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Jeffrey T. PRICE, Plaintiff, v. TUNECORE, INC., Defendant.
This is an action for breach of contract in which plaintiff Jeffrey T. Price, the founder and former CEO and president of defendant Tunecore, Inc. (TuneCore or defendant), a music technology business, seeks the recovery of unpaid wages and benefits. On July 20, 2012, defendant terminated the at-will employment of plaintiff.
Motion sequence nos. 003 and 004 are consolidated for disposition. In motion sequence no. 003, defendant moves, pursuant to CPLR 3212, for summary judgment dismissing the second and seventh causes of action of the complaint, plaintiff's two remaining causes of action.
In motion sequence no. 004, plaintiff moves for summary judgment on the second and seventh causes of action, and on claims for quantum meruit and unjust enrichment arising under the complaint.
For the reasons set forth below, defendant's motion for summary judgment is granted, and the remaining causes of action in the complaint are dismissed. Plaintiff's motion for summary judgment is denied.
Plaintiff and defendant are parties to an Employment Agreement dated December 7, 2006 (see Employment Agreement, § 1 [aff of Daniel J. Franklin, exhibit A] ). The Employment Agreement contained a three-year “Employment Term” that ended on December 7, 2009. Thereafter, plaintiff continued to be employed by defendant on an at-will basis until July 20, 2012, when defendant terminated his employment.
Plaintiff served the complaint on January 13, 2014, alleging eight causes of action: a claim for reformation of the Employment Agreement, several claims for breach of the Employment Agreement, and several equitable claims in which he sought benefits beyond what the Employment Agreement provided. On May 15, 2014, defendant filed a motion to dismiss all of plaintiff's claims, except for his seventh cause of action, which sought payment for allegedly unused vacation days.
On January 13, 2016, this court entered an order granting defendant's motion to dismiss the complaint (the trial court decision [Franklin aff, exhibit B] ). The court dismissed plaintiff's first cause of action to the extent that it sought reformation of the Employment Agreement because it was barred by the statute of limitations. Although plaintiff submitted an affidavit stating that “I do not recall looking at the contract until at or about the time I was terminated in June of 2012” (Price aff, ¶ 61 [Franklin aff, exhibit C] ), the court concluded that Plaintiff could not show that he “could not with due diligence have discovered any alleged mistake” (trial court decision at 2). Thereafter, the parties stipulated to relief on the remaining portion of the first cause of action, which sought reformation of plaintiff's proprietary information agreement. Accordingly, that claim has been entirely resolved.
The court dismissed plaintiff's second cause of action (which sought an “implied” extension of the three-year term of the Employment Agreement), finding that the language of the agreement itself “wholly refuted the plaintiff's allegations that the contract was renewed and conclusively established that, at the time of his termination, no employment agreement was in effect, and the plaintiff's employment was at will” (id. at 4).
The court dismissed plaintiff's third, sixth and eighth causes of action (which sought twelve months of severance pay, one month of notice pay, and extended COBRA benefits), finding that those benefits only “would have been available to plaintiff had his employment been terminated during [his] employment agreement's three-year term” (id.).
The court also dismissed plaintiff's fourth and fifth causes of action (which alleged quantum meruit and unjust enrichment), finding that those allegations were inconsistent with the terms of plaintiff's Employment Agreement, and that he could not “now use quasi-contract or equitable claims as an end-run around legal claims” (id. at 6).
Plaintiff appealed from the court's order, and in a decision dated January 10, 2017, the Appellate Division, First Department affirmed the court's dismissal of the first, third, fourth, fifth, sixth and eighth causes of action (Price v. Tunecore, Inc., 146 AD3d 474 [1st Dept 2017]). On appeal, plaintiff asserted that his second cause of action contained an entirely separate legal theory that plaintiff had not asserted in the trial court. Specifically, plaintiff argued that his second cause of action alleged a breach of contract based on the fact that two of plaintiff's colleagues had higher salaries than he did. The Court held that plaintiff “sufficiently alleged breach of the employment agreement based on defendant's failure to pay him the highest salary, but only during the period when the employment agreement, by its terms, was in effect, until December 7, 2009” (id.). Thus, the Court permitted plaintiff to pursue that claim to the extent that it sought damages during the three-year Employment Term set forth in the Employment Agreement, but affirmed the dismissal of the claim in all other respects (including both to the extent that it alleged that the Employment Term renewed by operation of law and to the extent that it sought benefits beyond the end of the Employment Term).
