the compensation agreement between you and DAM . . . for your services in 2000 and 2001" Callaghan Dep., Exhibit 4 (emphasis added). The letter further provides that Callaghan would have "Good Reason" to terminate his employment in the event of "material breach" of the letter governing compensation for those services (i.e., "services in 2000 and 2001). Id, Callaghan admits that plaintiff paid him for his services in 2000 and 2001. Callaghan Dep. at 21-22. Even assuming, arguendo, that DAM owes Callaghan additional bonus compensation for 1999, defendant's 1999 bonus compensation is outside the reach of the contract because the contract, by its clear terms, applies only to compensation for his "services in 2000 and 2001." As a matter of law, the contract is unambiguous and the court is bound to enforce the parties' intent according to its plain meaning. As such, as a matter of law, defendant is not entitled to severance pay by virtue of plaintiffs alleged failure to pay him his 1999 bonus.

  B. Reduction in employment responsibilities

  Relying on subsection (ii) defining "Good Reason" to include diminishment of employment responsibilities, Callaghan claims he is entitled to severance because plaintiff decreased his employment responsibilities in late 2000 and early 2001.*fn5 According to the 2000 employment contract, "[b]onuses for other members of the Small Cap Team will be determined by Team Principals and subject to review and approval by the Chief Investment Officer." Callaghan Dep., Exhibit 4. Callaghan counterclaims for severance on the grounds that in violation of this contractual guarantee, "[p]laintiff reduced Defendant's position and authority by excluding Defendant from the 2001 compensation review process for employees of the Small Cap Team reporting directly to Defendant." See Def's Answer with Counterclaims, ¶ 73 (June 19, 2001).


"Specifically, decisions concerning compensation for Small Cap Team staff members were made in three rounds. With respect to the decision making process in late 2000 and early 2001 (i.e., after Callaghan demanded that DAM pay him the 1999 incentive compensation still owed to him), whether Callaghan's recommendations before the first round were communicated to Kausch is not revealed by the record. However, Callaghan was expressly denied any input during the second and third rounds, which included communications between Kausch, Jones, and the Team staff members."
Statement of Def. Callaghan in Opp. to Pl's Statement of Undisputed Material Facts, ¶ 21, (February 25, 2003).

  First, defendant's conclusory allegations fall far short of the specific facts necessary to sustain his burden on summary judgment. See Kulak 88 F.3d at 71; Fed.R.Civ.P. 56(e). To rebut plaintiffs motion for summary judgment on this claim, he simply states that he was "removed from a critical part of the compensation-setting process for all the members of the Small Cap Team," including "not following his recommendation for at least one team member." See Def's Reply Memorandum to Pl's Partial Motion for Summary Judgement, at 8 (Feb. 25, 2003). Callaghan does not provide specific evidence explaining how he was excluded from the process other than a blanket allegation that his recommendations were not followed. As such, Callaghan has not met his burden in showing that a genuine issue of fact exists precluding summary judgment.

  Second, even if the court accepts the conclusory allegations as true, the contract unambiguously provides that the Chief Investment Officer must review and approve the Team Principals' bonus determinations, meaning that the Officer is the ultimate decision-maker regarding bonus compensation, not Callaghan. Thus, the fact that Callaghan's recommendations were not necessarily determinative does not establish a reduction in Callaghan's employment responsibilities under the contract. Further, the contract provides that Callaghan would have "Good Reason" to terminate his employment in the face of a "material breach" of the contract. At the very least, in light of the Chief Financial Officer's role as the ultimate decision-maker, coupled with the fact that Callaghan's central employment responsibility was to manage small-cap equity investments, the fact that Callaghan's recommendations were not necessarily followed as to employment compensation does not constitute "material breach" of his contractually-guaranteed employment responsibilities.

  Third, plaintiff has shown that any facts Callaghan raises to rebut plaintiffs motion for summary judgment are merely colorable and not sufficiently probative to defeat plaintiffs motion. See Scotto Almenas 143 F.3d at 114. "Good Reason" to terminate exists under the contract only if DAM failed or refused to give Callaghan "a job having the same or equivalent official title as Managing Director or having the level of responsibility and authority [he] currently exercise[s]," but Callaghan admits that DAM appointed Callaghan to the same position, Managing Director responsible for small cap assets, with the same pay, and with the same assets under his control. See Callaghan Dep. at 18-19, 25, 425. The evidence shows that his recommendations regarding bonuses were sought and communicated to Jeanne Kausch in Human Resources. Callaghan Dep. at 27; Jones Dep. at 1 18. Although Callaghan argues that the fact that the compensation form lists Jones as the signatory representative from Callaghan's group shows that he was somehow excluded from the process, plaintiff points out that the form only had one space for a manager from each group, the form had never been used before 2000, and Jones generally took the lead in administrative managers for the Small Cap Team. Callaghan Dep. at 34; Kausch Decl. 14-18 (Feb. 11, 2003).

