Opinion
603388/06.
Decided May 23, 2008.
Plaintiff was represented by Dreier LLP, 499 Park Avenue, New York, NY 10022, (212) 328-6100, Jeffrey A. Mitchell, Esq.
Defendant was self-represented, Blank Rome LLP, 405 Lexington Avenue, New York, NY 10174, (212) 885-5000, Harris N. Cogan, Esq.
Plaintiff Mark Bruce International, Inc. (MBI) brings this action to recover a merger fee that defendant Blank Rome LLP (Blank Rome) allegedly agreed to pay. The fee was claimed to be payable in the event that Blank Rome consummated a merger with the law firm of Healy Baillie LLP (H B).
MBI now moves for summary judgment on its two causes of action for breach of contract and unjust enrichment, in the amount of $720,930.70, CPLR 3212 (a). In the alternative, MBI moves for summary judgment on the issue of liability, and for an expedited trial as to damages, CPLR 3213 (c).
Blank Rome cross-moves for summary judgment dismissing the complaint.
BACKGROUND
The following facts are not in dispute.
MBI is a legal recruiting and attorney placement firm. Among its services, MBI identifies potential candidates for law firm mergers.
On October 12, 2005, Robert Lehrman, Esq., MBI's Executive Vice-President and General Counsel, sent an unsolicited e-mail to Fred Blume, the Managing Partner and Chief Executive Officer of defendant Blank Rome ( see Lehrman Supporting Aff., Exh. C). In the e-mail, Lehrman inquired whether Blank Rome might be interested in hearing about a maritime law and insurance litigation firm that was looking to merge with a national firm ( id.). Lehrman stated that he represented the potential candidate, which was headquartered in New York ( id.).
On November 2, 2005, after Blank Rome had indicated its interest in learning of the candidate, Lehrman e-mailed David F. Girard-diCarlo, the Chairman of Blank Rome, proposing the following terms before divulging the name of the candidate:
As we discussed, you agree on behalf of Blank Rome LLP, that if you or a representative appointed by you, meet with the chairman of a merger prospect introduced to Blank Rome LLP by Mark Bruce International, Inc. ("MBI"), to discuss a potential merger, and Blank Rome LLP consummates a merger with such merger prospect, Blank Rome LLP will pay to MBI a merger fee that shall be reasonably determined by Blank Rome LLP and MBI in accordance with market standards, at a mutually agreeable time following the introduction of such merger prospect to Blank Rome LLP by MBI
( id., Exh. E). In a reply e-mail, Girard-diCarlo suggested the following in lieu of the language in that e-mail:
As we discussed, I agree on behalf of Blank Rome LLP that if I or a representative appointed by me, meet with the chairman of the specific merger prospect you reviewed with me to discuss a potential combination, and Blank Rome LLP consummates a combination with that specific prospect, Blank Rome LLP will pay to [MBI] a merger fee that shall be reasonably determined between Blank Rome LLP and MBI, which payment will be made at a mutually agreeable time following the consummation of such combination
( id., Exh. F [emphasis in original]).
Lehrman e-mailed Girard-diCarlo that the amended language was acceptable to MBI, and identified the merger candidate as H B (Lehrman Aff., Exh. G). He also provided Girard-diCarlo with H B's web address and the name of its chairman, John D. Kimball, and indicated that Girard-diCarlo should let him know if there was any interest in speaking with the firm ( id.).
Girard-diCarlo states in his affidavit, that after learning the name of the firm from Lehrman, he consulted with two of his partners who had joined Blank Rome from another maritime firm with which Blank Rome had recently merged (Girard-diCarlo Aff., ¶ 16). They advised Girard-diCarlo that H B would not be a good fit ( id.; see also Dyer Aff., ¶ 3), after which Blank Rome informed MBI that it would not be pursuing a combination (Girard-diCarlo Aff., ¶ 17). It is undisputed that there was no further contact between Blank Rome and MBI about this matter.