As a result, only two claims remain for resolution. First, plaintiff's seventh cause of action, which was not at issue in the motion to dismiss, remains in its entirety. In that cause of action, plaintiff alleges that defendant “breached Section 10 (d) of the Employment Agreement by failing to reimburse Plaintiff for his accrued vacation” (complaint, ¶ 156). Plaintiff further alleges that “Tunecore's policy was to compensate its employees for accrued but unused vacation time” (id., ¶ 157).
Second, defendant's second cause of action remains in part, but only to the extent allowed by the First Department decision. Specifically, defendant's second cause of action remains to the extent that plaintiff alleges a breach of section 3 (a) of the Employment Agreement during the period from December 7, 2006 to December 7, 2009. The second cause of action has been dismissed to the extent that plaintiff has alleged any breach of section 3 (a) after December 7, 2009, and has also been dismissed to the extent that plaintiff alleged that the term of the agreement renewed for successive one-year terms by operation of law.
1. Facts Relating to the Vacation Claim
The Employment Agreement provides that plaintiff would “be entitled to five (5) weeks paid vacation per calendar year, with such vacation to be scheduled and taken in accordance with the Company's standard vacation policies” (Employment Agreement, § 5).
The evidence adduced during discovery reveals that defendant's standard vacation policy through the time of plaintiff's termination in July of 2012 was that vacation could only be taken in the year that it accrued, that it did not carry over from year to year, and that, upon termination, employees would be paid only for unused vacation.
For instance, Scott Ackerman (Ackerman), defendant's chief operating officer at the time of plaintiff's termination in July of 2012, testified that, until that time, defendant's vacation policy was a “[u]se-it-or-lose-it policy for your accrued vacation. If you had not used it during the year, it did not carry over the next year” (Ackerman dep at 13 [Franklin aff, exhibit F] ). He further testified that “all employees were subject to the same identical policy” (id. at 31–32).
Matthew Barrington (Barrington), defendant's vice president of Finance at the time of plaintiff's termination, confirmed that “[t]he policy of TuneCore has—up until 2012 the policy has never had a carryover feature of it” (Barrington dep at 24 [Franklin aff, exhibit G] ). Barrington further testified that “I can speak definitively to the carryover, that we did not allow employees to carry over vacation” (id. at 24–25). That policy existed from 2006 from 2012 (id. at 26–28).
Although TuneCore did not permit the carryover of unused vacation from year to year, TuneCore did pay employees for unused vacation that they accrued during the year of their termination (Ackerman aff, ¶ 3 [“When I was hired by TuneCore in 2010, the Company's standard vacation policy was a ‘use-it-or-lose-it’ policy—i.e., vacation could only be taken in the year that it accrued, it did not carry over from year to year, and upon termination, employees would be paid only for unused vacation time that had accrued during that same year”]; see also Barrington aff, ¶ 3 [same] ).
Plaintiff was paid in accordance with this standard policy. Plaintiff accrued 14 days of vacation during his final year of employment in 2012, and he was paid in full for these days following his termination (Ackerman aff, ¶ 6; Barrington aff, ¶ 6).
2. Facts Relating to the Salary Claim
Section 3 (a) of the Employment Agreement provides that “[u]nless otherwise agreed to by the Executive, the Base Salary paid to the Executive shall at all times be the highest salary paid or payable by the Company to any of its employees” (Employment Agreement, § 3 [a] ).
According to Gill Cogan (Cogan), a member of defendant's Board of Directors (the Board) from 2008 to April 2015, at the time that plaintiff entered into the Employment Agreement in 2006, his base salary of $175,000 per year was the highest of any employee at TuneCore (Cogan aff, ¶ 4). Plaintiff's salary remained the highest of any employee at TuneCore until March of 2009 (id.).
On March 9, 2009, plaintiff recommended to the Board that defendant extend an offer of employment to David Willen, with a base annual salary of $190,000 (Cogan aff, ¶ 3; see also plaintiff's dep at 401–405 [Franklin aff, exhibit H] ). In mid to late 2009, plaintiff recommended to the Board that defendant extend an offer of employment to Lisa Barbanti, with an annual salary of $250,000 (Cogan aff, ¶ 6; see also plaintiff's dep at 407–411). The Board accepted plaintiff's recommendation, and voted to extend offers of employment to both individuals (Cogan aff, ¶¶ 3, 7).
