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Gold v. American Medical Alert Corp.

United States District Court, S.D. New York

February 16, 2017

DANIEL MARTIN GOLD, Plaintiff,
v.
AMERICAN MEDICAL ALERT CORP., Defendant.

          For Plaintiff Daniel Martin Gold: KARLINSKY LLC Martin E. Karlinsky Amy A. Lehman

          For Defendant American Medical Alert Corp.: FOX ROTHSCHILD LLP James Lemonedes Barri A. Frankfurter

          OPINION & ORDER

          JOHN F. KEENAN, United States District Judge:

         Plaintiff Daniel Martin Gold brings this action for breach of contract alleging that Defendant American Medical Alert Corporation (“AMAC”) terminated his employment without cause, in violation of his employment agreement with the company. AMAC moves for summary judgment, arguing that the undisputed facts establish that Gold was terminated for cause and that AMAC is therefore entitled to judgment as a matter of law. As explained below, there are genuine issues of material fact regarding whether Gold was terminated for cause under the employment agreement. Accordingly, the Court denies AMAC's motion for summary judgment.

         Background

          Unless otherwise noted, the following facts are not in dispute. AMAC is a healthcare communications company incorporated in New York with its principal place of business in Long Island City, New York. (Compl. ¶¶ 4-5.) It sells products such as personal emergency response systems, electronic medication reminder devices, and disease management monitoring appliances. (Id. ¶ 5.) Gold, a citizen of Virginia, began doing consulting work for AMAC in 2008 and entered into an employment agreement with the company in January 2010. (Id. ¶ 3; Def.'s Loc. R. 56.1 Statement ¶¶ 4, 6 [hereinafter Def.'s 56.1 Statement].) In March 2012, the parties agreed to a second employment agreement-the contract at issue here-which provided that Gold would serve as the senior vice president for AMAC's Health and Safety Monitoring Systems Division. (Def.'s 56.1 Statement ¶ 6; Decl. of James M. Lemonedes Ex. D.) The agreement covered a three-year period from January 1, 2012, through December 31, 2014, (see Lemonedes Decl. Ex. D at 1), and by its terms is governed by New York law. (See id. at 5.)

         If AMAC terminated Gold without cause, the employment agreement provided that Gold would be entitled to certain compensation and benefits, including his annual base salary of $240, 000.00 through the third year of the agreement, a bonus payment for the year of his termination, and continued health benefits. (Id. at 3.) Section 9(a)(iii) of the agreement defined “cause” to include “the commission of an act of bad faith (i.e., an act involving actual or constructive fraud, or a design to mislead or deceive another, or the conscious doing of a wrong because of dishonest purpose or motivated by ill will).” (Id.; Def.'s 56.1 Statement ¶ 7.) Under section 9(a)(vi) of the agreement, any violation by Gold of AMAC's Code of Business Conduct and Ethics (the “Code of Conduct”) also amounted to “cause.” (Lemonedes Decl. Ex. D at 3; Def.'s 56.1 Statement ¶ 7.)

         The Code of Conduct provided, among other things that each director, officer, or employee of AMAC “has a responsibility to all other directors, officers, employees and to [AMAC] itself”; that each employee must “act responsibly, in good faith and with competence and diligence . . . without misrepresenting material facts or allowing your independent judgment to be subordinated”; that all employees “must handle any actual or apparent conflict of interest in an ethical manner”; that conflicts of interest “exist when a person's private interest interferes in any way with the interest of [AMAC], ” including by “taking actions or having interests that interfere with your ability to effectively and objectively perform your work”; and that employees “should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.” (Lemonedes Decl. Ex. E at 1-3; see also Def.'s 56.1 Statement ¶¶ 8-11.)

         AMAC terminated Gold on October 31, 2012. (Def.'s 56.1 Statement ¶ 41.) In a written termination letter, AMAC informed Gold that his termination was for cause under Sections 9(a)(iii) and 9(a)(vi) of his employment agreement. (Id. ¶¶ 41, 43; Lemonedes Decl. Ex. I.) Specifically, the termination letter described the basis for Gold's termination as follows:

We have learned that you directed an employee to complete a “special project” for you -- a memo whose sole purpose was to prevent the Company's hire of a new sales executive and protect your own position.
You advised the employee that the project would require that he not think of himself as an AMAC employee, and that he would have to separate himself completely from his employment with the Company in order to complete the project.
You offered to pay him for this so-called project out of your own pocket. You told him to keep his involvement in the project completely confidential from the Company. You also instructed him to deny that he had played any role in the so-called project if the Company were to ask him about it.

(Lemonedes Decl. Ex. I at 1.)

         In support of its position that Gold was terminated for cause, AMAC produces an October 26, 2012 “Incident Report” prepared by Robert Farrish, the other AMAC employee referenced in Gold's termination letter. (Def.'s 56.1 Statement ¶ 13; Lemonedes Decl. Ex. F.) Because the Incident Report supplies the principal evidence that ...


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