*1 [8 1] NYS3d Respondent, Kolchins, Andrew Evolution Markets, Inc., Appellant. Department, April First
APPEARANCES OF COUNSEL (David City Cohen, Wechsler & LLP, New York B. Wechsler counsel), appellant. and Todd for Gutfleisch Plimpton City (Jyotin Debevoise & LLP, New York Hamid Olga Kaplan counsel), respondent. and for
OPINION OF THE COURT J. Renwick, plaintiff
This breach of contract action stems from employment Andrew Kolchins’s with defendant Evolutions employment agreement Markets, Inc. The most recent com September August menced on 1, 2009 and ended on 2012. expiration, parties engaged correspondence Before its regard agreement. question with to an extension of the for parties’ our determination is whether the emails and other cor respondence constituting binding can be viewed as offer and acceptance employment agreement, of an extension of the they created a a formal contract in the absence of
such legally the documen- Because we find that enforceable contract. allega- utterly plaintiffs tary factual refute evidence does agreement parties material on the reached an tions that Supreme Court renewal, contract we conclude terms of a properly pursuant motion, to CPLR denied defendant’s (a) (1), for of contract. the first cause of action breach to dismiss Background
Factual Markets, Inc. firm of Evolutions The international finance advisory brokerage provides transactions and structures energy global commodities in the environmental services joined marketplace. in 2005. In Plaintiff defendant three-year dated into a entered September tenure with defend- 1, 2006. Over the course his energy manage plaintiff renewable ant, came to defendant’s group. market employ- August the 2009 31, 2009, the executed
On covering three-year period ending ment agreement provided August The 2009 for 31, 2012. salary per year, $200,000 and for
receive a base Among “Sign these was a On receive a number of bonuses. payable installments, $750,000, in three with Bonus” of days employment agreement $300,000 due within equal $225,000 installments of due on the first start date and agree- the start date. The 2009 and second anniversaries of participate production provided in a ment also earnings of net received bonus of least 55% payable group, paid basis, “within two months on a trimester *4 given of the close of a trimester.” significant provision employment third in the 2009
The payment agreement special noncompete payment. was the This triggered by provision plaintiff if terminated defend- were quit employment or for “Good Reason” ant “without cause” his any three-year period prior time to termination of the of employment. plaintiff receive, to event, In such was entitled along salary special noncompete bonuses, and a with his base agreeing Competi- payment exchange “for a not to work resigna- period tor” for a of six months after his termination or special noncompete payment the The was to be made “on tion. payment following receipt dates of funds firm-wide bonus any payments “calculated consistent [defendant],” with such compensation during [plaintiffs] the calculation of bonus with employee [he was] [defendant].” an last trimester of The “Special Non-Compete Payment” was defined as “bonus (i) compensation respect [plaintiff] of transactions: bro- (ii) during period employment [his] kered for which any contingency [defendant’s] right associated with to receive payment during Non-Compete is satisfied Period.” significant provision
The fourth of the 2009 agreement guarantee payment. was the As the label indicates, provision guaranteed plaintiff this would receive a mini- salary year mum combined base and bonus for each no If $750,000. contract of salary less than such combined bonus and specific year, $750,000 did reach the threshold for Payment” the difference would constitute a “Make Whole due plaintiff year. guarantee at the of each end calculation, “Sign however, did not include the On addition, Bonus.” In provision contained a “For the avoidance of doubt” clause, provided which that, bonuses, unlike the other bonus plaintiff during would earn the second trimester of the 2009 employment agreement computa- would not count toward the guarantee payment. any tion of the On hand, the other payable special noncompete amounts under the payment computation guarantee would toward count compensation year ending August for the last of the contract 31, 2012.
Finally, “[e]xcept provided the 2009 that, stated respect Sign Special above with On Bonus and Non- Payment, Compete eligible any in order to be to receive Pro- Compensation, [plaintiff] duction Bonus ... or Guaranteed actively employed [defendant] [its] must be at the time of payment firm-wide bonus Likewise, dates.” eligible any stated, “will not be such receive bonus Compensation already given [he had] or Guaranteed if notice resign.” [his] intention to agreement, On 15, 2012, June end towards the of the 2009 CEO, Ertel, defendant’s Andrew sent an email captioned writing,” “In which stated: your
“The terms of our offer are the same terms (other existing contract than clarification around team), departed the issue of members include: *5 year
“3 term salary
“$200,000 base ($300,000 upfront, payable bonus “$750,000 on sign anniversaries) 2nd on 1st and $225,000 payable minimum compensation cash “$750,000 per year net of earnings 55% of pool bonus “production desk. energy] [renewable u do have me know but let further
“Any questions, contract.” existing your email, June 15 to Ertel’s 16, 2002, replied July plaintiff
On im- Ertel send contract.” full, accept, pl[ease] in “I stating, forward full, Looking “Mazel. stating, mediately replied, run.” great another Benjamin counsel general 20, 2012, defendant’s July
On new [his] marked draft “clean and plaintiff emailed Zeliger “[m]ost stated that Zeliger agreement.” [director] role as your to dates and simply updates are changes noted two “substan- Zeliger business.” energy] the [renewable changes proposed The first of these however. changes,” tive sign installment repay any year’s plaintiff was that terminated for [were] Reason or Good if he “without quit bonus provi- this “clawback” asserted year. Zeliger Cause” in that in order to “protect company policy now standard sion was the em- having and then on bonus sign from paying company related to change The second it.” receiving after quit ployee desk employee the retention of “clarifying language regarding with longer [defendant].” are no if the employees bonuses “I will review later, responded, A minutes few I to counsel. sending will initial feedback before my provide prob [sic]. to clawback reciprocal language pertaining want just sign-on I the full bonus.” get cause [without] If fire me you already you.” there protection “[T]hat Zeliger replied, “draft.” a “revised” emailed Zeliger July On changes make several had “agreed that he Zeliger stated [plaintiff] including “[specifying that [plaintiff] requested,” committee,” reducing management a member of the shall be had to on certain report to whom people number “manage- to effect a power issues, “[specifying” plaintiffs employees. for departed to bonuses relating ment override” changes, explaining: to make certain declined Zeliger to reflect a pro the clawback change “We did not remains amount repayment. repayment rata paid. on bonus sign the amount of the last
53 “We not did reinsert the ‘For the avoidance of doubt . .’ . sentence in the guarantee paragraph. That unique was to 2009 provision your when current contract was and signed, was meant to not include [second trimester] from bonus 2009 as of part your for the guarantee year your first current contract because your bonus structure had changed.