It is undisputed that plaintiff continued to be paid a base salary of $175,000 after Willen and Barbanti were hired (plaintiff's dep at 429, 454–456). But it is also undisputed that plaintiff agreed to work for a lower base salary than theirs. Plaintiff, who was the CEO and Chairman of the Board, was involved in the Board meetings at which it approved these offers (id. at 467; Cogan aff, ¶¶ 3, 7). Yet plaintiff never raised the issue of his salary with the Board (id. at 469; Cogan aff, ¶¶ 5, 8), never objected to these individuals having a higher salary than his (Cogan aff, ¶¶ 6, 9), and never asked for a raise (id., ¶¶ 5, 8). Moreover, during the remaining three years of his employment, plaintiff never indicated to defendant that any deferred salary was owed to him as a result of the hiring of either Willen or Barbanti at a higher salary level than his (id., ¶ 10). Instead, defendant raised the issue for the first time after his termination, more than three years later.
In 2011, the Board voted to increase plaintiff's base salary to $200,000 per year, effective March 1, 2011 (id., ¶ 11). At no point did plaintiff suggest to Cogan that his base salary should have been higher than $200,000 (id.).
To prevail on a motion for summary judgment, a plaintiff is required only to “ ‘make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact’ ” (Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 49  [citation omitted] ). Where, as here, the evidence negates at least one of the elements of the plaintiff's claim, the burden shifts to the plaintiff to come forward with the evidentiary proof in admissible form sufficient to “ ‘establish the existence of material issues of fact which require a trial of the action’ ” (Vega v. Restani Constr. Corp., 18 NY3d 499, 503 ).
Vacation Pay (Seventh Cause of Action)
The seventh cause of action for vacation pay fails as a matter of law because plaintiff seeks benefits that are contrary to the parties' agreement.
“It is axiomatic that an employee has no inherent right to paid vacation and sick days, or payment for unused vacation and sick days, in the absence of an agreement, either express or implied” (Sosnowy v. A. Perri Farms, Inc., 764 F Supp 2d 457, 475 [ED NY 2011]). Thus, “[t]he determination as to whether a former employee is entitled to be paid for accrued vacation time is governed by the contract between the parties” (Steinmetz v. Attentive Care, Inc., 39 Misc 3d 148[A], 2013 NY Slip Op 50905[U], *2 [App Term, 2d Dept, 9th & 10th Jud Dists 2013]; accord Kolesnikow v. Hudson Valley Hosp. Ctr., 622 F Supp 2d 98, 120 [SD NY 2009] [citation omitted] [“ ‘(a)n employee's entitlement to receive payment for accrued, unused, paid time off upon termination of employment is governed by the terms of the employer's publicized policy”]; see also Crawford v. Coram Fire Dist., 2015 WL 10044273, *5, 2015 US Dist LEXIS 57997, *14–15 [ED NY 2015]).
“The plaintiff bears the burden of proving an entitlement to receive payment in lieu of accrued vacation time” (Steinmetz, 39 Misc 3d 148[A] at *2). “Accordingly, a plaintiff claiming that she is owed accrued vacation time under the [New York Labor Law] must plead the existence of an agreement entitling her to vacation pay upon termination” (Litras v. PVM Intl. Corp., 2013 WL 4118482, *10, 2013 US Dist LEXIS 116236, *32 [ED NY 2013]).
Although plaintiff pleads the existence of such an agreement here, in fact, the evidence submitted by the parties demonstrates that the actual agreement is to the contrary.
The Employment Agreement provided that plaintiff would receive vacation time “in accordance with the Company's standard vacation policies” (Employment Agreement, § 5). Defendant's standard vacation policy was that, although unused vacation did not carry over from year to year, employees would be paid for unused vacation that accrued in the year that their employment ended (see Ackerman dep at 31; plaintiff's dep at 24–27; Ackerman aff, ¶¶ 3–5; Barrington aff, ¶¶ 3–5). It is undisputed that plaintiff was paid in accordance with that policy. Specifically, plaintiff accrued 14 days of vacation in 2012 prior to his termination, and he was paid in full for each of those days (Ackerman aff, ¶ 6; Barrington aff, ¶ 6).