On September 5, 2006, some 10 months after their e-mail exchange, MBI learned, from a press release, that H B was merging with Blank Rome. MBI later learned that Blank Rome had agreed to pay another legal recruiting firm, Major, Lindsey Africa (ML A), a merger fee totaling $720,930.70 for the same transaction. MBI notes that this merger fee was paid by Blank Rome pursuant to a merger agreement that H B had executed with ML A on November 30, 2005, sometime after the above-described e-mail exchange between MBI and Blank Rome.
However, according to Kimball, H B's former chairman, although H B's agreement with ML A may not have been reduced to writing until November 30, 2005, H B actually had entered into that agreement in August of 2005 (Kimball Aff., ¶ 7). Kimball states that, although MBI began approaching H B to discuss a potential merger with certain firms in the summer of 2005, at all times, MBI had been representing the law firms that were interested in seeking a potential merger with H B, and had never represented H B ( id., ¶ 4). To explore other merger opportunities, H B had decided to hire its own placement firm and to begin marketing itself to firms that it wished to target ( id., ¶¶ 4, 9). In August 2005, Kimball met with Janet Markoff, a legal recruiter at ML A with whom H B had good past experiences, and entered into an agreement to utilize ML A's services, on an exclusive basis, to market H B to prospective merger candidates (Kimball Aff., ¶ 7). Among the firms that Kimball specifically asked Markoff to target on H B's behalf was Blank Rome ( id., ¶ 9).
Accordingly, in November 4, 2005, after ML A had conducted an analysis of H B's practice and prepared its marketing materials, Markoff had called Michael Mullman, the Administrative Partner of Blank Rome's New York office, to inquire whether Blank Rome would be interested in a merger with H B (Kimball Aff., ¶¶ 8-9; Mullman Aff., ¶ 2). Markoff e-mailed Mullman a detailed overview of H B a few days later (Mullman Aff., ¶ 3). Kimball states that he only learned that Lehrman had previously contacted Blank Rome after Blank Rome had informed MBI of its lack of interest (Kimball Aff., ¶¶ 5-6; Lehrman Aff., ¶¶ 6-7). Kimball avers that, although the name of Blank Rome had been raised during discussions with Lehrman about firms that might have an interest in H B, H B had never authorized MBI to approach Blank Rome to discuss potential mergers on H B's behalf ( id., ¶ 5; Kimball Reply Aff., ¶ 3-4).
After Mullman received Markoff's information about H B, he, like Girard-diCarlo, consulted with the same two partners in Blank Rome's maritime practice (Mullman Aff., ¶ 3; Dyer Aff., ¶ 4). They again opined that H B would not be a good fit (Mullman Aff., ¶ 5; Dyer Aff., ¶ 4). Mullman subsequently reported Blank Rome's lack of interest to Markoff (Mullman Aff., ¶ 6), who reported it to H B.
Some months later, however, in or around January of 2006, Dyer, one of the Blank Rome partners who had previously been consulted, realized that he had held some misconceptions about H B's practice (Dyer Aff., ¶ 5). Dyer apparently changed his opinion about a possible merger, and called Mullman to recommend pursuing discussions with H B ( id.; Mullman Aff., ¶ 7). Mullman then called Markoff at ML A (Mullman Aff., ¶ 8).
In April 2006, Dyer and Mullman attended a dinner meeting with Kimball to discuss a potential combination; also present at that meeting were Markoff and Lawrence Mullman, a partner of ML A and the brother of Michael Mullman (Kimball Aff., ¶ 11; Mullman Aff., ¶ 9; Dyer Aff., ¶ 6). After additional meetings and the conduct of due diligence, which was coordinated through ML A, the Partner Board at Blank Rome approved a combination with H B on August 18, 2006 (Kimball Aff., ¶¶ 11-12; Mullman Aff., ¶¶ 9-10; Dyer Aff., ¶¶ 6-7). As part of that combination, Blank Rome agreed to assume responsibility for making the payments that H B owed ML A under their written agreement (Kimball Aff., ¶ 13; Mullman Aff., ¶ 11; see also Girard-diCarlo Aff., ¶ 21).
In its memorandum of law, MBI calls attention several times to the fact that Lawrence Mullman, a partner in ML A, is the brother of Michael Mullman, the partner in Blank Rome that Markoff contacted; however, other than its repeated mention of that fact, MBI does not explicitly allege, or argue, that anything inappropriate occurred.