Your new contract, however, roles [sic] guaran- contract, tee from current your and the guarantee for the next years three should continue to be calculated in the as same way guarantee from previous years i.e., calculated measuring — total cash compensation received during each one year period beginning 1st.” Sept “We did not the terms of change Special Non- Compete Payment, which remain your the same as current contract.” closed, “I
Zeliger further, am to discuss I happy and you understand are to show the going to your attorney for review.” Within a minutes, plaintiff few responded:
“We can discuss But tomorrow. not including avoidance of doubt sentence makes no sense. Why would I any money that earned for the company [the second trimester] and in a new contract paid go against my minimum It logic [?] defie[s] and com- mon sense. This will provision actually [de- benefit as say any fendant] one I year may large have a bonus due to me [o]n Oct that could used be against minimum, my rather than forced pay be to me.”
Zeliger replied, it, “Let’s discuss As I tomorrow. understand the calculation is to meant be total cash paid you between 1st Sept through August 31st.” Plaintiff responded, again short time later,
“The statement only was meant is BS [sic] is not what the intended [language] was created for. It was created for just way this. No should this revenue in a go against my minimum new year. contract It is a bad faith statement I don’t understand [defendant’s] logic.” added, Plaintiff then “This contract to me presented as mirror image my last one. This doesn’t reflect that.” 3, 2012, emailed Zeliger plaintiff: August
On regarding your request discussed “We have in an effort and, guarantee your calculation to make that contract, agreed we’ve your finalize to this agreeing that we’re Please note change. additional having any subject you change hope we contract, your changes substantive final. Attached substantially now against compared contract your is a marked draft *7 see we extended draft I sent. You’ll that the last guaran- and have the months now term two your - dur- 31 period from each Nov Oct tee calculated term.” ing with “limited com- 13, 2012, responded August
On later, stat- replied days his two “attorney.” Zeliger ments” from lawyer’s some of “accepted [plaintiffs] defendant had that ing others,” to be to “hope[d] and and able tweaked some changes this soon.” sign August 15, sug- to dated
In an email Zeliger gested they person,” stating: that “discuss to to not allow me reaching “It seems me to be over clients or solicit [defendant’s] to communicate with non com- my of time after employees a period are a worst we pete. Understanding negotiating scenario, expect to me you prevent case how can me, a WITHOUT working doing job paying from or things If want me from these you doing prevent pay th[e]n me. non why
“In would regards special compete, go period monies to me after contract any paid [sic]? guaranteed comp against previous years you If that common sense? go against [Doesn’t] me term, protect special th[e]n want that with my if and when contract compete non payment all reason- you hold me out. These are expires requests. able is a salary
“You have to base my understand if hold compensation you mere portion my scenario) (in a worst than me out of market case as my are not me to sit out you really paying [sic] thr[ough] my is determined comp mainly [sic] have a VERY otherwords, you already In bonus. RESTRICTIVE non compete, [I] which am fine with you . . . but have to me to pay enforce it.” In an email dated August 17, 2012, Zeliger offered to set up contract, a call to discuss the stating: time,
“At this we are not willing to make the ad- ditional requested changes your agreement other than the that we changes accepted last draft.
Also, we have two that we want changes to make: (1) extending the employee non-solicit from 9 months to 18 months following the non-compete pe- (2) riod; and revising production bonus language clarify your while from payout the bonus pool your income, 55% of net the payout for oth- ers on desk is less depending on seniority.” minutes, Within responded, stating, “We are headed I cannot wrong way. non accept compete language me from prevents doing my [job] or a job without getting paid.” In an email to dated Zeliger August 23, 2012, plaintiff followed “I am up, stating, willing your consider two proposed changes. Let me know what the next if steps are any.” Zeliger responded, understand, “[J]ust so I you do otherwise accept *8 last draft of your we sent to you?” Plaintiff replied:
“For the part most comments are my not meant to be commercial but to tinker with language was written 3 yrs to reflect ago today’s scenario.
“[Defendant’s] approach my was to counter com- ments with terms that did not do anything to improve the contract language!;] rather it was to be confrontational.
“I just don’t understand why common sense refuses to used be on some of this language.
“I haven’t had a chance to review this language for over a week and don’t think your unreasonable terms were going to have me change my opinion some language. th[is]
“Is that you how were I negotiating!?] Actually don’t want I negotiate. think we It agreed terms. some old
clarifying language.” vacation, While on informed defendant that he wished to continue the contractual discussing “documentation he returned to the office on Tuesday, September
issues” when did not happen. 2012. This Instead, 1, 2012, letter dated defendant ad- September had “ceased”: employment vised that his 22, 2012, “On June notified us that do not you you renew) (i.e., to extend your Employment wish then, despite [defendant]. with Since Agreement efforts, have not entered into a new writ- you our ten with us. That is unfor- tunate, However, but decision. as a result of your decisions, your Date under Em- your Ending yesterday, ployment Agreement August result, As a with your employment [defend- 2012. today. said, has ceased effective That we ant] of, remind and you expect you by, your abide under ongoing obligations your Employment Agree- ment, without limitation set including those forth covenants], in Section 6 which [restrictive [defend- will enforce. . . . ant] your
“While we believe the cessation of employ- [defendant], ment is not a termination and your instead non-extension of Employment Agree- ment your choice, without prejudice [defend- in an effort to avoid positions, any dispute, ant’s] and fully claims, all of its and reserving rights [de- (i) will you: thirty days fendant] nonetheless pay (ii) in lieu salary notice; base benefits your salary during base Period Non-Compete so as execute and return long you to [defendant] (the the enclosed General Release form of which your Employment Agreement was annexed to *9 ).” Exhibit B . . .
Following notification from defendant that his employ- “ceased,” had ment commenced this action in October 2012. The first cause of action alleges breach of contract and seeks for “benefits to which damages [plaintiff] is entitled under the 2009 as extended the Exten- Employment Agreement Agreement.” unjust sion second cause action alleges enrichment, virtue of defendant’s “retaining” production his 2012, bonus for the second trimester of as well as further mon- owed him a allegedly ies as special noncompete payment.1 In November defendant moved pursuant to CPLR 3211 (a) (1) to dismiss the first and second causes of action of the for failure to state complaint a claim based on documentary ev- In motion, idence. of its support defendant submitted, among things, other copies correspondence between the summarized above. As to plaintiffs claim that defendant had breached the 2009 agreement, defendant argued that, because his employment ended before the contractual due date of the bonus and production special noncompete payment, plaintiff had “forfeited his right the monies.” Defendant argued that action, second cause of for unjust enrichment, was “precluded by existence of a written contract,” namely, 2009 agreement.