  Defendant's motion for summary judgment compelling plaintiff to pay him severance pursuant to his 2000 employment contract is DENIED. Plaintiffs motion for summary judgment on defendant's counterclaim for severance is GRANTED.

 II. Defendant's Counterclaim for Attorney's Fees and Liquidated Damages

  Both plaintiff and defendant move for summary judgment on defendant's counterclaim for attorney's fees and liquidated damages under New York Labor Law.

  New York Labor Law § 198 provides, in pertinent part: "In any action instituted upon a wage claim by an employee . . . in which the employee prevails, the court shall allow such employee reasonable attorney's fees and, upon a finding that the employer's failure to pay the wage required by this article was willful, an additional amount as liquidated damages equal to twenty-five percent of the total amount of the wages found to be due." N.Y. Lab. Law § 198 (1-a) (McKinney2002).

  In order to receive attorney's fees or liquidated damages under § 198, a party must first establish a violation of a substantive provision of article 6 of New York Labor Law. Miller v. Hekimian Laboratories. Inc., 257 F. Supp.2d 506, 519 (N.D.N.Y. 2003) citing Gottlieb v. Kenneth D. Laub & Co., Inc. 82 N.Y.2d 457, 464, 605 N.Y.S.2d 213, 626 N.E.2d 29 (1993) ("the statutory remedy of an award of attorneys fees . . . as well as the liquidated damages remedy where a willful failure to pay wages has been established, are limited to actions for wage claims founded on the substantive provisions of Labor Law article 6"). Reliance on § 190 alone is insufficient because it "is a definitional section and does not provide a basis for a substantive cause of action." Id. at 518.

  Defendant Callaghan's counterclaim for attorney's fees and liquidated damages under New York Labor Laws does not allege a violation of any of the substantive provisions of the Labor Laws. See Def.'s Answer with Counterclaims, ¶¶ 126-130. Absent the requisite substantive claim under the New York Labor Laws, defendant cannot maintain a claim for attorneys fees or liquidated damages as a matter of law. See Gottlieb supra.

  Defendant's motion for summary judgment on his claim for attorneys fees and damages under New York Labor Law is DENIED. Plaintiffs motion for summary judgment on the same claim is GRANTED. III. Defendant's Counterclaim for Fraud

  Plaintiff moves for summary judgment on defendant's counterclaim for fraud.

  According to Callaghan, in October of 1999, when the parties were discussing the 1999 contract and compensation owed to the Team for its management of the Bankers Trust assets, Dean Barr, plaintiffs Chief Investment Officer, told him "that negotiations had bogged down, that he wanted to jump start negotiations and he wanted to drop renegotiation of the 1999 contract." Callaghan Dep. at 228. From this statement, Callaghan concluded that the 50% compensation scheme set forth in the March 1999 contract would apply to revenues earned from the Team's management of the Bankers Trust assets. Accordingly, the substance of his counterclaim for fraud is that Barr represented that DAM "would abide by the terms of the 1999 Contract, as originally written" but that DAM "never intended to compensate Defendant for managing the [Bankers Trust] Assets." See Def s Answer with Counterclaims, ¶¶ 132-134. "Plaintiffs statement that it would abandon its efforts to modify the 1999 Contract was a material misrepresentation and, indeed critical, element of Defendant's decision to execute the 2000 contract." Id at ¶ 135.

  As a preliminary matter, DAM moves for summary judgment on the grounds that because the only fraud Callaghan alleges arises out of the same facts that serve as the basis for his breach of contract claim, Callaghan has failed to state a claim for fraud on which relief can be granted. Telecom Intern. America, Ltd, v. AT&T Corp. 280 F.3d 175, 196 (2d Cir. 2001); Papa's-June Music. Inc. v. McLean, 921 F. Supp. 1154, 1162 (S.D.N.Y. 1996) (dismissal of fraud claim on the grounds that the "complaint does not allege a fraud claim that is sufficiently distinct from the breach of contract claim" but "merely appends allegations about [defendant's] state of mind for breach of contract), citing Locascio v. Janes Aquavella, M.D., P.C. 185 A.D.2d 689, 586 N.Y.S.2d 78 (1992). Specifically, "(a)s a general rule, `no cause of action for fraud is stated or exists where the only fraud charged relates to a breach of the employment contract.'" Alter v. Bogoricin 1997 WL 691332, at 9 (S.D.N.Y. Nov. 6, 1997). citing Dalton v. Union Bank of Switzerland 134 A.D.2d 174, 176, 520 N.Y.S.2d 764, 766 (1987).

