JAIN v. PRUTECH SOLUTIONS INC (2023)

This is an action on an alleged oral contract. Plaintiff, Vinay Jain, is seeking a $333,333 finder's fee from defendant, PruTech Solutions Inc., based on his claim that he helped defendant obtain a $2.9 million contract that netted it approximately $1 million in profits. On a prior motion, this court granted defendant's unopposed motion to dismiss the action under the statute of frauds. (See NYSCEF No. 11.) Plaintiff now moves to vacate the dismissal of his action under CPLR 5015. The motion is denied. Even assuming that the absence of opposition to defendant's dismissal motion stemmed from excusable law-office failure, as plaintiff contends (see NYSCEF No. 14 at ¶¶ 3-12, 22-23), plaintiff has not shown a potentially meritorious claim.

General Obligations Law (GOL) § 5-701 (a) (10) provides that an oral agreement is void if it is a “contract to pay compensation for services rendered in negotiating ․ a business opportunity.”¹ As plaintiff candidly concedes (see NYSCEF No. 14 at ¶ 35), this provision of the GOL voids oral finder's-fee agreements. (See Kelly v P & G Ventures 1, LLC, 148 AD3d 1002, 1003-1004 [2d Dept 2017]; Stone Capital Advisors, LLC v Fortrend Intl., LLC, 15 AD3d 300, 301 [1st Dept 2005].) Plaintiff contends, nonetheless, that “the agreement alleged here is enforceable because defendant admitted its existence․ [W]hen they agreed to pay Plaintiff.” (NYSCEF No. 14 at ¶¶ 35-36.) This court is not persuaded.²

Plaintiff's motion to vacate relies on two paragraphs of his complaint to establish that defendant admitted the existence of an agreement between them. (See id. at ¶ 36 [citing NYSCEF No. 2 at ¶¶ 6, 10.) Paragraph 6 states only that defendant's CEO “promised that [plaintiff] would be paid for” the work that he would be doing on defendant's behalf. (NYSCEF No. 2 at ¶ 6.) But a promise of payment in exchange for work is simply the alleged oral agreement itself, not a later admission that the agreement existed.

Plaintiff also relies on ¶ 10 of the complaint. That paragraph alleges in conclusory fashion that although an unnamed representative of defendant “admitted that [plaintiff] should be paid,” that person “insisted that [plaintiff] should be paid by another company, even though [plaintiff] did not have an agreement with that other company.” (Id. at ¶ 10.) The complaint does not identify who made this alleged statement (or when), indicate whether the exchange occurred orally or in writing, or attach any written materials that might put in context the statement on which plaintiff relies. As pleaded, this paragraph establishes for pleading purposes that defendant's representative had conceded that plaintiff had performed services for which he should be paid. That is different, however, from a concession that defendant had previously committed itself to pay plaintiff for those services—particularly given defendant's alleged suggestion that it was instead an (unnamed) third-party entity that had the obligation to pay plaintiff. Given the large dollar value of the underlying business transaction at issue—and thus of plaintiff's claimed finder's fee—this court declines to hold that the vague and equivocal statement described in ¶ 10 constitutes a binding admission of the existence of a contract between the parties.

Accordingly, it is

ORDERED that plaintiff's motion to vacate this court's dismissal order entered January 27, 2022, is denied; and it is further

ORDERED that defendant serve on plaintiff a copy of this order with notice of its entry.

FOOTNOTES

1.   Paragraph 10 creates an exception to this oral-contract bar for a “contract to pay compensation to an ․ attorney at law, or a duly licensed real estate broker or real estate salesman.” Plaintiff does not contend that he comes within this exception.

2.   Defendant also contends that plaintiff lacks a potentially meritorious claim because GOL § 5-701 (a) (1) bars the alleged oral contract as not capable of performance within one year. Given the court's conclusion that § 5-701 (a) (10) independently defeats plaintiff's claim, the court does not reach this additional argument for denial of the motion.

Gerald Lebovits, J.