The motion court partially granted defendant’s motion to dismiss to the extent of the second dismissing cause of action for unjust enrichment as duplicative of the breach of contract court, claim. The however, denied dismissal of the breach of contract claim on two grounds. First, the court found that “emails submitted are not evidence’ ‘documentary [CPLR under (a) (1)].” (2013 NY 31978[U], Ct, *6 Slip Op NY [Sup 2013].) County the court found Secondly, that even if deemed evidence, the emails do not “conclusively refute Plaintiffs contention that had entered into a bind (Id. *7.) ing agreement as of July 2012.”
Discussion (a) On a motion to (1), dismiss to CPLR 3211 pursuant a court is “to obliged factual accept complaint’s allegations true, according the benefit of every possible favor inference, able whether al determining only facts as (Weil, fit Gotshal & leged any within cognizable legal theory” Hills, LLP v Manges, Fashion Short Boutique Inc., AD3d 267, 270-271 [1st Dept 2004] [internal marks omit- quotation 1. Plaintiff seeking also avers a third cause of action a declaration that (b) agreement, “purports prohibit section 6.3 of the 2009 [plaintiff] which having any dealings from business or [de- communications with a client of period following fendant] for a employ- nine months the termination of his ment,” prohibit [plaintiff] is “not entering enforceable from into a consult- (not ing arrangement competitor) any with a client that would not involve activity competitive [defendant], any with the business of solicitation on competitive business, any any behalf of or use or disclosure of confidential [defendant].” information of
58 (a) (1) ted]). pursuant Moreover, to CPLR 3211 dismissal only documentary “utterly if the evidence submitted warranted (Goshen plaintiffs allegations” factual v Mutual refutes Life Greenapple N.Y., 314, [2002]; 98 NY2d 326 see v Ins. Co. of 2012]), Capital Dept [1st One, N.A., 548, 92 AD3d 550 “conclusively a defense to the asserted claims as a establishes (Weil, Manges, LLP, & 10 matter of law” Gotshal AD3d 270- omitted]). documentary quotation [internal If 271 marks proof disproves allegation complaint, an essential dis (a) (1) pursuant 3211 if missal to CPLR is warranted even allegations, standing alone, could withstand a motion to (see dismiss for failure to state a cause of action v McGuire Sterling Doubleday [1st Enters., L.P., 660, 19 AD3d 661-662 2005]). Dept case,
In this defendant’s defense to the breach of contract premised upon documentary claim, evidence, down boils to exchange correspon- contention of emails and other dence described above establishes as a matter of that the law did not enter into an extension of the 2009 agreement. employment agreement Since the had not been argues, duty pay sign renewed, defendant it had no on any duty pay bonus for new Likewise, contract. it had no (which any production for the second bonus trimester of 2012 Aug. 2012), agreement, 31, ended since, under the 2009 only entitled to receive that if bonus he remained employed Similarly, two months after it had accrued. since plaintiffs simply expired, contract had and he had not been duty give plaintiff any special terminated, it had no noncompete payment.
Preliminarily, reject Supreme we Court’s conclusion that correspondence such as the emails here do not suffice as (a) (1). purposes evidence for of CPLR 3211 This consistently example, Schutty Court has held otherwise. For (86 Speiser Dept 2011]), [1st v P.C. 484, Krause AD3d 484-485 correspondence this Court found drafts an purposes establishing sufficient for a defense under the stat (44 Similarly, Langer Dadabhoy [1st ute. Dept AD3d 426 [2008]), 2007], lv denied 10 NY3d this Court found “documentary evidence in the form of e-mails” to be sufficient (a) (1) carry day for a defendant aon CPLR 3211 motion. (188 Corp. Likewise, in WFB Telecom. v NYNEX AD2d Dept [1993]), [1st 1992], lv denied NY2d 709 this Court (a) (1) granted a CPLR 3211 motion on the basis of a letter complaint. counsel that contradicted from the rule which email Therefore, there is no blanket is to be *11 excluded from consideration evidence under the statute. agree Supreme
Nevertheless, that we with Court the correspondence utterly disputed and other do not emails refute allegations agreement plaintiffs that the reached an on the material terms of the contract renewal. “To establish the agreement, existence of an enforceable must estab acceptance offer, consideration, mutual offer, lish an as (22 9).§ 2d, Jur sent, and an intent be bound NY Contracts meeting the minds must include on all That es (id. 31)” (Kowalchuk Stroup, § 118, terms v 61 AD3d sential 2009]). Dept [1st 121 determining begin contract,
In the existence of a valid we par- the examination of the communications the with between 15, We find that the June 2012 email sent defendant’s ties. merely “preliminary negoti- CEO, Ertel, was not an incident in employ- ations,” but an actual offer for the renewal of the 2009 agreement. only did Ertel characterize it as an offer ment Not existing [as the] that was made under “the same terms specified employ- the material the contract,” but he terms of period employment, yearly ment contract: the base sal- sign yearly compensation, ary, minimum bonus, and production bonus. light principles “[a]n in of contract of- When viewed law bargain, willingness fer is the manifestation of to enter into a understanding justify person in so made as to another his (Restate- bargain it,” assent to that is invited and will conclude 24), [Second] § 15, ment of Contracts Ertel’s June 2012 email hardly extending can be construed otherwise than power accept. Regarded plaintiffs context, in this July subsequent purported acceptance by 16, his 2012 email to accept [please] reply [the] Ertel, contract,” “I in send interpreted acceptance 15, email, June 2012 must be as an immediately replied, stating full, in offer, to which Ertel looking great “Mazel, forward to another run.”2 general acceptance rule, effective, in to be “As a order an comply clear, the offer and be it must with the terms of tov,” 2. Mazel an reference to “Mazel tov” or “mazal a Hebrew obvious significant phrase express congratulations happy for a and or Yiddish used to occasion or event. 60 King, 208 AD2d unequivocal” (King
unambiguous 53 1994], 2d, 21 NY Jur Contracts citing Dept [3d § 1143-1144 on Contracts Lord, 2 Richard A. Williston [1982], 1990]). nothing as there was at 68 ed Inasmuch [4th 6:10 § 16, plaintiffs July or about unclear, equivocal ambiguous it email, appears June to Ertel’s response email Hence, according plaintiff acceptance. an effective constitute inference, as we must do favorable every possible the benefit (a) (1) (Weil, to CPLR 3211 pursuant on a motion to dismiss LLP, & 270), AD3d at and viewed Manges, Gotshal one find dealings, may reasonably of the parties’ prior context 16, 2012 email 15-to-July exchange, par- the June employ- an to renew had entered into ties three-year term, carrying existing a new forward ment for *12 agreement. under the 2009 plan compensation however, end there. In order to argue The does not inquiry, formation here as treating process employed the contract after the it, that, July to bind defendant out points ineffective the entered into a train of cor- 16, exchange, parties long 2012 contract, the which never formalizing aimed at respondence inference However, took to overcome the reasonable we place. the in the correspondence ending draw from the language did indeed intend July 16, exchange 2012 —that contract —defendant must do more thereby binding to create a a than to the circumstance formal document merely point defendant must show either that both contemplated: par- was their was to of no correspondence legal ties understood that be to effect or that had reason know that defendant a obligations that no should arise until formal contemplated contract executed.