  However, the ban on fraud claims that arise out of the same facts as a breach of contract claim applies only in the context where the plaintiff alleges that the defendant entered into a contract with no intention of performance. Grappo v. Alitalia Linee Aeree Italiane. S.p.A. 56 F.3d 427, 434 (2d Cir. 1995); Rocanova v. Equitable Live Assurance Society of the United States 83 N.Y.2d 603, 614, 612 N.Y.S.2d 211, 211 (1997). The rationale behind disallowing contract actions in those situations is that "a party need not be expressing an unconditional intention to perform by contracting, and may instead be expressing an intention either to perform or suffer the ordinary contractual consequences for a breach." Vtech Holdings Ltd, v. Lucent Technologies, Inc. 172 F. Supp.2d 435, 439 (S.D.N.Y. 2001) citing Briefstein v. P.J. Rotondo Constr. 8 A.D.2d 349, 187 N.Y.S.2d 866, 868 (1959). Here, counterclaim plaintiff Callaghan does not claim that Barr promised to perform a contract as they entered into it with no intention of performing, but that Callaghan was induced to enter into a different contractual relationship and continued employment based upon the allegedly fraudulent statement. Thus, the prohibition against a separate tort action while simultaneously alleging breach of contract does not apply in this instance The question, then, is whether defendant can otherwise survive plaintiffs motion to for summary judgment on his fraud claim.

  To prove fraud under New York law, "a plaintiff must show that (1) the defendant made a material false representation, (2) the defendant intended to defraud the plaintiff thereby, (3) the plaintiff reasonably relied upon the representation, and (4) the plaintiff suffered damage as a result of such reliance." Bridgestone/Firestone. Inc. v. Recovery Credit Services. Inc. 98 F.3d 13, 19 (2d Cir. 1996) citing Banque Arabe et Internationale D'Investissement v. Maryland Nat'l Bank, 57 F.3d 146, 153 (2d Cir. 1995). The complaining party must show each element by clear and convincing evidence. v. McNulty, 123 F. Supp.2d 750, 758-59 (S.D.N.Y. 2000), citing Banque Arabe et Internationale D'Investissement v. Maryland Nat'l Bank, 57 F.3d 146, 153 (2d Cir. 1995). With respect to the second element, if a party attempts to rest a fraud claim on conclusory allegations of intent, there must be a factual basis for the allegations that give rise to a strong inference that the defendant possessed the requisite fraudulent intent. Advanced Marine Technologies. Inc. v. Burnham Securities. Inc. 16 F. Supp.2d 375, 383 (S.D.N.Y. 1998), citing Beck v. Hanover Trust. Co. 820 F.2d 46, 50 (2d Cir. 1987), cert denied, 484 U.S. 1005, 108 S.Ct. 698, 98 L.Ed.2d 650 (1988) (citations omitted). "The requisite `strong inference' of fraud may be established either (a) by alleging facts to show that defendants had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness." Id., citing Shields v. Citytrust Bancorp. Inc., 25 F.3d 1124, 1128 (2d Cir. 1994). Furthermore, allegations based on information and belief are sufficient only if the facts are peculiarly within the knowledge of the defendant and the complainant alleges facts setting forth a sufficient basis to establish the inference of fraud. Id. at 384 citing Companiello Imports. Ltd, v. Saporiti Italia S.p.A. 117 F.3d 655, 664 (2d Cir. 1997).

  Here, as plaintiff makes clear, defendant Callaghan has not put forth any facts to support an inference of fraudulent intent other than to restate his allegation that Ban said he wanted to "drop renegotiation of the 1999" contract but that DAM subsequently refused to pay him 50% of the revenues earned from the Bankers Trust assets. Thus, Callaghan has not sustained his burden to make out the requisite level of fraudulent intent.

