SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
372
CA 14-01089
PRESENT: CENTRA, J.P., PERADOTTO, LINDLEY, AND DEJOSEPH, JJ.
NOAH DOOLITTLE, PLAINTIFF-APPELLANT,
V MEMORANDUM AND ORDER
NIXON PEABODY LLP, DEFENDANT-RESPONDENT.
THOMAS & SOLOMON LLP, ROCHESTER (J. NELSON THOMAS OF COUNSEL), FOR
PLAINTIFF-APPELLANT.
THE WOLFORD LAW FIRM LLP, ROCHESTER (MICHAEL R. WOLFORD OF COUNSEL),
FOR DEFENDANT-RESPONDENT.
Appeal from a judgment and order (one paper) of the Supreme
Court, Monroe County (Matthew A. Rosenbaum, J.), entered February 12,
2014. The judgment and order, insofar as appealed from, dismissed
plaintiff’s first, second, sixth and seventh causes of action upon
defendant’s motion for summary judgment.
It is hereby ORDERED that the judgment and order insofar as
appealed from is unanimously reversed on the law without costs, the
motion is denied with respect to the first, second, sixth, and seventh
causes of action, and those causes of action are reinstated.
Memorandum: Plaintiff, a former associate attorney in
defendant’s Rochester office, commenced this action seeking to recover
a bonus that he allegedly earned during his employment with defendant.
Plaintiff alleges that, during the course of his employment, various
partners advised him and other associates that defendant would pay a
bonus consisting of 5% of its annual fee collections in excess of
$100,000 from any client generated by the associate (hereafter,
collections bonus). In 2005, plaintiff generated a new client for
defendant, and in August 2008 an award was issued in favor of the
client in the amount of $19 million. In September 2008, plaintiff
left defendant’s employ for a new job. Plaintiff alleges that one of
defendant’s partners assured plaintiff that he would receive a
collections bonus with respect to the client even if he terminated his
employment with defendant. In November 2008, defendant collected a
contingency fee of $5 million from the client. Defendant, however,
did not pay plaintiff a 5% collections bonus in connection with that
fee. Instead, in April 2009, defendant paid plaintiff a significantly
smaller “team bonus” for his work on the matter. Supreme Court
granted defendant’s motion for summary judgment dismissing the
complaint, concluding that collections bonuses were discretionary in
nature.
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CA 14-01089
We note at the outset that plaintiff has not briefed any issues
related to the fraud and deceit, misrepresentation, or unjust
enrichment/restitution causes of action and therefore has abandoned
any such issues (see generally Route 104 & Rte. 21 Dev., Inc. v
Chevron U.S.A., Inc., 96 AD3d 1491, 1492; Ciesinski v Town of Aurora,
202 AD2d 984, 984). We conclude that the court erred in granting
those parts of the motion seeking summary judgment dismissing the
remaining causes of action, i.e., the Labor Law, breach of contract,
promissory estoppel, and quantum meruit causes of action. “An
employee’s entitlement to a bonus is governed by the terms of the
employer’s bonus plan” (Hall v United Parcel Serv. of Am., 76 NY2d 27,
36, rearg denied 76 NY2d 889), and “a plaintiff cannot recover under
New York law for breach of contract due to his employer’s failure to
pay him compensation pursuant to a plan, where the plan vests the
employer with absolute discretion as to the entitlement and amount of
any payments thereunder” (Culver v Merrill Lynch & Co., Inc., 1995 WL
422203, *3 [SD NY]; see Gruber v J.W.E. Silk, Inc., 52 AD3d 339, 340).
However, New York also has “a long-standing policy against forfeiture
of earned wages” (Gruber, 52 AD3d at 340), which may apply to bonuses
as well (see Arbeeny v Kennedy Exec. Search, Inc., 71 AD3d 177, 182).
Thus, unless an employer “clearly indicate[s] that bonuses are
discretionary” (Ryan v Kellogg Partners Inst. Servs., 79 AD3d 447,
448, affd 19 NY3d 1; see Kaplan v Capital Co. of Am., 298 AD2d 110,
111, lv denied 99 NY2d 510), the issue “whether unpaid incentive
compensation under a defendant’s bonus plan constitutes a
discretionary bonus or earned wages not subject to forfeiture is [one]
of fact” (Mirchel v RMJ Sec. Corp., 205 AD2d 388, 389 [internal
quotation marks omitted]).