In Crawford, like here, the defendant had a written policy providing that “an employee who separates from service ‘shall be compensated for accrued vacation time if due in that year of employment’ ” (Crawford, 2015 WL 10044273 at *5). The court held that, under that policy, “a departing employee would be entitled to payment for any vacation accrued but unused in the last year of employment” (id.). Like plaintiff here, the plaintiffs there asserted a claim for accrued vacation throughout their employment. The court rejected that claim. “Conspicuously absent is clear evidence of a District employee being paid for unused sick time or for vacation time accrued prior to the year of departure” (id. at *6).
Similarly here, defendant's standard practice, in accordance with its vacation policy, was to pay employees only for unused vacation time that accrued during the year that their employment terminated (Ackerman aff, ¶¶ 3–5; Barrington aff, ¶¶ 3–5). Plaintiff does not dispute this, because, as he admits, he does not know if any employees were ever paid for their carryover vacation days. When asked during his deposition if “[d]uring the period you were employed at TuneCore, were there any employees who left the company, either voluntarily or involuntarily, and received payment for unused vacation days from previous years,” plaintiff specifically responded, “I don't know” (plaintiff's dep at 191).
Indeed, during his deposition, plaintiff was unable to identify a single fact supporting his beliefs regarding defendant's vacation policy, even though, as the former CEO of defendant, plaintiff had access to that information at the highest levels. Moreover, plaintiff even participated in at least one termination in circumstances that should have made it clear to him that employees did not carry over vacation time from year to year.
In May of 2012, two months before his own termination, plaintiff signed the termination letter provided to Peter Wells (Wells), another of defendant's founders. Plaintiff's termination letter to Wells states, “Year to date, you have accrued nine days of paid time off and used zero days. You were paid for nine accrued unused paid time off days” (plaintiff's dep at 175–176).
Based on plaintiff's own letter to Wells, plaintiff should have known what defendant's vacation policy was. The only reasonable interpretation of the letter signed by plaintiff is that Wells would only be paid for vacation that he accrued during the year of his termination. And, in fact, as plaintiff admits, Wells was not paid for vacation from prior years (see id. at 170–173).
Plaintiff was also copied on correspondence regarding another employee who was not paid for vacation from prior years (id. at 240–246). As with Wells, the employee was expressly informed that defendant only paid for the vacation time accrued during the final year of employment upon the termination of employment (id.).
Consequently, it is undisputed that defendant's vacation policy was to pay only for unused vacation that accrued during the year that an employee was terminated, and that plaintiff was paid in accordance with that policy. Accordingly, the seventh cause of action fails as a matter of law.
In opposition to the motion, and in support of his own motion for summary judgment, plaintiff fails to raise any material issue of disputed fact. Although plaintiff asserts that defendant's “policy was to compensate its employees for accrued but unused vacation time” (complaint, ¶ 157; see also plaintiff's dep at 192–193 [“every single employee that left the company was paid for accrued vacation days, which included those vacation days that carried over from year to year”), this assertion reflects nothing more than plaintiff's subjective belief that defendant permitted its employees to carry over unused vacation time from year to year. This subjective belief, however, is irrelevant, as plaintiff concedes that the Employment Agreement makes no express reference to the carryover of vacation days (see plaintiff's dep at 78). Plaintiff also concedes that he is unaware of any writing reflecting an alleged company policy permitting the carryover of vacation days (id. at 117–118). In fact, plaintiff testified that the first time he even heard of the term “carryover” was during discovery in this action (id. at 25).
Indeed, when asked if he could “identify [ ] a single employee that was paid for accrued vacation days, including vacation days that carried over from year to year,” plaintiff responded, “I can only speculate” (id.). Plaintiff's speculation that other employees carried over vacation days does not create a disputed issue of fact (see, e.g., Tungsupong v. Bronx–Lebanon Hosp. Ctr., 213 AD2d 236, 238 [1st Dept 1995] [“(r)ank speculation is no substitute for evidentiary proof in admissible form that is required to establish the existence of a material issue of fact and, thus, defeat a motion for summary judgment”] ).