Immediately after learning of the merger, MBI contacted Blank Rome, requesting payment of the fee allegedly due to it under their e-mail agreement. After Blank Rome refused to pay, MBI commenced the instant action on September 26, 2006, asserting causes of action for breach of contract and unjust enrichment. Blank Rome answered, asserting, as affirmative defenses, that there was no agreement with MBI in connection with the introduction of H B to Blank Rome; that MBI has no valid claim for a merger fee because ML A, not MBI, was the sole procuring cause of the merger; and, that any agreement was void because it was fraudulently induced by MBI's false representation that it was authorized to represent H B.
Issue having been joined, both sides now move for summary judgment.
DISCUSSION
A motion for summary judgment will be granted only where the movant has made a prima facie showing of entitlement to judgment as a matter of law by the "tender of evidentiary proof in admissible form" ( Zuckerman v City of New York, 49 NY2d 557, 562), sufficient to demonstrate the absence of material issues of fact ( Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). Once a movant has made such a showing, the party opposing the motion has the burden of producing facts sufficient to raise triable issues of fact ( Zuckerman, 49 NY2d at 562). Since issue finding rather than issue determination is key, summary judgment will not be granted where there is a doubt as to the existence of a triable issue, or where such an issue is even arguable ( Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395).
MBI argues that its motion for summary judgment should be granted, because the November 2, 2005 e-mail exchange between Blank Rome and MBI constitutes a valid and binding contract. It asserts that, under New York law, an agreement need not be formalized in a fully executed written contract to be enforceable. Although no specific price term was set forth in their e-mail exchange, it argues that the term "reasonably determined" fee is definite enough to sustain this contract, because a contract may rely on an objective extrinsic event, condition, or standard to fix the price. MBI contends that, here, the court must, and can, fill in the gaps on what could be considered a reasonable fee, based on the undisputed fact that Blank Rome agreed to pay ML A a merger fee of $720,930.70 for the same transaction. At the very least, MBI argues, this court should award MBI summary judgment on the issue of liability, and a hearing should be held as to what constitutes a "reasonably determined" fee.
MBI additionally argues that the statute of frauds, as found in GOL § 5-701 (a) (10), is no bar to summary judgment, because it does not apply to employment agencies or placement firms, and thus is inapplicable to the contract at issue. It argues that Blank Rome's affirmative defense, that MBI was not the "procuring cause" of the combination, does not preclude the grant of summary judgment, because this doctrine applies predominantly with respect to real estate transactions. MBI argues that, to the extent the doctrine is even applicable to this type of transaction, MBI and Blank Rome had contracted out of this requirement by providing that payment shall be made "if Blank Rome LLP consummates a combination" with the prospect, while making no mention of procuring cause.
Blank Rome opposes MBI's motion, and argues that its cross motion for summary judgment dismissing MBI's claims should be granted, because any agreement between MBI and Blank Rome was fraudulently induced. The claimed fraudulent inducement was MBI's alleged false representation that it was representing H B when it contacted Blank Rome. Blank Rome additionally argues that the parties' November 2, 2005 e-mail exchange is unenforceable as a contract, in that it fails to comport with either of the two threshold requirements of the statute of frauds, requiring that agreements for services rendered in effectuating a merger be in writing and subscribed by the party to be charged. It also argues that the e-mail exchange also fails to satisfy the common-law requirement of definiteness, because it fails to describe any of the services required to be performed by MBI to earn a merger fee, and fails to fix the amount of such fee, or provide any objective means by which such fee could be determined. Blank Rome notes that it expressly made modifications to Lehrman's original fee proposal to make it clear that the parties contemplated a further negotiation of the amount and timing of any fee; thus, the e-mail exchange amounts to no more than an unenforceable agreement to agree. In any event, Blank Rome argues that, dismissal is warranted, as it is undisputed that ML A, and not MBI, was the procuring cause of the combination, and no understanding to opt out of this requirement was manifested in the e-mail exchange at issue.
