Denise A. Rubin, Plaintiff-Respondent-Appellant,
Napoli Bern Ripka Shkolnik, LLP, et al., Defendants-Appellants-Respondents, Paul J. Napoli, Defendant.
Ropers, Majeski, Kohn & Bentley, LLP, New York (Kirsten
L. Molloy of counsel), for appellants-respondents.
Solotaroff & Anderson LLP, New York (Jason L. Solotaroff
of counsel), for respondent-appellant.
Renwick, J.P., Kapnick, Mazzarelli, Webber, JJ.
Supreme Court, New York County (Paul A. Goetz, J.), entered
October 30, 2018, which, to the extent appealed from as
limited by the briefs, denied defendants Napoli Bern Ripka
Shkolnik, LLP, Worby Groner Edelman & Napoli Bern, LLP,
and Napoli Bern & Associates, LLP's motion for
summary judgment on their counterclaim against plaintiff for
breach of an employment agreement entitling them to
liquidated damages, and granted defendants' motion for
summary judgment dismissing plaintiff's second cause of
action for breach of contract regarding an unpaid bonus,
unanimously modified, on the law, to the extent of
reinstating plaintiff's second cause of action, and
otherwise affirmed, without costs.
firm defendants established as a matter of law that plaintiff
violated the confidentiality provision of her employment
agreement when she filed four confidential documents - three
email chains discussing client and law firm business issues
and a written audit report of the firms' policies and
procedures prepared by another law firm - on NYSCEF (New York
State Courts Electronic Filing), making them publicly
available. At the time of the filing, plaintiff was an
attorney licensed in New York and was represented by counsel.
Accordingly, under the circumstances, her actions qualified
as "knowing, intentional or willful" and
triggered the liquidated damages provision of her employment
agreement. However, on this record, defendants did not make a
prima facie showing of entitlement to those damages.
damages constitute the compensation which, the parties have
agreed, should be paid in order to satisfy any loss or injury
flowing from a breach of their contract" (Truck
Rent- A-Ctr. v Puritan Farms 2nd, 41 N.Y.2d 420, 423-424
). "A contractual provision fixing damages in the
event of breach will be sustained if the amount liquidated
bears a reasonable proportion to the probable loss and the
amount of actual loss is incapable or difficult of precise
estimation. If, however, the amount fixed is plainly or
grossly disproportionate to the probable loss, the provision
calls for a penalty and will not be enforced"
(id. at 425). Although the party challenging the
liquidated damages provision has the burden to prove that the
liquidated damages are, in fact, an unenforceable penalty
(see JMD Holding Corp. v Congress Fin. Corp., 4
N.Y.3d 373, 380 ; Parker v Parker, 163 A.D.3d
405, 406 [1st Dept 2018]), the party seeking to enforce the
provision must necessarily have been damaged in order for the
provision to apply (see e.g. J. Weinstein & Sons,
Inc. v City of New York, 264 A.D. 398, 400 [1st Dept
1942] ["The proof establishes that no claims were made
against defendant and that defendant suffered no financial
damage whatsoever."], aff'd 289 NY 741
). Here, defendants did not identify to the motion
court any damages that they sustained as a result of
plaintiff's breach of the agreement.
second cause of action alleged that, in 2013, plaintiff and
the law firm defendants agreed that in exchange for her
continued employment, she would be paid 5% of all the
firms' net attorney's fees recovered in matters to
which she was assigned or "materially involved,"
and she was not paid the full amount she claims she was owed.
The law firm defendants met their burden on summary judgment
by providing plaintiff's employment agreement which did
not include any reference to a 5% nondiscretionary bonus, and
which included a general merger clause requiring any
modification to be in writing. However, plaintiff raised a
triable issue of fact as to this claim. Specifically, in
Rose v Spa Realty Assoc. (42 N.Y.2d 338, 343-344
), the Court of Appeals held that while generally an
oral modification may not be enforced in light of a merger
clause, an oral modification may be enforced if there is
partial performance that is "unequivocally referable to
the oral modification" or if one party "induced
another's significant and substantial reliance upon an
oral modification." Here, plaintiff averred that she was
promised the 5% bonus and the law firm defendants partially
performed by paying her this bonus on at least five separate
occasions. As the law firm defendants sought summary
judgment, this Court is obligated to view the evidence in the
light most favorable to plaintiff and to accept
plaintiff's evidence "as true" (Aguilar v
City of New York, ...