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Kieper v. The Fusco Group Partners Inc.

Supreme Court of New York, Third Department

July 20, 2017


          Calendar Date: June 8, 2017

          Hodgson Russ, LLP, Albany (Christian J. Soller of counsel), for appellants.

          Granich Law Firm, Albany (J. David Burke of counsel), for respondent.

          Before: Garry, J.P., Egan Jr., Lynch, Mulvey and Aarons, JJ.


          AARONS, J.

         Appeal from an order of the Supreme Court (Nolan Jr., J.), entered March 17, 2016 in Saratoga County, which denied defendants' motion for summary judgment dismissing the complaint.

         From September 1999 to January 2012, plaintiff was employed by defendant The Fusco Group Partners Inc. (hereinafter WorldClaim), of which defendant Andrew Fusco (hereinafter Fusco) was the president. WorldClaim acts as a client liaison for individuals who, after suffering a casualty loss, sought insurance payments from their insurer. Plaintiff was a salesperson whose job for WorldClaim was to obtain clients and have them sign a contract whereby WorldClaim would serve as their liaison to adjust their loss. In addition to being paid a salary, plaintiff would receive a commission depending, in part, on the amount of money recovered on behalf of a client.

         In January 2012, plaintiff resigned from WorldClaim. Plaintiff commenced this action alleging causes of action for breach of contract and a violation of Labor Law § 193 [1]. In particular, plaintiff alleged that defendants failed to pay him, as relevant here, commissions totaling $104, 525 and monthly bonuses totaling $25, 000 for the time period between April 2011 and January 2012. Defendants thereafter moved for summary judgment seeking dismissal of the complaint. Supreme Court denied defendants' motion. Defendants now appeal.

         Turning first to plaintiff's claim for unpaid commissions, at the outset, we reject defendants' assertion that such claim is barred by the statute of frauds. "An agreement to pay an at-will employee commissions earned during the period of his or her employment is capable of performance within one year and does not violate the [s]tatute of [f]rauds" (Strauss v Fleet Mtge. Corp., 282 A.D.2d 736, 736 [2001] [citations omitted]; see Cron v Hargro Fabrics, 91 N.Y.2d 362, 371 [1998]; Moshan v PBM, LLC, 141 A.D.3d 496, 497 [2016]; Gold v Benefit Plan Adm'rs, 233 A.D.2d 421, 421 [1996]). Here, the gravamen of plaintiff's complaint is not about renewal commissions that accrued after his resignation from WorldClaim (see e.g. Gersten-Hillman Agency, Inc. v Heyman, 68 A.D.3d 1284, 1287 [2010]; Guterman v RGA Accessories, 196 A.D.2d 785, 785 [1993]; Warner & Whitney v Union Camp Corp., 166 A.D.2d 776, 776-777 [1990]). Rather, plaintiff seeks the payment of commissions that he claims were earned while he was still employed by WorldClaim (cf. Miloscia v B.R. Guest Holdings, LLC, 94 A.D.3d 563, 564 [2012]). Indeed, the complaint alleged that plaintiff, "[d]uring the period from approximately April 2011 to January 2012, ... earned $104, 525 in commissions from sales, [and] $25, 000 in monthly bonuses." Given that plaintiff was still employed by WorldClaim during this alleged time period, the statute of frauds does not bar plaintiff's claim for unpaid commissions (see White v Purchasing Support, 249 A.D.2d 991, 991 [1998]; Murphy v CNY Fire Emergency Servs., 225 A.D.2d 1034, 1035 [1996]).

         To that end, the question distills to whether plaintiff earned the commissions alleged in the complaint. "'Once the commission is earned, it cannot be forfeited'" (Devany v Brockway Dev., LLC, 72 A.D.3d 1008, 1009 [2010], quoting Arbeeny v Kennedy Exec. Search, Inc., 71 A.D.3d 177, 182 [2010]). "Whether a commission is earned is dependent upon the terms of the agreement providing for such commission" (Gennes v Yellow Book of N.Y., Inc., 23 A.D.3d 520, 521 [2005] [citations omitted]).