  Also, as to the fourth prong required to show fraud, Callaghan seeks the same damages for fraud as he does for breach of contract. However, an action for fraud cannot lie where damages are merely sought for breach of contract. 123 F. Supp.2d at 759 citing In re Chateaugay Corp. 10 F.3d 944, 958 (2d Cir. 1993) (holding that a fraud claim does not arise if the complainant essentially seeks enforcement of the bargain); Fraser v. Doubleday & Company Inc., 587 F. Supp. 1284, 1288 (S.D.N.Y. 1984); Matzan v. Eastman Kodak Co. 134 A.D.2d 863, 521 N.Y.S.2d 917 (1987). To the extent that he alleges that Barr's statement induced him to continue his employment at DAM by entering into a second contract, Callaghan has not alleged any damages that cannot be recovered under his breach of contract claim. See R.H. Damon & Co. v. Softkey Software Prods. Inc. 81 1 F. Supp. 986, 992 (S.D.N.Y. 1993) (fraud claim not separately maintainable where plaintiff does not `allege that [he] sustained damages in addition to those [he] could have anticipated in the event of a breach"). Thus, the fact that the damages he seeks for fraud are identical to the damages he seeks for breach of contract is fatal to his claim. Given the deficiencies Callaghan's fraud claim suffers regarding at least two of the four elements of fraud, Callaghan has failed to sustain his burden to rebut plaintiffs motion. Plaintiffs motion for summary judgment on Callaghan's counterclaim for fraud is GRANTED.

 IV. Defendant's Counterclaim for Unjust Enrichment

  Callaghan also counterclaims that DAM was unjustly enriched by its refusal to pay him a) bonus compensation for his management of Bankers Trust assets in 1999, and b) severance compensation under the 2000 contract. Def's Answer with Counterclaims, ¶ 111. Plaintiff DAM moves for summary judgment on this counterclaim.

  To prevail on a claim for unjust enrichment, the moving party must show that the defendant received money from or was otherwise enriched by the plaintiff to the defendant's benefit and, pursuant to principles of equity and good conscience, the defendant should not retain what plaintiff seeks to recover. See Madison-Oneida-Herkimer Consortium v. North American Administrators. Inc. 765 N.Y.S.2d 184 (N.Y.Sup. 2003); Clark v.Daby 751 N.Y.S.2d 622 (N.Y.A.D.3d Dept. 2002). Accordingly, claims for unjust enrichment seek restitution and are based upon theories of quasi-contract. Matter of Estate of Witbeck 666 N.Y.S.2d 315 (N.Y.A.D.3d Dept, 1997). A quasi-contract is one implied by law, where none in fact exists. James v. State, 457 N.Y.S.2d 148 (N.Y.A.D. 4th Dept. 1982). As such, relief on the basis of quasi-contract is only available in the absence of an enforceable written contract governing the same subject matter between the parties. See Seiden Associates. Inc. v. ANC Holdings, 754 F. Supp. 37, 39 (S.D.N.Y. 1991).

  Here, the terms of Callaghan's employment and related compensation are covered by enforceable and express contracts between the parties. As such, he may not recover under a theory of unjust enrichment. See Phansalkar v. Andersen Weinroth & Co. L.P., 2002 WL 1402297, at 14 (S.D.N.Y. 2002) ("If Phansalkar's employment in 2000 was covered by an express employment agreement setting the terms of his compensation, he may not recover under a theory of quantum meruit or unjust enrichment"). Plaintiffs motion for summary judgment on defendant's counterclaim for unjust enrichment is GRANTED.

 V. Defendant's Counterclaim for Defamation

  Plaintiff moves for summary judgment on Callaghan's counterclaim for defamation.

  First, Callaghan avers that Paula Olenskyj told him that "she had heard the accusation of embezzlement" from an unnamed person in the Compliance Department, but she did not believe the rumor to be true. Callaghan Dep. at 51. Second, Callaghan states that "Jim Capezutto told me that he had heard rumors of misappropriation of money." Callaghan Dep. at 54. Capezutto may have heard the rumors in the Legal Department, but, in Callaghan's own words, he doesn't "remember that clearly." Callaghan Dep. at 56. Third, Jones told Callaghan there were rumors that he had "done something wrong." Jones did not say specifically what the rumors were, except that "she had been speaking with David Baldt in the Philadelphia office and that people had been talking about [Callaghan's] situation."Id. at 56-57*fn6

  As to each of the three allegedly defamatory statements, Callaghan did not hear any of the rumors himself, but received the information second-hand from individuals who had heard the statements from someone else. Callaghan Dep. at 67-68. ". . . Callaghan does not know who told Olenskyj in the Compliance Department that he was being accused of embezzlement, or who told Capezutto in the Legal Department that Callaghan had misappropriated DAM funds . . ." Def's Memorandum of Law in Opp. to Pl.'s Motion for Partial Summary Judgment, at 19. His theory is that "these defamatory statements could only have been spread by the DAM senior executives with whom he had been negotiating his compensation." Id.

