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Rosenthal v. Quadriga Art

January 21, 2010

GLORIA ROSENTHAL, ETC., PLAINTIFF-APPELLANT,
v.
QUADRIGA ART, INC., DEFENDANT-RESPONDENT.



Order, Supreme Court, New York County (Helen E. Freedman, J.), entered May 13, 2008, that, in an action arising out of a contract in which defendant agreed to pay plaintiff's decedent commissions for selling defendant's products, insofar as appealed from as limited by the briefs, upon the parties' respective motions for partial summary judgment, held that defendant is not obligated to pay plaintiff certain post-death commissions, affirmed, with costs.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Saxe, J.P., Sweeny, Moskowitz, Acosta, Richter, JJ.

116974/06

On or about August 4, 1994, plaintiff's decedent, Alfred Rosenthal, entered into a contract with defendant to sell defendant's products for a 10% commission. The contract, that defendant's president, Thomas Schulhof, an attorney, prepared, stated: The term of this agreement shall commence on September 1, 1994, and shall be in effect for one year, at which time it will automatically renew from year to year. However, either party has the right to terminate this agreement, upon thirty (30) days notice in writing by either certified or registered letter. However, no notice can be given for the first sixty (60) days of contract.However, in the event of termination, the following shall survive:a. You shall agree not to solicit any Quadriga accounts for a three-year period following the date of notice of termination.b. Quadriga agrees to pay commission to you on any accounts introduced to Quadriga, not previously served by Quadriga, by you and which were being serviced by you at the time of termination and for which orders are shipped during the same three-year period.

Thus, the letter agreement provides that it would automatically renew for one-year periods unless either party gave a 30-day notice of termination in writing. Upon termination, Alfred agreed he would refrain from soliciting defendant's clients and defendant agreed to continue to pay certain commissions to decedent, both for a three year period. The parties worked together, pursuant to the contract, until July 4, 2004, when Alfred passed away.

On or about November 9, 2006, plaintiff commenced this action claiming entitlement to commissions on the theory that the contract terminated upon Alfred's death and that, pursuant to the contract, defendant was obligated to pay three years' worth of commissions. On or about November 29, 2007, plaintiff moved for partial summary judgment. Defendant cross-moved for, among other things, partial summary judgment with respect to payments allegedly due after Alfred's death. The motion court denied plaintiff's motion and granted defendant's motion for summary judgment dismissing the case. Noting that "no one solicits accounts after death," the court interpreted the agreement to mean that the payments for three years was in return for decedent refraining from soliciting defendant's accounts. Because Alfred had died, there would be no solicitation and therefore no commissions.

The motion court was correct. The post-termination payments are clearly in exchange for plaintiff agreeing not to compete. There is no provision that states or even implies that plaintiff's death will entitle his estate to collect three years in post-death payments (Sodus Manufacturing Corp., v Reed, 94 AD2d 932, 933 [1983]). Moreover, decedent never adhered to the procedures for termination, namely "thirty (30) days notice in writing by either certified or registered letter." Without a proper termination, the obligation to pay commissions is not triggered.

We have considered plaintiff's remaining contentions and find them unavailing. All concur except Saxe, J.P., and Acosta, J. who concur in a separate memorandum by Saxe, J.P. as follows: SAXE, J.P. (concurring)

Issues of contract interpretation can be troublesome even where the contract is short and facially uncomplicated. In this appeal, we are asked to decide whether the words "in the event of termination" in the contract between defendant and plaintiff's decedent refer only to termination on the terms provided for in the immediately preceding paragraph, or whether those words should be understood to include termination of the contract by reason of one party's death.

Alfred J. Rosenthal entered into a contract with defendant Quadriga Art in August 1994, in which it was agreed that beginning September 1, 1994, he would sell defendant's products for a 10% commission. The written contract, prepared by defendant's president, included the following provisions: The term of this agreement shall commence on September 1, 1994, and shall be in effect for one year, at which time it will automatically renew from year to year. However, either party has the right to terminate this agreement upon thirty (30) days notice in writing by either certified or registered letter. However, no notice can be given for the first sixty (60) days of contract.However, in the event of termination, the following shall survive:a. You shall agree not to solicit any Quadriga accounts for a three-year period following the date of notice of termination.b. Quadriga agrees to pay commission to you on any accounts introduced to Quadriga, not previously served by Quadriga, by you and which were being serviced by you at the time of termination and for which orders are shipped during the same three-year period.

Alfred worked for Quadriga until his death on July 4, 2004. In this action, brought by his widow, it is alleged that under the terms of the contract, his estate is entitled to continued payments for three years as required by subparagraph (b) of the contract, which obligation plaintiff contends survived when the contract was terminated due to Alfred's death.

Plaintiff requested partial summary judgment seeking a declaration that the employment contract terminated upon Alfred's death and that, pursuant to the contract, defendant was therefore obligated to pay three years' worth of commissions from the date of termination --- in this instance, the date of his death. Defendant cross-moved for partial summary judgment dismissing the claim for payments allegedly due after Alfred's death, contending that the clear and unambiguous ...


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