But defendant has referred to no evidence either these On the conclusively establishing possibilities. record, has that ei contrary, this no evidence been shown upon not to to right prior ther reserved be bound party expressly in language the execution of a formal Nor does the writing. an intent not to unambiguous their indicate be correspondence until a formal was executed writing parties. bound writing prog mere fact that defendant often referred to the a “draft” is not here where other dispositive correspon ress as have had a different parties may dence indicates Indeed, on occasions understanding. plaintiff expressed several the view that he was not but that he was seeking “negotiate” or clarify language bring language either seeking
61 actual parties’ performance conform with under the 2009 employment agreement.
Defendant,
however,
that even if we find
argues
evidence
intent,
a binding
contractual
contract never came
supporting
into
because
too
being
many important
terms were left
In
unsettled
of letters.
of this
exchange
support
conten
defendant
points
tion
difficulties the
subsequent
encountered in
on certain
reaching agreement
terms. The law
is clear that
intend
although
parties may
to enter
into a
if
contract,
essential
terms are omitted from their agreement,
if some of the
indefinite,
or
terms included are too
no legally
(Cobble
Hill Nursing Home v
enforceable
contract will result
Henry
& Warren
cert
Corp.,
denied
475,
[1989],
74 NY2d
482
Martin, Jr.,
Delicatessen v Schum
[1990];
Joseph
Indeed, the initial to be changes appeared simple proposed that would not necessarily clarifications modifications indicate a lack of of the minds on the essential terms. meeting instance, For the first draft defendant inserted a clawback clause intended to On Bonus” The modify “Sign provision. clause, however, alter clawback did not the amounts Instead, simply On Bonus.” the clawback clause periodic “Sign that each bonus was the em- provided periodic contingent upon each On remaining “Sign until end of ployee employed Bonus” did not find the modification period. Initially, plaintiff claw- objectionable. only sought Plaintiff clarification that did not if he was terminated without cause or he apply back for reason.
resigned good Defendant accepted this clarification even though employer found it unnecessary because “that protection in there already you.” [was] for
In the draft, first defendant also included a modification of the 2009 guarantee payment provision. As the language indicates, such provision guaranteed that would receive a minimum payment combined salary bonuses $750,000. If totaling the combined salary and bonuses paid year did not reach specific $750,000 thresh- old, the difference would constitute a “Make Whole Payment” due to at the end year. 2009 agreement, however, contained a “For the avoidance of doubt” clause. The clause inured to benefit since it provided that he production bonus earned during the second trimester of 2009 would not be included in the “guaranteed compensa- tion” calculation. Defendant did not seek to significantly alter the 2009 guarantee provision; it simply sought to remove the “For the avoidance of doubt” clause from the provision because the clause was to the 2009 “unique” agreement. It had been inserted to the 2009 employment agreement to compensate for the fact that plaintiffs “bonus structure had changed” when such contract was signed. Since the “avoidance of doubt” modification involved a single trimester of production bonus, which, as defendant acknowledged, was to the unique it agreement, cannot be viewed as a significant change guaranteed compensation scheme.
Plaintiff also complained about defendant’s purported inser- tion of a second modification to the guaranteed compensation scheme. Specifically, plaintiff complained about the inclusion of the noncompete payment would have been if triggered —which he was terminated without cause or he with a quit good rea- an son —as amount factored, be along with base salary and bonuses, in the computation of the “Make Whole Payment” due to plaintiff. However, plaintiff was under the misimpression this was a modification of guaranteed compensation provision of the 2009 agreement. The 2009 agreement explicitly provided amount any due to plaintiff as a special noncom- pete payment would count toward the guaranteed compensa- *14 tion calculation the during year last of the contract.
In it retrospect, that appears the only significant change upon which the parties faltered was defendant’s attempt increase the of the period non-solicit restrictive covenant from 9 to 18 months following On noncompete period. face, its modification to be a material clearly appears change such the terms of the non-solicit restrictive covenant. However, contends that such last minute modification was an defendant attempt by renege the contract by introducing a drastic that it knew was never change going to ac- onerous. cept, presumably financially
If contention is the correct characterization such on a drastic parties’ negotiations, impasse new change necessarily does not defeat original agreement par ties. An still if agreement binding is a has a party change heart between the time of agreeing terms of the agree (see ment and the time those are terms reduced to writing 122-123). Kowalchuk v Stroup, 61 AD3d at Once the renewal reached, however, it agreement may not be ei repudiated by Rather, ther such party. agreement must be enforced. to the dissent’s
Contrary
mischaraterization, we do not hold
“that
the terms on which the parties
failed to agree simply
Rather,
don’t matter.”
we simply hold that defendant has not
established,
law,
as a matter of
that
their emails and other'
correspondence,
parties never entered into a valid
renewal contract and
that,
instead,
their aborted
efforts were intended to
negotiation
agreement.
reach
new
contrary,
On the
if we accord to
benefit of every
inference,
favorable
as we must do
possible
on motion to
(1)
(a)
(Weil,
Gotshal &
dismiss
pursuant
CPLR 3211
LLP,
Manges,
270),
10 AD3d at
we find that
the emails and
other
an inference
correspondence
support
were
engaged
attempts
binding
to formalize the
extension
(see
Kowalchuk,
in a more
formal
instrument
AD3d at 123 [“binding
is nevertheless
be
further documented
...
is enforceable with or without
(internal
omitted)]).3
formal documentation”
marks
quotation
easily
support
position
3. The cases cited
the dissent to
are
its
distin
(39
instance,
guishable
Spier
Southgate
Corp.
on the facts. For
Owners
277,
2007]),
Dept
[1st
AD3d
this Court found that the defendant’s letter
“
contract;
simply
‘possible’
rights
was not a
it
referred to
sale of air
and the
square footage
advice that
it ‘will not consider a sale’ of less than a certain
(37
present
did not manifest a
intent
In
to be bound.”