  To make out a claim for defamation under New York law, a defamation plaintiff must show: 1) the defendant made a false and defamatory statement about the plaintiff, 2) the defendant published the statement to a third party, 3) fault on the part of the defendant in doing so, and 4) injury to the plaintiff or per se actionability (defamation on its face). See Weldy v. Piedmont Airlines. Inc. 985 F.2d 57, 61 (2d Cir. 1993); Dillon v. City of New York, 261 A.D.2d 34, 37-38, 704 N.Y.S.2d 1, 5 (1999).

  New York law requires plaintiffs in a defamation action to set forth "the particular words complained of . . . in the complaint, but their application to the plaintiff may be stated generally." CPLR Rule 3016(a). The courts have interpreted this rule to require defamation plaintiffs to allege the defamatory words in haec verba and to disallow mere paraphrases of the words. Conley v. Gravitt 133 A.D.2d 966, 968, 520 N.Y.S.2d 672,674 (1987). In federal court, however, the Federal Rules of Civil Procedure govern the pleading requirements for defamation claims. Fed.R.Civ.P. 8 requires allegations of defamation that are "simple, concise, and direct," allowing the defendant sufficient notice of the communications complained of to allow the defendant to defend him or herself. Odom v. Columbia Univ. 906 F. Supp. 188, 196-97 (S.D.N.Y.1995); Kelly v. Schmidberger 806 F.2d 44, 46 (2d Cir. 1986). To fulfill this standard, the plaintiff must specify who made the statements, when they were made and in what context, whether they were made to a third party, and whether they were written or oral. See Bobal v. Rensselaer Polytechnic Inst. 916 F.2d 759, 762 (2d Cir. 1990) (dismissing defamation complaint because plaintiff failed to plead the words actually spoken, publication, or damages), cert. denied, 499 U.S. 943, 111 S.Ct. 1404, 113 L.Ed.2d 459 (1991); Wanamaker v. Columbian Rop Co. 713 F. Supp. 533, 545 (S.D.N.Y. 1989) (dismissing defamation claim because plaintiff did not articulate who made the statements, when they were made, in what context, whether they were written or oral, and whether they were published to a third party), aff'd 108 F.3d 462 (2d Cir. 1997).

  Even under the less stringent requirements of the Federal Rules of Civil Procedure, Callaghan's counterclaim for defamation cannot survive summary judgment. Short of conjecture, he has not put forth evidence as to who made the statements. Further, the court does not know whether the statements were written or oral, the context in which they were made, or when they were made. Statements to the effect that one of his co-workers heard that he had been accused of embezzlement, that another heard rumors regarding misappropriation, and that another "heard of his situation" do not constitute "simple, concise, and direct" statements that allow DAM an opportunity to defend itself.

  Moreover, a defamation plaintiff cannot rely on an inadmissible hearsay statement to defeat summary judgment unless the statement falls within one of the exceptions to the hearsay rule. Haugh v. Schroder Investment Management North America. Inc. 2003 WL 22119874 (S.D.N.Y. Sept. 15, 2003) (dismissing defamation claims because plaintiff could not rely on her own hearsay testimony of someone else's understanding of who made the allegedly defamatory statement or an article containing the statement); Jacobsen v. Deutsche Bank. A.G. 206 F. Supp.2d 590 (S.D.N.Y. 2002) (article that quotes defendant as making allegedly defamatory statements about the plaintiff is hearsay and does not show that defendant actually published the statement); Huntemann v. City of Yonkers 1997 WL 527880, at 10 (S.D.N.Y. Aug. 25, 1007) (a predicate to maintaining a defamation claim is an allegation, supported by admissible nonhearsay evidence, that the statement was made by defendants).

  Hearsay is "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801(c). Here, Callaghan's allegations of defamation are quintessential hearsay: he relies on statements conveyed to him by Olenskyj, Capezutto, and Jones that a third party made to prove the truth of the matter that the defamatory statements were actually made. Thus, unless Callaghan can identify an exception to the hearsay rule that takes the statements outside the auspices of inadmissible hearsay, the court cannot consider the statements upon summary judgment.

