New York State Court of Claims

New York State Court of Claims

NACHT v. CITY UNIVERSITY OF NEW YORK, #2004-032-117, Claim No. 105832, Motion Nos. M-68554, CM-68782


Synopsis


The parties' cross-motions for summary judgment are denied. Neither claimant nor defendant has established by credible evidence the correct method that was to have been used to calculate the amount due claimant under a contract which called for him to be paid one-half of the net profit gain of sales of a computer certification program.


Case Information

UID:
2004-032-117
Claimant(s):
DARREN NACHT
Claimant short name:
NACHT
Footnote (claimant name) :

Defendant(s):
CITY UNIVERSITY OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
105832
Motion number(s):
M-68554
Cross-motion number(s):
CM-68782
Judge:
JUDITH A. HARD
Claimant's attorney:
Flanzig & Flanzig, LLPBy: Daniel Flanzig, Esq.
Defendant's attorney:
Hon. Eliot Spitzer, NYS Attorney GeneralBy: Arthur Patane, Assistant Attorney General, Of Counsel
Third-party defendant's attorney:

Signature date:
November 23, 2004
City:
Albany
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)


Decision

The parties have cross-moved for summary judgment in this action. The claim arises from a contract entered into by claimant and Baruch College, a senior college within the City University of New York. Claimant was employed with the College's Continuing Studies Program (CAPS), and he alleges that defendant failed to make complete payment due under the contract for the year beginning July 1, 1999 and ending June 30, 2000. According to his calculations, he was owed the sum of $31,404.91 for this period. Claimant also asserts that he is entitled to costs and other benefits pursuant to Labor Law §198.


In its answer, defendant acknowledged that claimant performed work for the CAPS program during the period mentioned, as well as for several years prior to those dates, but asserted that claimant had been fully paid for his work. Defendant also asserted a counterclaim, alleging that claimant had been overpaid by the amount of $7,029.62. Under the contract, claimant was entitled to 50% of the net profit gain on a Microsoft Certification Program. Defendant alleges that claimant relied on improper information when projecting the amount of money he would be owed under this part of the agreement for 1999-2000. Consequently, defendant issued to claimant a check for $10,000.00, in anticipation that the net profit gain would be at least double that sum. In fact, defendant asserts, the actual net profit gain was $4,140.75, which would result in a share of $2,070.38 for claimant and leave a $7,029.62 balance from the check that should be repaid to defendant.

The relevant contract provision is contained in Article IV, which reads in its entirety as follows:
  1. Nacht will receive 50% of the net profit gain for the Microsoft Certification Program in the 1999/2000 year versus the 1998/1999.
A) Net profit is defined as the total sales minus refunds, minus all expenses.
B) Expenses will be assigned as follows:
1) Direct expenses - salaries, book costs, and advertising attributable to Microsoft Program.
2) Indirect expenses will be allocated on a pro-rated basis by the Director of Continuing Studies. Indirect expenses include but are not limited to lab technicians' salaries, new computer equipment, maintenance of existing computer technology, and Continuing Studies brochure advertising.
C) Advertising decisions, such as placement and frequency, will be made by Nacht and the Director of Continuing Studies. In cases where there is disagreement, the Director's decision will prevail.
D) This payment will be paid annually by August 15, 2000 following the end of the fiscal year on June 30, 2000.


In his affidavit, claimant states that he worked for defendant from the period of November 1, 1977 to November 10, 2000.[1] With respect to the last year of his employment, he entered into a contract with the College for "the management of a Microsoft Certification program and the supervision of all computer related programs laboratory personnel" (Flanzig affidavit, Exhibit D). In addition to his 50% share of the net profit from the certification program, claimant was to receive a base pay of $1,000.00 a week, payable every two weeks. When he left his employment, in November 2000, he was given by defendant a report comprised of fiscal statements for the 1999-2000 period and a check for $10,000.00, which he considered to be a partial payment of his share, with additional payment to be received in December (Nacht affidavit, ¶ 5, Exhibit D). Claimant states that, according to his accountant, the financial statements show that claimant was entitled to payment of $51,775.66 (id., ¶ 4)

Claimant's expert accountant, Paul Touhy, confirms in his affidavit that he reached this conclusion after a review of the following documents: 1) the contract agreement between claimant and Baruch College (Flanzig affidavit, Exhibit D); 2) a cash basis year to date statement for 7/1/99 through 6/30/00 (id.); 3) a year to date cash basis financial report for 7/1/98 through 6/30/99 (id.); and 4) a "Microsoft Certification Income Statement for the fiscal years of 2000 and 1999. (id.). Based on his review, Mr. Touhy calculated that there was an increase in net profit and gain from the base year of 1998-1999 to the year of 1999-2000 in the amount of $103,551.32, which would entitle claimant to the sum of $51,775.66 (Touhy affidavit ¶ 2). He does not describe the precise method by which he arrives at this conclusion.

