John William Costello Associates, Inc. v. Standard Metals Corp.

OPINION OF THE COURT

Murphy, P. J.

In the first cause of action, plaintiff seeks to recover damages under an oral agreement made with the defendant on or about June 2,1980. Essentially, plaintiff alleged that it revealed the name and qualifications of one George E. Smith to the defendant with the understanding that it would receive 30% of Smith’s total compensation for the first year of his employment if defendant employed him. Plaintiff further alleged that the defendant entered into a written agreement with Smith on or about November 19, 1980. Under that written agreement, Smith was to commence employment on January 1, 1981. He was to receive a base compensation of $100,000 for the first year plus bonuses based on various contingencies set forth in the written employment agreement. For defendant’s purported breach of the oral agreement, plaintiff sought $30,000 in immediate damages and 30% of any additional income that Smith might receive for the first year, of employment. The second cause seeks identical damages upon the theory of account stated.

The first affirmative defense alleges that the complaint does not set forth a claim upon which relief could be granted. In the second affirmative defense, the defendant asserts that the oral agreement was void under section 5-701 (subd a, par 1) of the General Obligations Law. Basically, the defendant contended that the oral agreement could not be performed within a year because Smith’s total compensation for the first year could not be calculated within a year. Hence, plaintiff’s commission of 30% could not be calculated within a year. In its third affirmative defense, defendant alleges that the plaintiff could not recover because it had violated the licensing provisions for an employment agency as mandated by article 11 of the General Business Law.

Plaintiff moved pursuant to CPLR 3211 (subd [b]) and 3212 for an order striking the affirmative defenses and granting it summary judgment. The defendant cross-moved for summary judgment. Special Term (121 Misc 2d 282) found that the oral agreement was performable within a year. It also found that the plaintiff had violated the licensing provisions of article 11 but that it was still entitled to recover a commission. Thus, the court struck the second and third affirmative defenses. However, it denied summary judgment to both sides since issues of fact were presented as to whether (i) the defendant agreed to the payment of the commission and (ii) the secretary to defendant’s president had actual or apparent authority to enter into such an agreement.

While I agree with Special Term that the second and third affirmative defenses should be dismissed, I would go further and grant summary judgment to plaintiff upon the first cause on the issue of liability. The matter should then be remanded for an assessment of damages.

Before analyzing the record, three operative principles should be reaffirmed. First, facts appearing in the movant’s papers, which the opposing party does not controvert, may be deemed to be admitted (Kuehne & Nagel v Baiden, 36 NY2d 539, 544). Second, summary judgment may be awarded to the movant on an unpleaded cause of action if the proof supports such cause and if the opposing party has not been misled to its prejudice (Dampskibsselskabet v Thomas Paper Co., 26 AD2d 347, 352). Third, summary judgment searches the record and may be given to the nonappealing party (Jim, Jack & Joe Realty Corp. v Rothenburg, 78 AD2d 634, 635).

Edward Nottage, plaintiff’s program director, submitted an affidavit in support of plaintiff’s motion for summary judgment. He averred that, on April 2, 1980, he wrote the defendant’s president, Boris Gresov, to advise him of the availability of a client for possible employment with his company. Nottage further stated that, on June 2, 1980, he was telephoned by Gresov’s assistant, Mary Di Rienzo. He allegedly informed Di Rienzo that plaintiff’s fee would be equal to 30% of his client’s compensation during the first year of his employment by the defendant. Nottage continued by stating that he revealed Smith’s identity after Di Rienzo had assured him that she understood and accepted the fee arrangement. In a letter dated June 10, 1980, Nottage offered to arrange a telephone interview between Smith and Di Rienzo. He then turned the file over to Andrew Jank, plaintiff’s marketing director.