  Callaghan avers that the statements are admissible under Fed.R.Evid. 804(b)(3). That rule provides that if the declarant is unavailable as a witness, "a statement which was at the time of its making so far contrary to the declarant's pecuniary or proprietary interest, or so far tended to subject the declarant to civil or criminal liability, or to render invalid a claim by the declarant against another, that a reasonable person in the declarant's position would not have made the statement unless believing it to be true." Callaghan has not satisfied the prerequisite to the exception's applicability insofar as there is no showing that the individuals who made the allegedly defamatory statements, whomever they may be, are unavailable, or that Jones, Olenskyj, or Capezutto are unavailable. Further, because the statements themselves are so vague, Callaghan cannot show that they were so far contrary to the declarant's interest as to fall within the exception.

  While Callaghan relies exclusively on Rule 804(b)(3) to circumvent hearsay limitations, the court reviewed the other exceptions enunciated in Rule 804 and the statements not excluded under Rule 803 to conclusively determine whether there is a basis for admitting the statements in question. The court concludes that the statements are not admissible under either of these Federal Rules. The court also considered Rule 807, the "residual exception," which provides that "a statement not specifically covered by Rule 803 or 804 but having equivalent circumstantial guarantees of trustworthiness, is not excluded by the hearsay rule, if the court determines that A) the statement is offered as evidence of a material fact; B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence." Fed.R.Civ.P. 807. offered proof of circumstantial guarantees of trustworthiness to warrant application of the residual exception.

  Because Callaghan has failed to satisfy the pleading requirements for defamation under the Federal Rules, Callaghan's defamation claim fails as a matter of law. Alternatively, Callaghan's counterclaim for defamation rests exclusively upon inadmissible hearsay that cannot defeat a motion for summary judgment. As such, plaintiffs motion for summary judgment on Callaghan's counterclaim for defamation is GRANTED.

 VI. Defendant's 1999 Bonus Claim

  Callaghan moves for summary judgment on the grounds that plaintiff owes him an additional $569,274 in bonus compensation for 1999. He argues that the incentive compensation owed to him for 1999 is governed by the 1997 contract (incorporated by reference in the March, 1999 contract), which provides that the Team would receive 50% of the first $6 million of the gross revenues received by MGCM from the management of portfolios for which the Team was primarily responsible during that calendar year. He further alleges that because the Team was primarily responsible for management of Bankers Trust portfolios during the last seven months of 1999, and those portfolios generated, by his calculation, $4,208,500, he is entitled to one half of 50% of those revenues, representing $1,052,013.*fn7 Thus, while DAM already paid Callaghan $487,739 in bonus compensation for 1999, Callaghan avers that he is owed an additional $569,274.

  For its part, DAM does not seem to contest the assertion that Callaghan and the Team managed the Bankers Trust portfolios after the 1999 merger, but alleges that there is a material question of fact as to whether the 50% bonus compensation scheme set out in the 1999 contract applied to revenues generated from those portfolios. Specifically, DAM objects to summary judgment because a) the contract is ambiguous as to whether it applied to the Bankers Trust assets, b) even assuming it did apply, there is a material question of fact as to whether it was modified, and c) there is a material question of fact of whether Callaghan is equitably estopped from applying the contract to the Bankers Trust assets.

  In order to show that a contract has been modified, a party must establish the modification "in the same way as any other contract. No one will be held to have surrendered or modified any of his contract rights unless he is shown to have assented thereto in a manner that satisfies the requirements of a valid contract." Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading Inc. 252 F.3d 218, 228 (2d Cir. 2001) (emphasis in original) citing 6 Arthur Linton Corbin, Corbin on Contracts § 1293 (1962). See also Jofen v. Epoch Biosciences. Inc., 2002 WL 1461351, at 5 (S.D.N.Y. July 8, 2002) ("fundamental to the establishment of a contract modification is proof of each element requisite to the formulation of a contract, including mutual assent to each of its terms") citing Beacon Terminal Corp. v. Chemprene, Inc. 75 A.D.2d 350, 429 N.Y.S.2d 715, 717 (1980). In short, the inquiry that governs contract formation applies equally the question of contract modification.