Insofar as Blank Rome seeks dismissal of the complaint on the ground that any agreement was fraudulently induced by the alleged misrepresentation that MBI "represented" H B, the motion is denied. While it is undisputed that MBI had no formal written contract to represent H B when it contacted Blank Rome, the parties have presented sufficient conflicting accounts as to whether Lehrman was authorized to approach Blank Rome on behalf of H B. Although Kimball avers that he "did not give MBI authority to approach Blank Rome on behalf of H B" (Kimball Reply Aff., ¶ 3), Lehrman avers that he would only have disclosed the name of the target firm "after seeking and receiving permission to do so from Mr. Kimball" (Lehrman Aff., ¶ 8). The parties also present conflicting accounts as to whether it was the custom and practice in the industry to have a formal contract with the merger candidate before approaching an interested firm. As the submissions raise triable issues of fact in these respects, Blank Rome's motion for summary judgment dismissing the complaint on this ground is denied.
GOL § 5-701 (a) (10) requires that every agreement to pay compensation for services rendered in negotiating a business opportunity be (1) in writing and (2) subscribed by the party to be charged therewith ( Parma Tile Mosaic Marble Co., Inc. v Estate of Short, 87 NY2d 524; Stephen Pevner, Inc. v Ensler, 309 AD2d 722 [1st Dept 2003]). Although the statute of frauds does not apply to the services of employment agencies or placement firms with respect to the placement of individuals, it does apply where, as here, the recruiting firm is seeking a fee for services rendered with respect to effecting a merger or combination of two law firms ( see Howard-Sloan Legal Search, Inc. v Todtman, Young, Tunick, Nachamie, Hendler Spizz, P.C., 193 AD2d 404 [1st Dept 1993] [employment recruiting agency's services in effectuating a merger of two law firms was a "business opportunity" as defined by GOL § 5-701 (a) (10)], citing Freedman v Chemical Constr. Corp., 43 NY2d 260; see also Management Recruiters of Boulder v National Economic Research Assoc., Inc., 2006 WL 2109478, *6, 2006 US Dist LEXIS 52076 [SDNY 2006]).
"A subscription requires an act to authenticate the writing as defendant's" ( Parma, 87 NY2d at 525). In addition, "[t]he intent to authenticate the particular writing at issue must be demonstrated" ( id. at 528).
The act of identifying and sending a document to a particular destination does not, by itself, constitute a signing authenticating the contents of the document for Statute of Frauds purposes
( id.).
In Parma, the Court of Appeals held that the automatic imprinting, by a fax machine, of the sender's name at the top of each page transmitted, without regard to the applicability of the statute of frauds to the particular document, did not constitute a signing for statute of frauds purposes, as it lacked the indicia of specific intent to adopt and be bound by the content of the transmission ( id. at 528). However, our courts also have held that the act of manually typing one's name at the end of an e-mail referencing the parties' agreement can constitute a signed writing within the meaning of the statute of frauds, as it is sufficient to signify the writer's intent to authenticate the contents of the e-mail ( see Stevens v Publicis, S.A., ___ AD3d ___, 854 NYS2d 690 {50 AD3d 253} [1st Dept 2008]; see also Rosenfeld v Zerneck , 4 Misc 3d 193 [NY Sup Ct, Kings County 2004]).
Here, the record reflects that Girard-diCarlo's name, title, address, telephone/fax numbers and e-mail address were affixed, as a block, at the bottom of each of his e-mails ( see Girard-diCarlo Aff., Exh. B). Although Blank Rome argues that the "e-mail from Girard-diCarlo contained his standard Blank Rome contact information rather than a manually typed name or signature," and thus is analogous to the automatic imprinting in Parma (Def Br, at 8-9), Blank Rome has submitted no evidentiary proof in this regard; the issue was only argued in its memorandum of law, and not averred in an affidavit. Thus, summary judgment must be denied on this ground, since the issue of fact cannot be decided on the papers.
It is noted that the signature/block is similar to the signature/block used by plaintiff in its emails, and Girard-diCarlo's block always appears to be in bold print (whatever that signifies).