Galesi v Galesi
AD3d
2007]),
Dept
“plaintiffs pre
[1st
this Court found that while the
negotiating parties
agreed
price
sented evidence that
had
as to
quantity,
drafts,
discussion,
exchange
totality
further
and the
clearly
meeting
circumstances
showed that
there was never a
of the minds
(23
Corp.
on all essential
terms.” In Yenom
v 155 Wooster St. Inc.
AD3d
2005],
[2006]),
Dept
[1st
259-260
lv denied
Even if we were to with the dissent that the employment agree- never entered into an extension of the 2009 ment, we would still find that defendant’s evi- plaintiff establish, dence does not as a matter of law, that was production prior not entitled to a bonus for work done to employment agreement. termination of the 2009 Defendant production claims that was not entitled to the bonus payment contingent upon plaintiff because being of the bonus was “actively employed by [defendant] [defend- at the time of payment,” ant’s] place firm-wide bonus which took after the employment agreement expired. 2009 Plaintiff, however, claims production compensation.” that bonus was “incentive supported by language Plaintiffs contention is contractual stating production [plaintiffs] that bonus was “based on performance” and calculated as “no less than 55% of the Net Earnings plaintiffs plaintiff managed. of the Desk” that if Thus, production
contention is correct that the bonus was actually through performance, plaintiff earned his own would wages, subject be entitled to such bonus as which are not to (see Ryan Kellogg forfeiture Servs., 1, Partners Inst. 19 NY3d (that) link(ed) [2012] [Court expressly 16 held that “bonus was (employee’s) personally labor or services rendered . . . had (and) job been earned and was vested before he left his . . . its payment guaranteed non-discretionary as a term and (internal employment” quotation condition of his marks omit- ted)]; Group, Dept [1st Weiner v Diebold 173 AD2d (in state) 1991] [“the long standing policy against the for- wages applies feiture of earned . . . earned, uncollected [1]). well”]; § commissions as see also Thus, Labor Law 190 given conflicting language concerning the nature of the payment, presents question bonus this issue of fact. “even if only there were no intent upon be bound execution of a formal contract, many changes substantial prepared by [the] draft that were plaintiffs parties’ subsequent counsel and the correspondence establish that meeting there was never a terms, including price.” minds on material Corp., In Yenom significant this Court also found it that “one section of the draft that counsel did requiring not alter was that execution and (id. 260). delivery Finally, of a formal contract” v Gibson Dratfield (269 Greetings 2000]), Dept [1st AD2d this Court “[t]he found that parties’ correspondence and surrounding circumstances establish that they did not intend to be bound until writing their was reduced to formally executed.” significant “[although This Court found it nei- party expressly ther right prior reserved the not to be bound to the execution signed contract, language used in both of defendant’s March letters only establishes an intention to be bound signing”; after a formal thus sum- (id.). mary properly granted dismissal was find, however, that defendant met its burden of
We establishing does not have a claim under the special noncompete pay employment agreement agreement provided pay for this ment. The 2009 “[i]n made the event” that was “terminated ment to be Ending prior [defendant] Date without cause.” It is Septem undisputed plaintiffs employment terminated *16 agreement’s “Ending the 2009 Date” of 1, 2012, after ber August agreement’s Thus, in accordance with the 31, 2012. any special plain language, plaintiff not entitled to noncom employment agreement. pete payment under the 2009 Supreme Accordingly, Court, York the order of New (Eileen J.), August County Bransten, 22, 2013, which, entered appealed from, denied defendant’s motion to dismiss insofar as contract, of of should be modi- the first cause action breach action as fied, law, to dismiss so much of cause of on the noncompete payment plaintiffs special under to recover a seeks agreement, affirmed, and otherwise without 2009 costs. (dissenting). affirming In the denial of de J.P. Friedman, (a) (1), pursuant 3211 to dismiss motion,
fendant’s to CPLR majority plaintiffs contract, the cause of action for breach of many propositions the law of of recites well-established disregards, fully agree. majority I with which contracts a contract has been however, the cardinal rule that whether “ ” ‘totality’ par light of the determined in of the made must be (Zheng City York, v New ties’ conduct and communications of quoting Elec. Contrs. v 556, [2012], Brown Bros. 19 NY3d 572 [1977]), placing Corp., 397, 400 without Constr. 41 NY2d Beam “ phrase any single ‘disproportionate emphasis act, or ... ” quoting (Zheng, expression’ Brown 572, 19 NY3d other 399-400). requires This rule dismissal Bros., 41 NY2d at documentary light undisputed of contract claim breach demonstrating off their that, broke evidence when plaintiffs employment, possible negotiations for a extension of agree they terms that both sides unable to on certain were regarded did not overlook clear, To be essential. they future, them in the issues, nor did decide to revisit these agree going necessary, forward with a new if while nonetheless They consciously matters, and deadlocked on these ment. were give way. law, failure to a matter of this neither side would As attempt agree to enforce is fatal to on essential terms employment, any alleged agreement “not his because to extend 66 (1 definiteness,
of lack of of lack but because of assent” Farns 2004]).1 [3d § worth on Contracts 3.27 at 419 ed No contract can come into existence without “a manifesta (Matter [its] Express tion of mutual assent to essential terms” Corp. Dept. Transp., Indus. & Term. v New York State 93 [1999] [internal quotation 584, NY2d omitted]; marks see 2007]). e.g. Dept [1st Galesi, also Galesi 37 AD3d totality undisputed documentary Here, the evidence of parties’ negotiations support submitted in of the CPLR (a) (1) comprising motion to 20 emails, one let dismiss— exchanged during period ter and two drafts from June 15 through August establishes, 23 of law, as a matter of 2012— reaching meeting par that, far from ever of the minds, the ties ended their discussions a state of affirmative and express disagreement they on several terms both deemed es possible relationship. sential to a extension of their contractual negotiations, Thus, the evidence of the viewed as (Goshen “utterly a whole, refutes” v Mutual Ins. Co. Life [2002]) plaintiffs allegation N.Y., 98 NY2d that he *17 exchange sketchy defendant, as the result of an of three emails at the outset of discussions, their entered into an en agreement three-year employment, forceable notwithstanding for a new term of subsequent undisputed
their documented and agree failure to on all essential terms. documentary
