80 F. Supp. 3d 395
E.D.N.Y2015Background
- D’Amato sold her shares in Five Star to Reporter’s Ink on Aug. 31, 2010; as part of the deal she was hired by Five Star under a separate Employment Agreement and agreed to relinquish $300,000 of purchase price in exchange for employment/structured payments.
- The Share Purchase Agreement guaranteed each seller a minimum of $20,000 in court‑reporting work per year (2011–2013) and contained seller representations/warranties about liabilities and taxes, plus an indemnity for pre‑closing taxes.
- Prior to closing Five Star had unpaid vendor invoices, a defaulted equipment lease, and an IRS payroll tax liability; parties dispute whether these matters were disclosed in due diligence or at closing and whether purchase price adjustments/deductions were taken.
- D’Amato claims unpaid commissions (10% on “new sales” in 2011–2015), overtime under FLSA/NY law, and retaliation; defendants counterclaimed for breach of the Share Purchase Agreement and unjust enrichment for undisclosed pre‑closing liabilities.
- The parties cross‑moved for summary judgment; the court addressed choice of law, contract interpretation (ambiguous terms), statutory wage claims, the administrative overtime exemption, retaliation, and quasi‑contract claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Five Star failed to provide the $20,000 minimum court‑reporting work in 2011 | D’Amato: she did not receive sufficient court‑reporting work in 2011 | Defs: 1099 and assignment records show she earned ≥ $20,000 | Denied for both — material factual disputes exist about what 1099/records reflect |
| Whether Defs breached obligation to provide $20,000 in 2012 (given D’Amato’s March 2012 resignation) | D’Amato: obligation under SPA is independent of employment; she remains entitled | Defs: her voluntary termination relieved their obligation | Denied for both — SPA text ambiguous on whether employment status affects the guarantee |
| Whether D’Amato is owed commissions for Suffolk County and Sahn Ward contracts under Employment Agreement (definition of “new sales”) | D’Amato: her efforts procured new contracts and commissions are due | Defs: both were existing clients; term “new sales” excludes renewals; her role was minimal | Denied for both — term “new sales” ambiguous; factual dispute about her role precludes summary judgment; trial limited to these two accounts |
| NYLL §193 wage‑deduction claim for unpaid commissions | D’Amato: commissions were earned and unlawful deductions occurred | Defs: Agreement defines when commissions are earned (conditioned on “new sales”) | Denied for both — because contract conditions and “new sales” ambiguity create factual issues |
| FLSA/NY overtime (administrative exemption and hours worked) | D’Amato: she regularly worked >40 hrs and is non‑exempt | Defs: she performed administrative, managerial duties and/or worked <40 hrs | Denied for both — genuine disputes on primary duties, discretion, and hours preclude summary judgment |
| Retaliation for filing suit (counterclaims) | D’Amato: counterclaims were baseless and filed in retaliation | Defs: counterclaims lawful breach‑of‑contract claims | Plaintiff's motion denied; Defendants’ cross‑motion granted — counterclaims do not constitute an adverse employment action affecting reputation or employment; retaliation claims dismissed |
| Quasi‑contract (unjust enrichment/quantum meruit) claims | D’Amato and Defs (alt.): equitable relief appropriate for unpaid services/undisclosed liabilities | Opposing side: written agreements govern and preclude quasi‑contract remedies on same subject | Dismissed where claims duplicate contract remedies — court grants summary judgment dismissing unjust enrichment/quantum meruit counts that arise from the contracts |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (movant’s initial burden on summary judgment)
- Davis v. J.P. Morgan Chase & Co., 587 F.3d 529 (distinction between administrative work and production/sales)
- Pachter v. Bernard Hodes Group, Inc., 10 N.Y.3d 609 (parties can contractually define when commissions are earned under NY law)
- Topps Co. v. Cadbury Stani S.A.I.C., 526 F.3d 63 (ambiguous contract language generally precludes summary judgment)
- Kaytor v. Electric Boat Corp., 609 F.3d 537 (credibility determinations and inferences are for the jury)