• Specific Provision in an Integrated Agreement Not an Instrument for the Payment of Money Only for Purposes of CPLR 3213: Lawrence v Kennedy
  • October 13, 2011 | Author: Matthew D. Donovan
  • Law Firm: Farrell Fritz, P.C. - New York Office
  • In a September 22, 2011, decision by Justice Bucaria, the court denied plaintiff’s motion for summary judgment in lieu of complaint under CPLR 3213, as well as granted in part and denied in part defendants’ motion to dismiss. Plaintiff, the founding member and later “of counsel” employee of a law firm, sued the firm and its managing member for both a fixed- and salary-based performance amount under a related employment agreement.

    Defendants moved to dismiss contending that plaintiff, a recent stroke victim, lacked capacity to maintain the action and that an exculpation clause in the employment agreement precluded enforcement of the agreement as against the individual managing member of the firm. Defendants also argued that the agreement did not constitute an “instrument for the payment of money only” for purposes of summary judgment under CPLR 3213.

    The court denied defendants’ motion on the issue of capacity, finding that mere “allegations in the complaint and/or inconclusive statements made by opposing counsel do not establish that plaintiff is lacking in mental capacity and competence as a matter of law.” The court, however, granted defendants’ motion on the issue of individual liability under the employment agreement and dismissed the claims against the managing member, finding that a plain reading of the agreement and the accompanying stock purchase agreement exhibited a clear intention on the part of the parties to exclude liability as against individual firm members. Because neither of the agreements provided for the continuation of a fiduciary relationship after plaintiff resigned his partnership in the firm and became an employee, the court also dismissed plaintiff’s cause of action for an accounting.

    As to plaintiff’s “motion action” under CPLR 3213, the court found that the salary provision in the employment agreement comprised only one component of an integrated agreement, which expressly preserved potential defenses and claims of the firm against plaintiff regarding salary. As such, the provision did not constitute an instrument for the payment of money only.

    Lawrence v Kennedy, Sup Ct, Nassau County, September 22, 2011, Bucaria, J., Index No. 008125/2011