The conclusion that the evidence submitted utterly plaintiffs ap- defendant claim, refutes so as to render (a) propriate pursuant (1), inescap- dismissal to CPLR 3211 is necessarily party every First, able. a to each and step negotiation, of this bilateral and he thus has direct knowl- edge negotiations. of the entire course of the Second, notwith- standing knowledge transpired his direct of all that between Using example negotiation 1. an hypothetical apples, of a sale of Farnsworth, the late Reporter Professor who was the of the Restatement (Second) Contracts, of wrote: distinguish “It is [from essential indefiniteness] one other incompleteness agreement cause of agree. of failure to If the —a buyer apples seller and the of do discuss the matter of the sel- responsibility quality ler’s for their agree and are unable to on resolved, how that incompleteness matter is to be of their agreement respect in that enforceability will be fatal to the agreement definiteness, their because of lack of but —not of lack
because of assent. There is a critical distinction between remaining discussing silent on such a failing matter and it but (1 419-420). agree” Farnsworth on Contracts 3.27 at § discussions, plaintiff and defendant in those makes no himself evidence us a documentary gives picture before claim is in either inaccurate or any way the negotiations any In does assert particular, plaintiff incomplete. in the email record supporting the issues left unresolved resolved, either or subsequently orally through motion were communications that defendant has not submitted. written is that documented and Rather, position parties’ plaintiffs to resolve their differences on issues inability they undisputed as essential an should concluding regarded both him from on that Stated suing putative agreement. not prevent otherwise, that he should have a chance to arguing a factfinder to make for the that —as bargain persuade evidence —the by undisputed documentary established not reach. I see no reason to extend proceed- themselves could Accordingly, on a claim so merit. we should ings lacking legal defendant’s motion grant reverse the order from and appealed of contract cause of action pursuant to dismiss the breach (a) (1). majority’s CPLR 3211 I dissent from the respectfully to do failure so.2 “dispropor-
The can reach its result majority only putting three emails while tionate on the aforementioned emphasis” ensuing evidence of the disregarding parties’ including exchanged during period 17 emails negotiations, subsequent from 20 to 2012.3 Those emails July August conclusively that, contrary premise plaintiffs establish fully writing, I 2. For reasons more discussed at the end of this also dis- majority’s of contract agree with the failure to dismiss breach discretionary pro- cause of action insofar as he seeks to recover thereunder parties’ of 2012 under duction bonus for second trimester 31, 2012, agreement, expired Aug. the term of which before expressly any payable. parties’ such bonus became *18 question being plaintiffs eligibility for the in on his conditioned bonus by pay- “actively employed [defendant] [the] at the time firm-wide bonus of date[ ].” ment fact, majority inaccurately simplifies sequence In the the documented 3. that, plaintiff an email on of events. It fails to mention after defendant sent three-year 15, 2012, proposing employment to extend his for another June your existing (subject [as] “the same terms contract” to clarifica- term on reject pro- point), plaintiffs response essentially on one initial to tion letter, Specifically, plaintiff dated June posal. sent defendant a one-sentence 22, 2012, per 2.4 of stating: accept “Please this letter as notification section my employ- my existing employment agreement that I do not wish to extend Thus, subsequently agreement existing plaintiff ment under its terms.” when 16, 2012, July stating, accept, pis “I send defendant his email of sent contract,” power accept rejection already 22 terminated his to his of June had (see by 15 email any might have extended defendant’s June offer that been claim, neither party intended to renew the terms of simply (the their previous agreement agreement) for a new three- year begin 1, 2012, term to on September day following the final date of the term of the 2009 agreement. Rather, in those negotiations, both no less than defendant— — terms that varied proposed substantially from the terms of the agreement. And, reiterate, to the parties ultimately could on all agree of the terms they regarded essential for a new Thus, term of the full employment. course of the parties’ nego- tiations demonstrates that their initial on exchange ending July 16, 2012 —on which the majority relies to the exclusion of the rest the record —left open essential terms on which no of the minds meeting subsequently could be reached. In view of ultimate parties’ inability to on the agree essential terms “left open” by early emails out singled by majority, those communications plainly were “not intended to be (Restatement understood as an offer or as an acceptance” [3]). [Second] Contracts 33§
It that, at the telling outset of the negotiations, did not object that an agreement renew the terms of the had been already when, reached email dated July 20, 2012, defendant first sent him a draft for a new contract that included at least three significant changes from the terms of the 2009 agreement. Plaintiff did raise objections (1) to two of the changes proposed by defendant, namely, a new provision for “clawback” of the on in sign bonus the event of (2) termination for cause or unprovoked resignation deletion of a provision that payment of bonus for the previ- ous contract year would not count against mini- guaranteed mum compensation for the year which the payment was made. Notwithstanding plaintiffs opposition these particu- lar he did proposals, not assert that defendant had no right propose changes terms of the 2009 fact, In agreement. a different proposed “clawback” provision that, while [Second] Restatement power [1] [“An of Contracts acceptance § 38 offeree’s rejection offer, is terminated his unless the offeror has manifested a intention”]). contrary Thus, any acceptance if there were offer and here— and, view, my totality negates possibility record was—it July 16 email that would have (reviving, constituted the offer 15) plaintiffs counteroffer, proposal defendant’s terminated of June and de- (“Mazel. responding fendant’s email Looking of the same date forward an- run”) great other But, acceptance. would have constituted the to reiter- ate, parties’ subsequent correspondence they establishes never reached contemplated all essential terms for the new term of and, therefore, no being. enforceable contract came into *19 had not been proposal, to him than defendant’s more favorable in the 2009 agreement.4 present three remained shows, the record at least issues
Ultimately, the 2009 at the upon expiration unresolved reached a standstill on negotiations after August end of issues arose from outstanding 23. Two of those August or about terms of the 2009 to deviate from the proposals himself, not defendant. These is- had made plaintiff been (1) after the pay plaintiff, were whether defendant would sues he during of his for the entire which employment, period end with defendant’s clients would be forbidden to communicate (three defendant’s months and nine employees and to solicit months, the end of the six- respectively, following compensated (2) post- whether noncompete period), month (as Payment” described “Special Non-Compete would count his majority’s opinion) against guaranteed minimum were also deadlocked on compensation. post- defendant’s to extend nine months proposal which would be forbidden employment period during defendant’s employees. to solicit makes of these is- majority light importance
While
sues,
it is
from the
considered
plain
record
material
For
his
example,
regarding
them to be
and essential.