Nevertheless, the statute of frauds also requires that the writing contain all of the essential terms of the purported agreement ( see Nemelka v Questor Management Co., LLC , 40 AD3d 505 [1st Dept 2007]; V. Ponte and Sons, Inc. v American Fibers Intl., 222 AD2d 271 [1st Dept 1995]). Additionally, the common law requires that an agreement be reasonably certain in its material terms, or there can be no legally enforceable contract ( see Cobble Hill Nursing Home, Inc. v Henry Warren Corp., 74 NY2d 475, 483, cert denied 498 US 816, citing Joseph Martin, Jr., Delicatessen v Schumacher, 52 NY2d 105, 109; Restatement [Second] of Contracts § 33 [1981]). "Further, a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable'" ( Matter of 166 Mamaroneck Ave. Corp. v 151 East Post Road Corp., 78 NY2d 88, quoting Martin, Delicatessen, 52 NY2d at 109).
Here, the purported agreement did not set, or provide the means to determine, the amount of the proposed merger fee. Nor did the e-mails describe any of the services that MBI might be required to perform to earn that fee. Nevertheless, MBI argues that the term "reasonably determined" fee is definite enough to sustain this contract, based on the undisputed fact that Blank Rome agreed to pay ML A a merger fee of $720,930.70 for the same transaction. MBI further argues that, under their agreement, MBI was required to do no more than disclose the firm name, in that payment was conditioned solely upon the consummation of the merger.
Where it is clear from the language of an agreement that the parties intended to be bound, and there exists an objective method for supplying a missing price term without the need for new expressions by the parties, an enforceable contract may be found ( Cobble Hill, 74 NY2d at 483). Such objective method "might, for example, be found within the agreement or ascertained by reference to an extrinsic event, commercial practice or trade usage" ( id., citing, inter alia, Metro-Goldwyn-Mayer v Scheider, 40 NY2d 1069, 1070-71). Thus, a provision promising "reasonable compensation" may be sufficiently definite, in light of industry standards, to make the contract enforceable ( see, e.g., Catlin v Manilow, 170 AD2d 357, 357 [1st Dept 1991]).
Here, however, the e-mail exchange between MBI and Blank Rome makes no reference to any objective method or standard for determining the amount or calculation of the proposed merger fee. Indeed, although Lehrman initially proposed that such fee be "reasonably determined by Blank Rome LLP and MBI in accordance with market standards" (Lehrman Aff., Exh. E [emphasis added]), Girard-DiCarlo expressly modified that language to eliminate that provision, and instead to provide that any fee be "be reasonably determined between Blank
Rome LLP and MBI" ( id., Exh. F), i.e., to make the fee the subject of future negotiation, and to remove any constraint or requirement that the fee be based on an objective industry standard. The fact that Blank Rome later agreed, as part of the merger, to assume H B's obligation to pay a $720,930.70 merger fee to ML A under those parties' agreement, is in no way referable to the purported agreement between MBI and Blank Rome, and does not add the objectivity required to make the agreement enforceable.
As it evident that the parties expressly left the price term for future negotiation, the purported e-mail agreement was merely an unenforceable agreement to agree. Accordingly, Blank Rome's motion for summary judgment to dismiss the breach of contract cause of action is granted.
In view of this determination, the Court has not considered the other arguments raised.
The motion to dismiss the second cause of action, for unjust enrichment, is also granted. While the statute of frauds is not necessarily a bar to a cause of action for unjust enrichment ( see RTC Properties, Inc. v Bio Resources, Ltd., 295 AD2d 285 [1st Dept], lv dismissed 99 NY2d 531, citing Farash v Sykes Datatronics, Inc., 59 NY2d 500), where, as here, the claim for damages is indistinguishable from, and merely duplicative of, the breach of contract claim, dismissal is warranted ( Andrews v Cerberus Partners, 271 AD2d 348 [1st Dept 2000]; Fallon v McKeon, 230 AD2d 629 [1st Dept 1996]).
Accordingly, it is
ORDERED that plaintiff's motion for summary judgment is denied; and it is further
ORDERED that defendant's cross motion for summary judgment dismissing the complaint is granted and the complaint is dismissed with costs and disbursements to defendant as taxed by the Clerk of the Court upon the submission of an appropriate bill of costs; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.