John R. Dugan, Jr., Esq., Dean of Faculty and Staff Relations and Counsel to the President of Baruch College, states in his affidavit that the disagreement between the parties can be traced to their disagreement "over which financial records should properly be used to make" the financial calculation of claimant's incentive payment for the period from July 1, 1999 through June 30, 2000 (Dugan affidavit, ¶ 4). He indicates that the calculation should have been based only on the "Microsoft Certification Income Statement FY00 and FY99" which he had given to claimant's prior counsel, in order to explain the College's calculation of the amount owed to claimant under the contract. This record, he states, is based not on the "cash basis" referenced by claimant, but on the College's "official financial records" which are maintained by the College controller and which "cover all College operations including those of CAPS" (id.,

¶ 5). According to the College's calculations, the net income increase was $4,140.75, making claimant's share $2,070.38. He also explains that the $10,000.00 check given to claimant in November 2000 was a payment made in recognition that the contract called for an incentive payment. The amount of that check appears to have been an estimate, as Mr. Dugan states that the official College records for the year ending June 30, 2000 had not been closed at the time that claimant resigned.

Mr. Dugan also argues that the claim fails because the agreement on which it is based does not conform to the requirements of Education Law § 6218, because the party who signed for the college, Bernard E. Lynch, then serving as Interim Director of CAPS, did not have authority to enter into an enforceable contract with the claimant and because the contract was never approved by the board of trustees of the City University of New York, as required by the statute.

Defendant has also provided the affidavit of Paul Russo, Associate Director of the CAPS program. Prior to July 1, 2000 he had responsibility for information technology programs other than the Microsoft Certification Program. In that capacity, he was familiar with the "cash basis" financial reports on which claimant and his accountant rely in reaching their calculation of the amounts owed to claimant. Despite their name, he states that such a report "does not reflect ‘cash' in any sense of the word" (Russo affidavit, ¶3). Instead, it was a document created solely from the registration slips completed by students who intended to enroll in a CAPS course. At best, therefore, the information indicates the maximum revenue that the program might expect to collect if all of those students actually enrolled and paid the full fees for such courses. Records of actual tuition receipts were maintained by the CAPS Bursar and, ultimately, by the Controller of the college.

It is on the basis of this evidence that the parties have cross-moved for summary judgment on both the claim and the counterclaim.

Summary judgment is a drastic remedy that should only be granted when there are no outstanding issues of fact (Redcross v Aetna Cas. & Sur. Co., 260 AD2d 908, 913-914 [3d Dept 1999], citing to Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). The Court's task is issue finding, not issue determination, and before judgment can be granted it must be clearly ascertained that there are no triable issues of fact outstanding (Matter of Hannah UU, 300 AD2d 942, 943 [3d Dept 2002], citing to Matter of Suffolk County Dept. of Soc. Servs. v James M., 83 NY2d 178, 182 [1994] and Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395 [1957]).

The Court's function in deciding a motion for summary judgment is to determine if any issues of fact exist. In order to do this, the Court must examine the proof in a light most favorable to the party opposing the motion (Iwaszkiewicz v Callanan Indus. Inc., 258 AD2d 776 [3d Dept 1999]). The moving party must make a prima facie showing of entitlement to judgment as a matter of law, proffering sufficient evidence, in admissible form, to demonstrate the absence of any material issues of fact (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]).

In the instant case, neither party has established that it is entitled to judgment in its favor as a matter of law. Claimant has presented the opinion of an expert supporting the conclusion that he is entitled to a larger sum, but that expert's conclusion is merely asserted, not explained. Although the raw material on which that opinion is based was presented to the Court, it is difficult to follow the process, reasoning, or calculations made to determine if the result reached is accurate or presents a reasonable conclusion. Similarly, defendant merely points to one of those documents, which it claims is based on official records that are not before the Court, without providing any explanation of how the figures on that document were developed. The quite different, and mutually exclusive, ways in which the parties calculate the net profit gain also raises questions as to their original understanding of the contract. Certainly neither claimant nor defendant has referred to the terms of the contract to support the result of their calculations or to critique the outcome reached by the other party.

In essence, and unusually for a contract action, the Court is being asked to decide a matter of credibility. Credibility issues cannot be resolved on a motion for summary judgment (Goff v Clarke, 302 AD2d 725, 727 [3d Dept 2003]; see also, Curanovic v New York Cent. Mut. Fire Ins. Co., 307 AD2d 435 [3d Dept 2003])

Claimant's motion is denied, and defendant's cross-motion is denied.[2]




November 23, 2004
Albany, New York

HON. JUDITH A. HARD
Judge of the Court of Claims


The following papers were read on claimant's motion for dismissal of defendant's counterclaim and summary judgment in his favor and on defendant's cross-motion for summary judgment in its favor on both the claim and the counterclaim:
1. Notice of Motion and Supporting Affidavit of Daniel Flanzig, Esq, with annexed affidavits of Darren Nacht and Paul Touhy and Exhibits ;

2. Notice of Cross-Motion and Affidavits in Opposition of Paul Russo and John R. Dugan, Jr., submitted by Arthur Patane, Esq., AAG ;

Filed papers: Claim; Answer



[1] In paragraph 3 of his affidavit, claimant states that he worked until November 10, 1999, but in paragraph 10 he refers to "the end of my employment" as November 10, 2000. In addition, it is unlikely that he could have been given financial statements for fiscal year 1999-2000 if he left in November 1999, and the check issued to him when he left his employment (Flanzig affidavit, Exhibit D) is dated November 2000. The Court assumes, therefore, that the dates of employment given in paragraph 3 resulted from a typographic error.
[2] With respect to the procedural issue discussed at length by the parties in the motion papers, a conference will be scheduled to determine if discovery should be reopened to permit additional depositions.