UNGER, BERNARD A. v. GANCI, MICHAEL A. , 25 N.Y.S.3d 498 ( 2016 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
81
CA 15-00820
PRESENT: CENTRA, J.P., PERADOTTO, LINDLEY, DEJOSEPH, AND SCUDDER, JJ.
BERNARD A. UNGER, PLAINTIFF-APPELLANT,
V MEMORANDUM AND ORDER
MICHAEL A. GANCI, DEFENDANT-RESPONDENT.
LAW OFFICES OF GARY R. EBERSOLE, GRAND ISLAND (STEPHEN C. HALPERN OF
COUNSEL), FOR PLAINTIFF-APPELLANT.
LIPPES MATHIAS WEXLER FREIDMAN LLP, BUFFALO (KEVIN BURKE OF COUNSEL),
FOR DEFENDANT-RESPONDENT.
Appeal from an order of the Supreme Court, Erie County (Timothy
J. Drury, J.), entered September 12, 2014. The order granted the
motion of defendant for partial summary judgment on the issue of
liability on his first counterclaim and dismissed the complaint.
It is hereby ORDERED that the order so appealed from is
unanimously reversed on the law, the motion is denied, and the
complaint is reinstated.
Memorandum: Plaintiff commenced this action alleging that
defendant breached an agreement providing, inter alia, that defendant
would pay plaintiff for the “book of business/client list” of
approximately 200 client accounts from plaintiff’s financial services
business, which he sold to defendant because he relocated to Florida
in October 2010. In his answer, defendant asserted nine
counterclaims, including that plaintiff willfully breached the
agreement not to compete with defendant when plaintiff returned to
Western New York and opened a new financial services business in late
2012, and that plaintiff “solicited” business from six of his former
clients. Defendant alleged in the first counterclaim (counterclaim),
which seeks rescission of the agreement, that the “breaches are so
substantial and fundamental that they defeat the object of the
agreement.” Supreme Court granted defendant’s motion seeking partial
summary judgment on the issue of liability on the counterclaim,
rescinded the agreement, and dismissed the complaint. That was error.
The record establishes that, at the time the action was
commenced, plaintiff was handling the financial accounts for six of
his former clients, four of whom were immediate family members and two
of whom were dissatisfied with services provided by defendant.
Plaintiff submitted affidavits from those former clients, who averred
that plaintiff did not solicit their business but, instead, that they
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CA 15-00820
requested that he manage their accounts. The court determined that
plaintiff “took over” those six accounts and that he implied in an
email to defendant that he intended to solicit business from other
former clients, which constituted a material breach of the agreement
warranting rescission.
We conclude that defendant failed to establish his entitlement to
judgment as a matter of law on the counterclaim (see generally
Zuckerman v City of New York, 49 NY2d 557, 562). As a preliminary
matter, “[t]o be entitled to summary judgment, the moving party has
the burden of establishing that its construction of the agreement is
the only construction which can fairly be placed thereon” (Syracuse
Orthopedic Specialists, P.C. v Hootnick, 42 AD3d 890, 891 [internal
quotation marks omitted]), and defendant failed to meet that burden
here. The court rejected defendant’s contention that the agreement
prohibited plaintiff from operating a financial services business in
Western New York, and we note that defendant does not contend on
appeal, as an alternative basis for affirmance, that the court erred
in that determination (see generally Parochial Bus Sys. v Board of
Educ. of City of N.Y., 60 NY2d 539, 545-546). Even assuming,
arguendo, that defendant established that plaintiff breached the
agreement by taking over the financial accounts of six of defendant’s
clients, “ ‘[a]s a general rule, rescission of a contract is permitted
for such a breach as substantially defeats its purpose. It is not
permitted for a slight, casual[] or technical breach, but . . . only
for such as are material and willful, or, if not willful, so
substantial and fundamental as to strongly tend to defeat the object
of the parties in making the contract’ ” (WILJEFF, LLC v United Realty
Mgt. Corp., 82 AD3d 1616, 1617). We conclude that defendant failed to
establish as a matter of law that the alleged breach was material and
willful, or so substantial and fundamental as to strongly tend to
defeat the object of the agreement (cf. id. at 1617-1618).
Entered: February 11, 2016 Frances E. Cafarell
Clerk of the Court