  Under New York law, the required elements of contract formation are a) offer, b) acceptance, and c) consideration. See Lumhoo v. Home Depot USA. Inc., 229 F. Supp.2d 121, 161 (E.D.N.Y. 2002); see also Restatement (Second) of Contracts §§ 24, 50, 71 (1981). To determine whether a contract was formed, `the intent of the parties is of central importance." Precision Testing Labs., Ltd, v. Kenyon Corp. of Am. 644 F. Supp. 1327, 1343 (S.D.N.Y. 1986). The inquiry focuses on the "objective manifestations of intent of the parties as gathered by their expressed words and deeds" "given the attendant circumstances, situation of the parties, and the objectives they were striving to attain." Brown Bros. Elec. Contractors, Inc. v. Beam Constr. Corp. 41 N.Y.2d 397, 399-340, 393 N.Y.S.2d 350, 352, 361 N.E.2d 999 (1977).

  A written contract can be formed from more than one writing, including letters or memoranda signed by only one party or unsigned by either party. Consarc Corp. v. Marine Midland Bank, N.A. 996 F.2d 568, 572-73 (2d Cir. 1993) citing Crabtree v. Elizabeth Arden Sales Corp. 305 N.Y. 48, 53-55, 110 N.E.2d 551 (1953). "The failure of the writings to contain a disavowal is one of the common law principles courts rely on in deciding whether several writings together form a contract between the parties." Id. at 573, citing Arcadian Phosphates. Inc. v. Arcadian Corp. 884 F.2d 69, 72-73 (2d Cir. 1989).

  If the parties negotiating a proposed contract intend not to be bound until their agreement is reduced to an executed, written contract, the contract is not binding until their agreement is so formalized. Jim Bouton Corp. v. Wm. Wrigley Jr. Co. 902 F.2d 1074, 1081 (2d Cir. 1990). See also Feick v. Fleener 653 F.2d 69, 74 (2d Cir. 1981) ("Events are moving very rapidly and it will be to the family's advantage if we can formalize our understanding as soon as possible."); Tebbutt v. Niagara Mohawk Power Corp. 124 A.D.2d 266, 268, 508 N.Y.S.2d 69 (1986) (mem.) ("Please advise whether the foregoing terms are satisfactory to your clients and we can proceed to prepare whatever contract documents may be required."); Rosenzweig v. Salkind 5 A.D.2d 58, 60, 169 N.Y.S.2d 213 (1957), affd. 5 N.Y.2d 902, 183 N.Y.S.2d 82, 156 N.E.2d 712 (1959) (mem.) ("Will you please go over same, and if it is satisfactory, advise me, and I will have them executed, and arrange to meet with you within the next day or two for the purpose of concluding this matter."); ABC Trading Co. v. Westinghouse Electric Supply Co. 382 F. Supp. 600, 602 (E.D.N.Y.1974) ("If your client finds this proposal agreeable in principle, we can proceed to reduce it to a written agreement. . . ."). At the same time, if the parties reach an agreement through correspondence or other writings, and intend merely to execute a contract as evidence of their agreement, the parties may be bound even absent a more formal writing or before the written documents are drawn up. See Consarc Corp. 996 F.2d at 574-76.

  Furthermore, the parties' conduct plays a central role in contract formation and, by extension, contract modification. "(T)he existence of a contract may be established through conduct of the parties recognizing the contract." Apex Oil v. Vanguard Oil and Serv. Co. 760 F.2d 417, 422 (2d Cir. 1985). In the same vein, "a contract can be modified by agreement, whether express or implied." Southern Federal Sav. and Loan Ass'n of Georgia v. 21-26 East 105th Street Associates, 145 B.R. 375, 386 (S.D.N.Y. 1991); Marine Transp. Lines. Inc. v. International Ore, of Master. Mates & Pilots, 878 F.2d 41, 45 (2d Cir. 1989) ("an agreement to modify a contract may be proven circumstantially the conduct of the parties") (citation omitted). See also Dallas Aerospace, foe. v/CIS Air Corporation, 352 F.3d 775, 783 (2d Cir. 2003) ("under New York law, parties may modify a contract by another agreement, by course of performance, or by conduct amounting to a waiver or estoppel) (internal citation omitted). Similarly, although acceptance "must comply with the terms of the offer and be clear, unambiguous, and unequivocal," King v. King, 208 A.D.2d 1143, 1143-44, 617 N.Y.S.2d 593 (1994) (citations omitted), "a unilateral offer can be accepted by another party's conduct and thereby give rise to contractual obligations," Consarc Corp. v. Marine Midland Bank. N.A. 996 F.2d 568, 572-73 (2d Cir. 1993) citing John William Costello Assocs. v. Standard Metals Corp., 99 A.D.2d 227, 231, 472 N.Y.S.2d 325 (1984).