In support of his motion for summary judgment, plaintiff also submits affidavits from TuneCore co-founders Wells and Gian Caterine, who state that, in 2006, the founders agreed that TuneCore's vacation policy was that vacation days could be accrued and carried forward (see Wells aff, ¶ 10; Caterine aff, ¶ 6). However, these after-the-fact affidavits describing what they claim they thought TuneCore's policy was are completely contradicted by the undisputed contemporaneous evidence, as well as the evidence of Ackerman and Barrington, TuneCore's chief operating officer and vice president of Finance, which conclusively demonstrate that departing employees were only entitled to receive payments for vacation days accrued in the year they departed (see D'Amico v. City of NY, 132 F3d 145, 149 [2d Cir 1998], cert denied 524 US 911  [“(t)he non-moving party may not rely on mere conclusory allegations nor speculation, but instead must offer some hard evidence showing that its version of the events is not wholly fanciful”] ).
Because plaintiff has failed to demonstrate that TuneCore's policy and practice was to pay departing employees for unused vacations days from prior years, he has not met his prima facie burden, or created an issue of fact. Accordingly, the seventh cause of action must be dismissed.
Salary (Second Cause of Action )
Plaintiff's second cause of action, for breach of the matching salary provisions, fails as a matter of law because plaintiff consented to defendant's hiring of other employees at higher rates of pay.
Section 3 (a) of the Employment Agreement states that, during the Employment Term, “Unless otherwise agreed to by the Executive, the Base Salary paid to the Executive shall at all times be the highest salary paid or payable by the Company to any of its employees” (Employment Agreement, § 3 [a] [emphasis added] ). It is undisputed that, from March 9, 2009 until the end of the Employment Term on December 9, 2009, plaintiff did not receive the highest salary paid by defendant to any of its employees. But it is also undisputed that plaintiff “otherwise agreed” that other employees could be paid more or, at a minimum, that plaintiff waived his right to enforce that provision. The evidence submitted by defendant reveals that plaintiff was personally involved in the decisions to hire Willen and Barbanti at higher salary rates in 2009, and did not assert any right to have his salary increased until after his termination in 2012. “Contractual rights may be waived if they are knowingly, voluntarily and intentionally abandoned” (Fundamental Portfolio Advisors, Inc. v. Tocqueville Asset Mgt., L.P., 7 NY3d 96, 104 ). “Such abandonment ‘may be established by affirmative conduct or by failure to act so as to evince an intent not to claim a purported advantage’ ” (id. [citation omitted] ).
In Jumax Assoc. v. 350 Cabrini Owners Corp. (46 AD3d 407 [1st Dept 2007], the Court held that the plaintiff waived its right to payments in circumstances not fundamentally dissimilar to those here. In Jumax Assoc., the plaintiff sponsor of a residential cooperative sought income from a license agreement entered into between the defendant residential cooperative and a cellular telephone company, arguing that, based on the 1986 offering plan, it was entitled to proceeds derived from any leasing of the building's roof. The cooperative's license agreement with the cellular telephone company to place antennas on the roof had been entered into in 1995—during which time one of plaintiff's members held a seat on the Board of the cooperative's building association. The plaintiff made no mention of its alleged rights in 1995, and did not commence its action demanding proceeds from the license agreement until 2002.
The Court held that “defendant is entitled to summary judgment dismissing the complaint ․ based on its affirmative defenses of waiver and estoppel” (id. at 408). “In this regard, the record establishes that although plaintiff was represented on defendant's Board, and indeed was in a position of Board leadership, during the time that the ․ license agreement and amendments adding antennas and increasing monthly fees were negotiated, discussed and executed, plaintiff never asserted the roof rights reserved for it in the 1986 offering plan until a February 2002 meeting of the Board” (id.). “As it appears that the offering plan and its amendments were always in plaintiff's possession and thus readily available for plaintiff's consultation and review, we find, as a matter of law, that plaintiff's failure to assert its right to the proceeds of the license agreement evinced a knowing intent not to claim such right” (id.). “Enforcement of the right to the proceeds of the license agreement at this juncture would also work an injustice on defendant, which, justifiably relying on plaintiff's forbearance, has been acting on the reasonable belief that such enforcement would not be sought” (id. at 409).