Here, we agree with plaintiff that defendant failed to establish
as a matter of law that the collections bonuses were “solely and
completely a matter of defendant’s discretion” (Hunter v Deutsche Bank
AG, N.Y. Branch, 56 AD3d 274, 275). In support of the motion,
defendant submitted the deposition testimony of the partner
responsible for managing the firm’s bonus programs, who testified
that, although defendant had a “practice” of paying collections
bonuses, the bonuses were discretionary. Defendant also submitted its
responses to plaintiff’s interrogatories, in which it stated that “the
bonus amount based on collections was at all times discretionary, and
was not a required 5% of collections.” According to defendant, the
“discretionary bonuses for collections” were based on a variety of
factors, including the realization rate for the collection, the
associate’s total compensation, input from the associate’s practice
group leader, the nature of the associate’s efforts to generate
business, and budgetary concerns. Defendant, however, also submitted
plaintiff’s deposition testimony, in which he testified that he was
never told that the collections bonus was discretionary. That
conflicting testimony raises an issue of fact whether the collection
bonuses were discretionary (see Gruber, 52 AD3d at 340; Mirchel, 205
AD2d at 389-390; Weiner v Diebold Group, 173 AD2d 166, 167) and,
indeed, the court so found.
The court concluded, however, that defendant established that the
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CA 14-01089
collections bonuses were discretionary based upon defendant’s
submissions showing the history of associate collections bonuses from
2004 to 2008. Contrary to the court’s determination, defendant’s past
practice with respect to collections bonuses is not dispositive of
plaintiff’s breach of contract cause of action. It is well
established that “the existence of a binding contract is not dependent
on the subjective intent” of the parties (Brown Bros. Elec. Contrs. v
Beam Constr. Corp., 41 NY2d 397, 399). Rather, “[i]n determining
whether the parties entered into a contractual agreement and what were
its terms, it is necessary to look . . . to the objective
manifestations of the intent of the parties as gathered by their
expressed words and deeds” (id. [emphasis added]). With respect to
incentive compensation in particular, an employer must “clearly
state[]” that a bonus is “purely discretionary” (Kaplan, 298 AD2d at
111; see Ryan, 79 AD3d at 448), and “discretion will not be implied
when such language is absent” (Canet v Gooch Ware Travelstead, 917 F
Supp 969, 985-986). Thus, the relevant question is not whether
defendant actually awarded associates precisely 5% of collections over
$100,000, but whether defendant promised plaintiff that amount,
particularly given the undisputed fact that plaintiff was unaware of
defendant’s past practice at the time of the alleged oral agreement.
The partner in charge of the bonus program testified at his deposition
that, whenever he spoke to associates about the collections bonus, he
would “always” state that it was discretionary and that, “[i]f [he]
talked about a specific percentage, . . . [he] would say it could be
up to five percent, but taking into consideration . . . other
factors.” Plaintiff, however, averred that the partner told
associates at a meeting in defendant’s Rochester office that defendant
“would pay an associate 5% of defendant’s annual fee collections from
any client generated by that associate if defendant’s annual fee
collections from that client exceeded $100,000” (emphasis added).
According to plaintiff, the partner never stated that the collections
bonus was discretionary, and plaintiff never heard anyone else state
that the bonus was discretionary during his employment with defendant.
We thus conclude that, given the conflicting evidence and testimony
concerning the nature of the collections bonus and how it was
presented to defendant’s employees, including plaintiff, summary
judgment on the breach of contract cause of action was inappropriate
(see Pyramid Brokerage Co., Inc. v Zurich Am. Ins. Co., 71 AD3d 1386,
1387; Easton Telecom Servs., LLC v Global Crossing Bandwith, Inc., 62
AD3d 1235, 1237; Gruber, 52 AD3d at 340; Mirchel, 205 AD2d at 389-
390). For the same reason, the Labor Law, promissory estoppel, and
quantum meruit causes of action should not have been dismissed (see
Mirchel, 205 AD2d at 389-390; cf. De Madariaga v Union Bancaire
Privée, 103 AD3d 591, 591, lv denied 21 NY3d 854).
We have reviewed defendant’s alternative grounds for affirmance
(see generally Parochial Bus. Sys. v Board of Educ. of City of N.Y.,
60 NY2d 539, 545-546), and we conclude that they lack merit.
Entered: March 27, 2015 Frances E. Cafarell
Clerk of the Court