him
the entire
during
pe-
that defendant
proposal
compensate
of contact with defendant’s
riod of
restriction
post-employment
(a
to which he was not
entitled
employees
clients and
benefit
defendant
in an
under
the 2009
told
agreement),
language
17 email: “I cannot
non
August
accept
compete
or a
without
doing my
job
getting paid.”
[sic]
me from
prevents
a
face, this was a demand
for
substantive
by plaintiff
On its
just
pro-
from the terms of the 2009
change
agreement,
yrs ago,”
to “tinker with
that was written
posal
language
in an
August
he
characterized
his
inaccurately
proposals
email,
negotiations
the final documented communication of
off,
their
negotiations
parties apparently resolved
4. Before the
broke
sign
and the effect on the
the “clawback” of the
on bonus
differences over
year
previous
guarantee
given year
paid
on account of the
for a
of bonus
second).
(defendant
issue,
par-
That
prevailed on the first
change
ultimately
does not
resolved their differences over these issues
ties
subjects
negotia-
legitimate
plaintiff treated these matters as
the fact that
tion.
*20
August
expiration
in
record,
the
which he sent as the
31
date
agreement
only eight days away.5
of the term of the 2009
loomed
agree
majority
I
with the
insofar as it
the
articulates
principle
parties
alleged
that,
hornbook
where the
to an
agreed
agreement,
contract have
on all essential
terms of an
carry
their failure to
out their intention to memorialize those
signed writing
necessarily
formal,
in a
terms
will not
render
agreement
provided
their informal
unenforceable,
that neither
party
expressly
right
has
reserved the
not to be bound in the
accept,
pre
absence of such formal documentation.
I also
for
purposes,
majority’s
documentary
sent
view that the
evi
upon
dence
which defendant moved for dismissal does not
express
by
party
right
include an
reservation
either
to be bound until a formal written contract had been executed
(cf.
Sys. Corp.
Jordan Panel
v
Co.,
Turner Constr.
It absence emphasis bears formal, of a before the execution not to be bound right mean that the existence of an en does not written law, matter be as a negated, cannot forceable after the negotiations of the parties’ uncontroverted evidence made, as this allegedly to be enforced sought promise times courts, York has ruled numerous Court, other New among (see Corp., Owners AD3d Southgate [1st Spier *21 [“(t)he showed that negotiations further parties’ 2007] Dept terms”]; the minds on all essential meeting never a of there was Inc., St. 249; Yenom v 155 Wooster 23 Galesi, Corp. 37 AD3d at [“(E)ven if there were no 2005] 259, Dept [1st AD3d 259-260 contract, formal execution of a only upon intent to be bound draft that were Cooper’s pre to changes substantial many the the corre parties’ subsequent counsel and by pared of the meeting there was never a establish that spondence Drat lv denied 6 NY3d [2006]; 708 terms”], minds on material 294, 2000] AD2d 295 Greetings, v Gibson Dept [1st 269 field of a claim breach summary judgment dismissing [affirming “neither party expressly that notwithstanding contract of the to the execution prior reserved the not to be bound right Wilcox, 939, [3d 182 AD2d 940 May contract”]; Dept signed a as the result of writ came into existence 1992] [no contract “(a)s corre ongoing evidenced ... because, ten offer par as well as the attorneys the parties’ between spondence of the minds with discussions, meeting there was no ties’ Inc. v also CAC Group see terms]; essential to” certain respect Cir LLC, 523 Fed [2d 2013] [in Group Maxim Appx the dismissal of an law, affirming York case New governed of a prom for the sale agreement enforce an unsigned action to reserved expressly neither issory “(a)lthough party note of a document” to the execution to be bound right prior omitted)]). (internal marks quotation foregoing principle of the
An instructive
illustration
(37
249), in
case of Galesi
AD3d
the above-cited
provided by
Ctr., Inc.,
363, 369-370
4 NY3d
e.g. Flores v Lower E. Side Serv.
6. See
(2005) (“the
of conduct
review of the course
rule . . . authorizes
common-law
meeting minds suf-
was a
parties
whether there
between the
to determine
contract”).
give
ficient to
rise to an enforceable
a judgment dismissing
complaint
which this Court affirmed
grant
for breach of
to a
pursuant
summary judg-
contract
In
we
ment
to the defendants.
so
held that
the record
doing,
made,
most,
had
at
“an
established
indefinite
” (id.
249).
and
We
‘agreement
agree’
unenforceable
to
explained that,
“[a]ssuming
alleged
even
was
promise
made,” evidence that
had
notwithstanding
terms,
drafts,
reached
on some
fur-
exchange
“the
discussion,
totality
ther
and the
of the
clearly
circumstances
meeting
showed that
there
never a
all es-
minds on
(id.).
here,
sential
terms”
Similarly
evidence
the parties’
that,
establishes
negotiations
notwithstanding
July
their
to
new
“agreement
agree”
terms of a
were
agreement,
they
subsequently
unable
on all
agree
they
of the terms
deemed essential
an
such
put
upon
expiration
into
operation
contract
necessarily
then
force. It
follows
no new agreement
since,
came into
as the
itself
being,
majority
“an en-
recognizes,
forceable
requires
contract
mutual assent
its essential
terms
(Edelman
v Poster,
conditions”
72 AD3d
Dept
[1st
2010]).