Likewise, here, plaintiff had a position on the Board—he was the Chairman (see plaintiff's dep at 124–125). Plaintiff knew at the time that the Board was considering making offers to Willen and Barbanti that they would be receiving higher salaries than he would (id. at 397–398, 405–406, 409–410, 413–415). Moreover, plaintiff was involved in the Board's meeting at which it approved those offers (id at 456; Cogan aff, ¶¶ 3, 7). However, plaintiff never raised the issue of his salary being increased with the Board, either at that Board meeting, or any other Board meeting (plaintiff's dep at 464). Plaintiff continued working for defendant at the same salary throughout the duration of his contractual term of employment until December of 2009, and for more than one year thereafter as an at-will employee (id. at 429, 454–456; Ackerman aff, ¶ 9; Barrington aff, ¶ 9; Cogan aff, ¶ 11). The Board increased plaintiff's salary to $200,000, effective March 1, 2011, and his salary remained unchanged until his termination in July of 2012 (Ackerman aff, ¶ 9; Barrington aff, ¶ 9; Cogan aff, ¶ 11).
Plaintiff never indicated that defendant owed him deferred compensation for failing to pay him the highest salary as a result of the hiring of Willen or Barbanti (plaintiff's dep at 429; Ackerman aff, ¶ 8; Barrington aff, ¶ 8; Cogan aff, ¶ 10). Indeed, plaintiff did not demand a retroactive increase to his salary to match what Willen and Barbanti received until this action was filed, fourteen months after he was terminated, and four years after the hiring of Willen and Barbanti. Like the plaintiff in Jumax Assoc., plaintiff's Employment Agreement was “always in plaintiff's possession and thus readily available for plaintiff's consultation and review” and “plaintiff's failure to assert [his] right to [be the highest paid employee] evinced a knowing intent not to claim such right” (Jumax Assoc., 46 AD3d at 408; see also Glassman v. Lear Publ., 221 AD2d 180, 181 [1st Dept 1995] [where plaintiff was “given the option of leaving with a full severance package, or staying on at his original salary, and he elected to stay,” the court held that the plaintiff waived any right to a higher salary, given that the “plaintiff did not raise the salary increase issue again until his employment was terminated two years later]”).
The evidence here is undisputed that plaintiff accepted a lower salary without objection throughout his employment, and that he asserted a right to be paid more only after he was terminated, years later. Accordingly, this court finds that plaintiff has affirmatively waived the right to be paid a higher salary, and is estopped from asserting it now (see Fundamental Portfolio Advisors, 7 NY3d at 104; see also Empire Fin. Servs., Inc. v. Bellantoni, 53 AD3d 1095, 1096 [4th Dept 2008]; International Shared Servs., Inc. v. McCoy, 259 AD2d 668, 669 [2d Dept 1999]).
Although plaintiff asserts that two members of the Board told him that he would receive a higher salary (plaintiff's dep at 417–419), this fails to raise an issue of fact. This assertion, even if true, is irrelevant, as the members of a company's board of directors, acting alone, have no authority to bind the company. “It is the board, not the directors acting individually, who are vested with broad power to determine corporate policy and conduct corporate activities” (People v. Rondon, 109 Misc 2d 394, 399 [Sup Ct, NY County 1981]). “[T]he acts of the individual board members have no consequence except to the extent that they cast votes in furtherance of the corporate purpose” (DeWald v. Amsterdam Hous. Auth., 823 F Supp 94, 102 [ND NY 1993]; 100 Wooster Store Corp. v. Wooster 100 Realty Ltd., 2012 NY Slip Op 30334[U] [Sup Ct, NY County 2012] [“(a)cts done informally by a member of the Board do not constitute Board action”] ). Thus, plaintiff cannot create a triable issue of fact based on the statements of the individual board members. Indeed, plaintiff concedes that these conversations do not constitute binding action by the Board (see opposition mem at 17).
In opposition to the motion, plaintiff also asserts a new claim that he did not allege in his complaint, and which plaintiff claims prevents the grant of summary judgment. Plaintiff argues that his income tax records show that he did not receive an annual salary of $175,000 during the term of his Employment Agreement. According to plaintiff, these records reveal that he was paid a total of $499,132, but was supposed to be paid $525,000. Plaintiff argues that he is entitled to back wages in the amount of $25,868 that were not paid to him in accordance with the terms of the Employment Agreement, plus interest (see opposition mem at 12–13). However, this claim does not bar summary judgment on the second cause of action.
