Appeal from an order of the Supreme Court, Monroe County Kenneth R. Fisher, J. entered August 24, 2009 in a breach of contract action. The order granted the motion of defendant to set aside the jury verdict and dismissed the amended complaint.
James V. Aquavella, M.D., P.C. v Viola
Appellate Division, Fourth Department
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.
Decided on December 30, 2010
PRESENT: SCUDDER, P.J., PERADOTTO, CARNI, GREEN, AND GORSKI, JJ.
It is hereby ORDERED that the order so appealed from is affirmed without costs.
Plaintiffs commenced this action seeking damages for defendant's breach of a 1998 oral employment agreement (1998 oral agreement) pursuant to which defendant was to be an employee of plaintiff James V. Aquavella, M.D., P.C. (Aquavella, P.C.). According to plaintiffs, the 1998 oral agreement incorporated all of the terms and conditions of a 1996 written employment agreement (1996 written agreement) between defendant and Urban Oncology Service, P.C., doing business as Eye Care of Genesee Valley (Urban Oncology). The 1996 written agreement contained, inter alia, a non-compete clause prohibiting defendant from competing with Urban Oncology's business for two years after the expiration of the 1996 written agreement or termination of defendant's employment, whichever occurred later.
In 1995,plaintiff James V. Aquavella, M.D. (Aquavella) sold the assets of his ophthalmology practice to EquiVision, Inc. (EquiVision), which then entered into a Services Agreement with Urban Oncology. Aquavella then became an employee of Urban Oncology. Pursuant to the Services Agreement, Urban Oncology would provide professional medical patient services, including hiring and contracting with physicians, and EquiVision would serve as business manager for the practice. Ultimately, EquiVision, then known as EquiMed, sold its interest in the assets of the practice to Physicians Resource Group, Inc. (PRG). In 1998, following a dispute with Aquavella, PRG terminated all non-medical employees and Urban Oncology stopped paying the physicians. In 1998, Aquavella spoke with defendant, and the parties agreed that defendant would continue his employment at the practice with plaintiffs as his employers. However, the parties sharply dispute whether their 1998 oral agreement included all of the terms and conditions of the 1996 written agreement between defendant and Urban Oncology, inclusive of the two-year non-compete clause.
In 1999, plaintiffs executed an agreement with PRG that, inter alia, provided for plaintiffs' purchase of the assets of the practice. In August 1999, the parties undertook negotiations concerning defendant's proposed purchase of the practice. Those negotiations were not successful and, in 2002, defendant departed from plaintiffs' practice and opened a competing practice within 300 yards of his former employers.
Plaintiffs' amended complaint alleged that defendant breached the non-compete clause in the 1996 written agreement that, according to plaintiffs, had been incorporated in its entirety as a term and condition of the 1998 oral agreement. Following trial, the jury determined that Aquavella and defendant entered into an oral employment agreement that included all of the terms and conditions of defendant's 1996 written agreement with Urban Oncology. The jury further determined that defendant had breached the non-compete clause and awarded plaintiffs damages in the sum of $248,798.76. Supreme Court granted defendant's motion pursuant to CPLR 4404 (a) for judgment notwithstanding the verdict and dismissed plaintiffs' amended complaint on the grounds that defendant had not made any admission that the terms and conditions of the 1996 written agreement were incorporated into the 1998 oral agreement and that the writings proffered by plaintiff, either alone or in combination, were insufficient to satisfy the statute of frauds (see General Obligations Law § 5-701 [a] ). We affirm.
Inasmuch as the non-compete clause plaintiffs seek to enforce spanned a period of two years, it cannot be performed within one year and thus is subject to the statute of frauds (see id.). The record belies plaintiffs' contention that defendant admitted through his pleadings and trial testimony that the terms and conditions of the 1996 written agreement were incorporated into the 1998 oral agreement and, indeed, the record establishes that defendant sharply disputed it throughout the litigation (see Tallini v Business Air, 148 AD2d 828, 829-830; see also Williams v Lynch, 245 AD2d 715, appeal dismissed 91 NY2d 957). We reject plaintiffs' further contention that various writings admitted in evidence, including some that were signed by defendant, satisfy the statute of frauds. " [T]he memorandum [necessary to satisfy the statute of frauds] . . . may be pieced together out of separate writings, connected with one another either expressly or by the internal evidence of subject matter and occasion' " (Crabtree v Elizabeth Arden Sales Corp., 305 NY 48, 54, quoting Marks v Cowdin, 226 NY 138, 145) and, in the event "that . . . one of the writings is unsigned, [it] may be read together [with the signed writings], provided that they clearly refer to the same subject matter or transaction' " (Scheck v Francis, 26 NY2d 466, 471, quoting Crabtree, 305 NY at 55). All of the terms of the contract, however, "must be set out in the various writings presented to the court, and at least one writing, the one establishing a contractual relationship between the parties, must bear the signature of the party to be charged, while the unsigned document[s] must . . . refer to the same transaction as that set forth in the one that was signed" (Crabtree, 305 NY at 55-56).
Here, plaintiffs contend that the parties' 1998 oral agreement incorporated all of the terms and conditions of defendant's 1996 written agreement with his former employer, Urban Oncology. That essential term does not appear in any of the writings, leaving a fatal void in plaintiffs' attempt to piece together a sufficient memorandum through the presentation of various signed and unsigned documents (see id. at 55). Plaintiffs further contend that the Letters of Intent signed by defendant in 1999 with respect to his proposed purchase of the practice constitute evidence of defendant's agreement to incorporate all of the terms and conditions of the 1996 written agreement into the 1998 oral agreement. We reject that contention. Pursuant to paragraph 4 (e) of the Letters of Intent, one of the conditions to closing the transaction was "(e) a written termination of the employment contract between [defendant] and Aquavella[, P.C.], together with a release of all covenants contained therein, and . . . proof satisfactory to [defendant] that Aquavella[, P.C.] is the sole unencumbered assignee of said contract (named party is Urban Oncology Services, P.C. [doing business as] Eye Care of the Genesee Valley')." The 1996 written agreement required that any mutual termination thereof be in writing. We conclude that paragraph 4 (e) is an unequivocal attempt by defendant, as part of the due diligence process in the practice purchase transaction, to extinguish any lingering obligations or covenants arising from the "said contract," i.e., the 1996 written agreement. A fair reading of defendant's trial testimony compels the same conclusion. The request for "proof satisfactory" to defendant that Aquavella, P.C. was the sole "assignee" of that contract demonstrates that defendant was requiring Aquavella, P.C. to establish that it was the successor by assignment to defendant's 1996 written agreement with Urban Oncology and therefore had the right to terminate the non-compete clause contained in that agreement. It is noteworthy that, when plaintiffs commenced this action in 2002, the complaint did not contain any claim that the parties had adopted or incorporated the 1996 written agreement into the 1998 oral agreement. Instead, plaintiffs' complaint was based entirely upon the claim that Aquavella, P.C. was the sole assignee of the 1996 written agreement. In 2007, this Court modified a prior order in this case, affirming that part of the order that, inter alia, denied that part of plaintiffs' motion for partial summary judgment ...