Remarkably,
purporting
distinguish “easily”
above-
Galesi,
cited
in Spier,
Yenom and Drat
decisions of this Court
“
”
based on
totality
‘the
of the circumstances’
(quoting
field
*22
Galesi) on which those cases
decided,
were
the majority
I
synopsizes
point
making. Here,
the
am
in
cited
very
the
cases,
the record
us with more than
terse
presents
just
the
email exchange
plaintiff
that
claims to have
to a
given rise
contract, and on which the majority focuses to the
of
exclusion
the remainder of the record. We have before us the documentary
record of more
a month
than
of the parties’ negotiations
follow
ing what
the majority regards
as the decisive email
July
of
2012, and
has
plaintiff
disputed neither
the
the
accuracy nor
material
of this record. The
completeness
Court of
has
Appeals
“
”
instructed us to look to the
of
‘totality’
record,
light
this
in
of
“ ‘the attendant
circumstances,
the situation of the
and
parties,
”
objectives
the
were
to
(Zheng,
they
striving
attain’
19 NY3d
Bros.,
Brown
572-573,
at
NY2d
quoting
399-400),
determine whether
plaintiff may
prove
be able
that he and
defendant
a
entered into
new
When
agreement.
we do look
totality
the
record of
however,
the
we
parties’ dealings,
Spier, Galesi,
find —as we
Yenom
found in
and
Dratfield —that
parties
could
all
agree
not
on
of the essential
terms
conclusion is
inescapable
they contemplated.
agreement
came into being.
enforceable contract
that no
evi-
totality
it is
from
plain
Since
did
they
agree,
July
that
on
dealings
of the parties’
dence
the 2009
for an-
agreement
extend the terms of
16, 2012,
claims that
plaintiff
three
and not even
years,
other
any
the minds on new terms at
meeting
subsequent
a
reached
of action for
I
that
cause
breach of
time,
conclude
Further,
law.
contrary
as a matter
contract
fails
the terms on which the
failed
majority’s position
matter,
don’t
the record establishes
to agree simply
and
these terms as material
essential. Where
parties regarded
fashion,
have,
agree-
[an]
in
reached
piecemeal
“the parties
others,
.
there
but not on
.
.
is a contract
ment on some terms
material
par-
left
were not deemed
open
if the matters
the matters
were
open
and there is not a contract
ties,
if
left
(Four
Vinnik,
Hotels v
material”
Seasons
127 AD2d
deemed
citing Joseph
added],
[emphasis
1987]
Dept
[1st
[1981]).
Martin, Jr.,
Schumacher,
Delicatessen
Further, disregard we cannot the 2009 agreement the expiration the parties upon between if have could, necessary, these terms theory open on the by judicial gap-filling. gap-filling permis Such is been resolved only [of objective where “some method of determination sible independent party’s term] open available, of either mere the is (Metro-Goldwyn-Mayer Scheider, desire” 40 NY2d wish or quotation [1976] [internal omitted]; marks 1069, 1071 see also Matter 78 NY2d 166 Mamaroneck [1991] [judicial filling Ave. Corp. v 151 E. Post Rd. gaps in a contract is Corp., appropriate parties “where it is clear . . . that the intended to objective supplying be bound and there exists an method for missing quoted Corp., in term”], Aiello v Burns Intl. Sec. Servs. J.]). Dept [1st 2013, Renwick, In case, 110 AD3d this parties the issues remained unresolved between the when negotiations appear susceptible their ended do not to such res [to intervening supply missing olution, court, and “a the conception imposing par terms], would be its own of what the (Joseph Martin, Jr., . . . undertaken” ties should have Delica 109), enforcing bargain tessen, 52 NY2d at rather than the parties themselves had made.
Although my colleagues deny by allowing plaintiffs it, breach go notwithstanding parties’ of contract claim to forward undisputed meeting and documented failure to reach a parties minds on a number of terms that themselves regarded majority essential, as treats those essential but disputed supplied that, noted, terms —terms cannot be through judicial any objective gap-filling on basis—as nullities. majority parties agreed essence, that, In holds because the period employment, plaintiff on most of the terms for a new parties open is entitled to ask a factfinder to dictate to the they agree terms which failed to and then to award damages perform for defendant’s failure to thus by imposed judicial system. approach on the This contrary to the settled law of this state. binding contract,
“To create a there must be a manifestation sufficiently of mutual assent definite to assure truly respect are (Express with to all material terms” [emphasis citing
Indus.,
added],
standing
that he be
condition
the contractual
given
employed”
for a
on the date
bonuses
defendant
description,
conveyed by
majority’s
Contrary
impression
7.
provision
agreement did not entitle
production bonus
of the 2009
energy
Earnings
[renewable
personally
less than 55% of the Net
to “no
working
Rather,
along
traders
brokerage]
plaintiff,
with the other
Desk.”
pool
funded in
him,
payment out of a
to be
eligible
for a bonus
under
amount,
entire sentence from
clear when one reads the
as becomes
pool available to the
excerpted: “The total bonus
quoted
which the
words are
(the ‘Desk’)
no less
energy brokerage desk
will be
Eastern U.S. renewable
Earnings of the Desk.”
than 55% of the Net
paid,
plaintiff may
trimester are
based on its view that
be able
prove
wages,
that he is “entitled to such bonus as
which are
subject
to forfeiture.” The terms of the 2009
agree-
defeat this claim as a matter of law.8 While the 2009
production
your per-
ment describes the
bonus as “based on
*25
plainly discretionary,
formance,” the bonus was
as no formula
(as
provided
calculating plaintiffs
opposed
was
bonus
pool
department).
amount of the bonus
for the entire
That
plaintiffs superiors
performance
determining
considered his
(which
production
hardly surprising)
his
bonuses
did not
change
discretionary
payment.
nature of the
Nor does
plaintiff allege
production
that his
bonus for the second
employment
trimester of 2012 had been allocated while his
ongoing,
right
still
so he cannot claim that his
to the bonus
employment
had become vested before his
came to an end.
discretionary
The
nature of the bonus, and the fact that
plaintiffs entitlement
to it had not vested before he left de
employ, distinguish
fendant’s
this case from the decisions on
majority
(Ryan Kellogg
which the
relies
Servs.,
Partners Inst.
[2012] [the plaintiff
19 NY3d
was entitled to recover a
job”
payment
bonus that “was vested before he left his
and the
guaranteed
non-discretionary”];
of which “was
Weiner v
Group,
[1st Dept
1991] [the
Diebold
Order, Court, New York entered 2013, modified, law, on the to dismiss so much of the first cause of action special for breach of contract as seeks to recover a Although majority 8. presented states that an issue of fact is concern- ing production “given conflicting bonus claim language concerning the nature payment,” specify bonus it does not “conflicting what language” is referred to. under employment agree- noncompete payment affirmed, without costs. ment, and otherwise