Plaintiff's assertion that he was paid less than the base salary specified in his Employment Agreement is fundamentally different than the claim in his second cause of action that he was paid less than other TuneCore employees. The Employment Agreement provided in the first sentence of § 3 (a) that he would be paid a base salary of $175,000. The Employment Agreement further provided, in the fifth sentence of § 3 (a), that plaintiff was entitled to be the highest-paid employee at TuneCore, unless he agreed otherwise (id.). Plaintiff's second cause of action alleges a breach of the latter of those provisions, but not the former. Specifically, the second cause of action alleges that plaintiff had a contractual right to be the highest paid executive at TuneCore (complaint, ¶ 128), that he was not the highest paid (id., ¶ 129), that he did not agree to permit other executives to be higher paid (id., ¶ 130), and that TuneCore breached the agreement by failing to pay plaintiff the highest salary (id., ¶ 131). However, plaintiff does not allege, either in the second cause of action or anywhere in the complaint, that defendant failed to pay him the $175,000 base salary specified by the Employment Agreement.
A plaintiff cannot allege a new cause of action based on new facts on summary judgment (see, e.g., 721 Fruit & V. Mkt., Inc. v. Stavia LLC, 114 AD3d 481, 482 [1st Dept 2014] [“the court properly dismissed tenant's claims ․ which were raised for the first time in tenant's opposition/cross motion for partial summary judgment”]; Encarnacion v Manhattan Powell, 258 AD2d 339, 340 [1st Dept 1999] [“(t)he IAS Court properly denied the (summary judgment) motion because it was based upon a claim not alleged in the third-party complaint”] ).
Yet plaintiff attempts to do precisely that—he seeks summary judgment in his favor on an entirely new claim, not made in his complaint, of previously undisclosed allegations based on five pages of tax documents that he never produced in this litigation.
Accordingly, plaintiff's assertion that he was paid less than the $175,000 base salary specified by his contract does not prevent summary judgment on the second cause of action.
Quantum Meruit and Unjust Enrichment (Fourth and Fifth Causes of Action)
In his motion for summary judgment, plaintiff also attempts to resurrect his fourth and fifth causes of action for quantum meruit and unjust enrichment. However, those causes of action are no longer at issue in this action because they were dismissed by this court, and their dismissal was affirmed by the First Department (see trial court decision at 6 [“The fourth and fifth causes of action ․ cannot stand”] Price, 146 AD3d 474 [affirming dismissal of quantum meruit and unjust enrichment claims] ).
Plaintiff cannot obtain summary judgment in his favor on claims that were already decided against him. Where a legal issue was necessarily resolved on the merits in a prior decision, the court's decision on that issue becomes the law of the case, precluding further litigation of that issue (see Thompson v. Cooper, 24 AD3d 203, 205 [1st Dept 2005]; Holloway v. Cha Cha Laundry, 97 AD2d 385, 386 [1st Dept 1983] [“once an issue is judicially determined, either directly or by implication, it is not to be reconsidered by Judges or courts of co-ordinate jurisdiction in the course of the same litigation”]; see also Hass & Gottlieb v. Sook Hi Lee, 11 AD3d 230, 231 [1st Dept 2004]). “An appellate court's resolution of an issue on a prior appeal constitutes the law of the case and is binding on the Supreme Court, as well as on the appellate court” (Carmona v Mathisson, 92 AD3d 492, 492 [1st Dept 2012] [internal quotation marks and citation omitted] ).
Thus, the First Department's decision affirming this court's dismissal of plaintiff's quantum meruit and unjust enrichment claims is conclusive. Plaintiff's only relief from that decision would have been to seek reconsideration—which he did, unsuccessfully (see aff of John Carlson, exhibit E).
The court has considered the remaining arguments, and finds them to be without merit.
Accordingly, it is
ORDERED that defendant's motion for summary judgment dismissing the remaining second and seventh causes of action of the complaint (motion sequence no. 003) is granted, and these causes of action are dismissed with costs and disbursements to defendants as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further
ORDERED plaintiff's motion for summary judgment (motion sequence no. 004) is denied; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.
Robert R. Reed, J.
Response sent, thank you
Docket No: 653194/13
Decided: March 27, 2018
Court: Supreme Court, New York County, New York.
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