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Rodriguez v. Lopez

Other Lower Courts

January 30, 2008

Israel Rodriguez, Plaintiff,
Osiris Lopez and D'Caches Bar & Night Club, Defendant.

Editorial Note:

This case is not published in a printed volume and its disposition appears in a table in the reporter.


Sylvia G. Ash, J.

Plaintiff seeks to recover the sum of $24,000 for alleged breach of an oral employment contract.

Plaintiff testified that on or about February, 2002, Defendant purchased a Bar located in Brooklyn, New York. That shortly thereafter, Plaintiff and Defendant entered into an oral agreement whereby Plaintiff agreed to assist Defendant in setting up the Bar. Plaintiff stated that he started working as the Manager of the Bar on May 7, 2002, and as the Manager he was responsible for the daily operation of the Bar including obtaining the necessary licenses and permits; dealing with the security alarm company; dealing with the beer and liquor suppliers; hiring, firing and paying the employees and musicians; collecting the proceeds from the Bar and opening and closing the Bar. In exchange for the above duties, Plaintiff testified that Defendant verbally agreed to pay him a weekly salary of $1,500.00 when the Bar started making money. Plaintiff further stated he collected approximately $2000.00 per week in proceeds from the Bar. That there were 5 employees whom he hired to work at the Bar who were each paid $300.00 in cash per week from the collected proceeds. Plaintiff presented witnesses who testified that they were hired and paid by Plaintiff to work at the Bar and that during their employment, although Defendant was present at times, Plaintiff was the Manager and the person responsible for the daily operation of the Bar. Plaintiff stated that all money transactions concerning the operation of the Bar were conducted in cash. Plaintiff further stated he worked at the Bar from May, 2002 to August, 2002 and did not receive any payment from Defendant during this period.

Defendant testified that he knew the Plaintiff since 1998 and that Plaintiff had worked for him as a taxi driver from 1999 to 2002. That when Plaintiff found out that Defendant had purchased a Bar, Plaintiff approached him and offered to give him advice on how to operate the Bar such as how to obtain the necessary permits and where to purchase liquor. That in exchange for Plaintiff's advice, Defendant compensated Plaintiff by reducing his bar bill and that he asked Plaintiff to stop coming to the Bar when he found out that Plaintiff was stealing liquor from the Bar and being fresh with the clients. Defendant further testified that at no time did he agree to hire Plaintiff as the Manager of the Bar and that he never agreed to pay Plaintiff $1,500.00 per week. Defendant produced a witness, Nelson Batista, who testified that he was hired by Defendant to be the Manager of the Bar and that he worked at the Bar from April, 2002 until the Bar was sold. Defendant further testified that he had no business records or receipts form the Bar and that all transactions concerning the Bar was by way of cash or personal checks.

The Court does not credit Defendant's testimony that the services provided by Plaintiff was merely friendly unsolicited advice. It is clear from the testimony, that while Defendant was present at the Bar on a daily basis, Plaintiff was the one who handled the personnel issues and dealings with various providers and suppliers. Significantly, Plaintiff was the one who collected the Bar proceeds and paid the employees in Defendant's absence. Defendant's witness, Nelson Batista's, testimony that he was the Manager of the Bar was not persuasive. Mr. Batista testified that he had never worked in a Bar and had no prior managerial experience. He was unable to describe his duties as the Manager, he did not know the names of the liquor distributors or the security alarm company and did not handle any correspondence concerning th Bar.

Accordingly, the Court finds that there was an oral agreement between the parties wherein Defendant agreed to hire Plaintiff to work as the Manager in his Bar. That based on their past relationship, the parties agreed that Plaintiff would receive payment when the Bar began making money.

The Court must now determine if the oral agreement between the parties is enforceable. Oral agreements are covered by the Statute of Frauds as found in section 5-701(a)1) of the General Obligation Law, which require that employment contracts for more than one year must be in writing to be enforceable. Therefore any oral agreement for employment for more than one year is within the Statute of Frauds and is thus unenforceable. Courts have generally been reluctant to give this provision too broad an interpretation and have limited it to those contracts that have absolutely no possibility of performance within one year. Wherever an agreement has been found to be capable of fulfillment within one year, Courts have found the Statute to be inapplicable. Here the parties did not set a specific length of time for Plaintiff's employment and the testimony established that Plaintiff's employment lasted less than one year. The Court finds that the oral agreement in this case constitutes a "hiring at will, terminable at any time by either party" ( Sabetay v Sterling Drug, 69 N.Y.2d 329). A contract that is terminable at will by either party does not violate the Statute of Frauds. Therefore, the oral agreement between the Plaintiff and the Defendant does not violate the Statute of Frauds and is thus enforceable. ( Raes v. So-Lite Furniture Corp., 4 A.D.2d 851).

Plaintiff argues that Defendant breached the contract by failing to pay him for his services.

However, Plaintiff's compensation was conditioned on the business making money. It was Plaintiff's burden to demonstrate that the condition was met to establish the breach. Plaintiff testified that the business started making money, but did not produce proof to support this contention. Both parties testified that during the period that Plaintiff worked at the Bar, weekly proceeds in the sum of $2,000.00 was collected. However, there was no testimony from either party as to the weekly expenses of the Bar or whether the $2,000.00 collected were weekly net proceeds. Plaintiff's testimony established that 5 employees were each paid $300.00 per week from the $2,000.00 collected which left a balance of $500.00. If we are to assume that the remaining $500.00 balance was the Bar's profit, it is clear that there was insufficient funds to pay Plaintiff the $1,500.00 per week pursuant to the terms of the agreement. Accordingly, the Court finds that Plaintiff has failed to meet his burden and may not recover for breach of contract.

However, "...where a litigant fails to establish the right to recover under an express contract he may, in the same action, recover in quantum meruit." ( Smith v. Kirkpatrick, 305 N.Y. 66). Under quantum meruit a party may recover the value of work, labor, or services. The phrase quantum meruit means "as much as deserved" ( Buckley & Co. v. New York, 121A.D.2d 933). It is used as a device for the prevention of unjust enrichment of one party at the expense of another. Here, Plaintiff alleged that based on the contract, Defendant has unjustly benefitted at his expense and seeks compensation. There is no dispute that Plaintiff was not compensated for the services he rendered. The Court finds that based on the facts of this case, recovery under quantum meruit is appropriate.

Having found that Plaintiff was an employee of the Bar, as such, he was entitled to receive weekly compensation for his services. Given the fact that the other employees of the Bar each received $300.00 per week for their services, the Court finds that as the Manager, Plaintiff is entitled to receive a sum higher than the amount received by the employees whom he supervised. Therefore, the Court awards payment of $500.00 per week to the Plaintiff under the theory of quantum meruit.

Accordingly, Judgment is entered in favor of Plaintiff for the sum of $8,000.00 for the period from May 7, 2002 through August 31, 2002, plus interest thereon ...

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