Jank submitted his own affidavit in support of the plaintiff’s motion for summary judgment. He alleged that, on August 6, 1980, he telephoned Di Rienzo to renew her interest in Smith. During that call, Jank set up a telephone interview between Smith and Gresov. At that time, he again reiterated plaintiff’s fee requirements, and he was assured by Di Rienzo that she understood and agreed to those requirements. The following day, Jank sent a letter to Di Rienzo. This letter, appearing in the record, reads as follows:

“Dear Ms. DiRienzo:

“We are pleased of your expressed interest in our client, Mr. George Smith. We trust that discussions between your firm and Mr. Smith will be meaningful and productive.

“In the event than [sic] an employment agreement is consummated with George Smith, fees for our services are computed at 30% of the first year’s total compensation. If you have any need for further information about our services, or if I can be helpful to you in any way, please call me at (202) 331-1900.

“Sincerely,

“Andrew Jank

“Marketing Director”

Jank stated that, from August 7,1980 until December 5, 1980, he worked closely with Smith and was in contact with Di Rienzo during the course of the negotiations. On December 15,1980, Jank received from Smith a copy of the employment agreement that had been executed on November 19, 1980. Plaintiff sent invoices for payment on or about December 30, 1980 and February 28, 1981, but payment was not made. In a letter, dated February 28, 1981, Gresov denied that the defendant ever had an agreement to pay plaintiff a fee for Smith’s placement.

Mary Di Rienzo submitted an affidavit in opposition to the motion in chief and in support of the cross motion. To the extent here relevant, Di Rienzo’s affidavit states:

“As Costello admits, Standard Metals never entered into any written agreement with Costello, nor did it sign any writing or memorandum agreeing to those terms.

“3. In papers in support of its motion, Costello alleges that I agreed on behalf of Standard Metals orally to the agreement described in paragraph 2 (Nottage and Yank [sic] affidavits). I emphatically state under oath that I never told Mr. Nottage or Mr. Jank, or indeed anyone affiliated with Costello, that Standard Metals would agree to the terms alleged in the complaint. I never discussed the terms of any alleged agreement between Costello and Standard Metals and I never acquiesced to any such agreement.

“4. Furthermore, I have no authority whatsoever to bind Standard Metals to any such alleged agreement.”

Di Rienzo’s affidavit is particularly noteworthy because she does not deny that she received Jank’s letter of August 7, 1980. Likewise, she does not deny that plaintiff was solely responsible for bringing Smith to the defendant’s attention. The record does not contain any affidavit from Gresov. Upon this state of the evidence, the defendant must be deemed to have admitted that (i) it was fully aware of the terms in the August 7, 1980 letter when Smith was hired and (ii) Smith’s hiring was directly attributable to the services provided by plaintiff.

An offer may be accepted by conduct or acquiescence (Joseph v Atlantic Basin Iron Works, 132 NYS2d 671, 673, affd 285 App Div 1147; Josephine & Anthony Corp. v Horwitz, 58 AD2d 643; Chase Manhattan Bank v Hobbs, 94 Misc 2d 780; see, generally, 21 NY Jur 2d, Contracts, §§ 49-51). Putting aside any factual issue as to whether the parties reached an oral agreement on June 2, 1980, it is clear that Jank’s letter of August 7, 1980 constituted a written offer to the defendant. The defendant never rejected that letter. Instead, the defendant accepted the benefits of the plaintiff’s services. By this conduct, the defendant assented to the terms set forth in the letter of August 7, 1980. The affirmative defense based upon the Statute of Frauds is without merit since the defendant is bound by the terms of the August 7,1980 letter agreement. As set forth in that letter agreement, plaintiff’s fee should be computed at 30% of Smith’s total compensation for the first year’s employment with the defendant.

Accordingly, the first cause should be deemed amended and plaintiff should be given summary judgment upon its written agreement with the defendant and the order of the Supreme Court, New York County (Greenfield, J.), entered January 26, 1983, which dismissed the second and third affirmative defenses but otherwise denied the motion arid cross motion for summary judgment, should be modified, on the law, by granting summary judgment to plaintiff on the issue of liability on the first cause, and remanding the matter for an assessment of damages, and as modified, the order should be affirmed, with costs to plaintiff.