Modeling Scout Sufficiently Alleges Claims Relating to Failure to Pay Severance, First Department Holds

In Lord v. Marilyn Model Mgt., Inc., 2019 NY Slip Op 05093 (App. Div. 1st Dept. June 25, 2019), the court reversed the lower court’s dismissal of plaintiff’s claim for breach of contract arising from defendant’s failure to pay him severance.

The facts, as summarized by the court:

As alleged in the complaint, plaintiff was an experienced modeling scout and was induced to leave his job and join defendant by an offer of employment at a salary of $190,000, plus discretionary bonuses and profit sharing. The parties negotiated an employment agreement that contained, among its other terms, a provision for six months’ severance if plaintiff were terminated without cause. The agreement, dated as of September 15, 2015, recited that it could be signed in counterparts. Plaintiff signed it on August 18, 2015, and emailed the signed copy to two of defendant’s board members. One board member promptly replied, by email, “Welcome aboard. We’ll countersign over the next few days.”

Although defendant never signed the agreement, plaintiff nonetheless began working for defendant on September 1, 2015, and both sides proceeded to perform their obligations under the agreement. Defendant paid plaintiff the stated salary (albeit through a U.K. subsidiary, on account of plaintiff’s lack of a French visa), and plaintiff performed as required under the agreement, including relocating from New York to Paris. Plaintiff performed diligently until March 1, 2016, when defendant terminated his employment without cause. Defendant refused to pay the six months’ severance provided for in the agreement.

These allegations, held the court, sufficiently state a cause of action for breach of contract, in that they “set forth the parties’ intent to enter into a contract and the contract’s terms.”

Furthermore:

The fact that defendant never signed the agreement is not, at this pleading stage, an impediment to a finding that the parties intended to be bound (see Kolchins, 31 NY3d at 107-108; Flores v Lower E. Side Serv. Ctr., Inc., 4 NY3d 363, 369 [2005]; Kowalchuk v Stroup, 61 AD3d 118, 125 [1st Dept 2009]). There is nothing in the agreement stating that it will not be binding until executed by both sides (see Kowalchuk, 61 AD3d at 125). The counterparts clause provides that each party may indicate its assent by signing a separate counterpart; it does not state that the parties can assent only by signing. The merger and written amendments clauses provide only that the agreement, and any subsequent amendments, must be in writing; they do not state that the parties may convey their assent only by affixing signatures.

The court also held that the complaint sufficiently alleges causes of action for promissory estoppel, as well as “recovery of severance as unpaid wages under Labor Law article 6.”