  The guiding principle behind all of these inquiries into contract formation is that they are for the factfinder. "[T]he issue of whether or not the parties ever came to a meeting of the minds so as to have entered into an enforceable agreement should properly be left to the determination of the trier of fact." Bauman Assoc., Inc. v. H & M Int'l Transport. Inc. 567 N.Y.S.2d 404, 408, 171 AJD.2d 479 (1991) See also Ronan Associates, Inc. v. Local 94-94A-94B. Intern. Union of Operating Engineers. AFL-CIO, 24 F.3d 447, 449 (2d Cir. 1994) ("Under traditional principles of contract law, questions as to what the parties said, what they intended, and how a statement by one party was understood by the other are questions of fact; however, the matter of whether or not there was a contract, in light of the factual findings on these questions, is an issue of law") citing Four Seasons Hotels. Ltd, v. Vinnik 127 A.D.2d 310, 317, 515 N.Y.S.2d 1, 6 (1987); Cortland Asbestos Products. Inc. v. J. & K. Plumbing & Heating Co. 33 A.D.2d 11, 12, 304 N.Y.S.2d 694, 696 (1969) ("while the existence of a contract is a question of fact, the question of whether a certain or undisputed state of facts establishes a contract is one of law for the courts. . . ."). Whether or not contract formation can be implied from the parties' course of conduct is question for the trier of fact. See Brown Bros. Elec. Contractors. Inc. 41 N.Y.2d 397, 393 N.Y.S.2d 350. Similarly, even in cases where the evidence strongly suggests that the parties did not intend to be bound absent a written agreement, whether they so intended is a question for the factfinder to decide. See Consarc Corp. 996 F.2d at 576. As such, just as the question whether the parties intended to form a contract is a question of fact, so is the question whether the parties' conduct expresses an intention to modify an existing agreement. Marine Transp. Lines. Inc. 878 F.2d at 45 (affirming the lower court's finding of a contract modification after a bench trial because intent to modify was shown by clear and convincing evidence); see also Three S. Dev. Co. v. Santore 193 Conn. 174, 474 A.2d 795, 798 (1984).

  Here, the evidentiary record contains sworn statements by DAM representatives that they told Callaghan that the 50% compensation scheme would not apply to the Bankers Trust assets, yet Callaghan agreed to manage the portfolios nevertheless. Weinreich Decl., at ¶ 7; Weinreich Dep. at 71-72. DAM submitted two agreements to Jones and Callaghan around the time Jones and Callaghan began to manage the Bankers Trust portfolios, both of which explicitly provided that revenues from Banker's Trust assets would not be included in their bonus compensation for 1999, one of which was signed by two DAM officials and was not preceded with the word "draft" like the earlier version. At the same time, in Jones' and Callaghan's "summary of last remaining issues with [their] agreement," they did not object to the provision.*fn8 Finally, Callaghan accepted third fourth quarter bonus payments excluding compensation for the Bankers Trust assets, although these payments were, in total, over half a million dollars shy of what Callaghan would have received had the 50% compensation scheme applied to the Bankers Trust portfolios. In light of this evidence, there are material triable issues of fact regarding whether the parties expressly or impliedly modified their agreement. Specifically, a trial is necessary to determine whether Callaghan's conduct constituted acceptance of DAM's offer to transfer the portfolios to the Team in exchange for a modified compensation scheme, whether they intended to modify the contract without formalizing their agreement in a written contract, whether they came to a meeting of the minds as to a modification, whether Callaghan's silence in the face of the two proposals excluding the Bankers Trust assets from the 50% compensation scheme constituted acceptance, or whether Callaghan's acceptance of third and fourth quarter bonus payments excluding the Bankers Trust revenues illustrates that the parties did in fact modify their agreement.

  Because there are material factual questions regarding a possible modification of the 1999 contract, the court does not address whether the contract applies to the Bankers Trust assets or whether Callaghan is equitably estopped from relying on the contract to seek bonus compensation relating to those assets. Callaghan's motion for summary judgment on his 1999 bonus compensation claim is DENIED. CONCLUSION

  Plaintiff's motion for summary judgment on Callaghan's counterclaims for severance compensation, liquidated damages and attorneys fees, fraud, unjust enrichment, and defamation is GRANTED. Defendant's motion for summary judgment on his counterclaim for severance pay, liquidated damages, and additional bonus compensation for his management of Bankers Trust portfolios in 1999 is DENIED.

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