         Plaintiff's claim for unpaid commissions centers on the employment agreement providing that "[plaintiff] shall be paid a commission on all fees generated by [plaintiff] and collected by WorldClaim." Contrary to defendants' argument, we do not read this provision as unambiguously stating that plaintiff, upon the cessation of his employment with WorldClaim, would not be entitled to be paid earned commissions (see Yudell v Israel & Assoc., 248 A.D.2d 189, 189-190 [1998]; compare Morrow v MVP Health Plan, 307 A.D.2d 627, 627-628 [2003]; Dwyer v Burlington Broadcasters, 295 A.D.2d 745, 745-746 [2002], lv denied 98 N.Y.2d 611');">98 N.Y.2d 611 [2002]). The provision at issue does not expressly state that current employment with WorldClaim is a condition to receive earned commissions.

         Furthermore, as to that part of the provision in the employment agreement stating that a commission would be paid on all fees "generated" by plaintiff, we find such term to be ambiguous. In this regard, the employment agreement does not expound upon this term nor does the record provide any clarification as to what it means for a fee to be "generated" by plaintiff. Fusco testified that plaintiff's job entailed signing a loss and "stay[ing] in contact with the client until the claim is settled." Fusco acknowledged that signing a loss comprised the bulk of plaintiff's duties, but he also stated that plaintiff needed to be "a liaise between the adjusters and the clientele." In contrast, plaintiff testified that it was his job "to bring the business into the company" and that he "didn't adjust claims." Plaintiff further explained that "[he] did [his] job in signing the loss up." According to plaintiff, once he signed a client, he no longer worked with the client and someone else handled the claim. In view of the foregoing, we conclude that the record discloses triable issues of fact as to whether plaintiff, under the terms of the employment agreement, earned the commissions alleged in the complaint (see Van Etten Oil Co., Inc. v Aero Star Petroleum, Inc., 131 A.D.3d 740, 741 [2015]). [2]

         We also disagree with defendants' interpretation that plaintiff's right to earn a commission did not vest until a fee was actually collected by WorldClaim. Indeed, Fusco testified that it could take up to 18 months to settle or adjust a claim, meaning that it could take longer for a fee to be received. While plaintiff had an interest in a client's claim being settled or adjusted so that a fee could be collected, which, in turn, would lead to the payment of a commission, plaintiff testified that "[his] job wasn't to collect the money for WorldClaim." Additionally, if WorldClaim required the assistance of another employee to collect a fee, plaintiff would not lose the commission; rather, plaintiff's share could decrease. Accordingly, even though a commission could not be practically paid until the fee was received by WorldClaim, such payment had no bearing on whether plaintiff earned a commission in the first instance (see Gold v Benefit Plan Adm'rs, 233 A.D.2d at 421).

         As to plaintiff's claim for unpaid bonuses, we conclude that an issue of fact exists regarding whether the bonuses were discretionary or part of plaintiff's compensation (see Doolittle v Nixon Peabody LLP, 126 A.D.3d 1519, 1520 [2015]; Mirchel v RMJ Sec. Corp., 205 A.D.2d 388, 389-390 [1994]; compare De Madariaga v Union Bancaire Privée, 103 A.D.3d 591, 591 [2013], lv denied21 N.Y.3d 854');">21 N.Y.3d 854 [2013]). Here, a 2011 addendum to the employment agreement provided that plaintiff would "have an opportunity to earn a bonus" when certain thresholds were met. The 2011 addendum, however, also stated that, "[a]t the end of each month, depending on the loss projections it will be determined if the month qualifies for the bonus incentive. A bonus will be paid when the claims signed in the qualified month are all paid in full or at least when the total paid on fees to WorldClaim reaches the agreed upon figure." In view of the mandatory language that plaintiff "will" receive a bonus depending on the fulfillment of certain thresholds and plaintiff's testimony that a bonus would be paid if a certain amount of losses were signed in a particular month, summary judgment was properly denied with respect to plaintiff's ...

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