LEVITT v. COMPUTER ASSOCIATES INTERNATIONAL, INC.

Thursday, February 21, 2002

Supreme Court

Nassau County

Justice O’Connell

LEVITT v. COMPUTER ASSOCIATES INTERNATIONAL, INC. ” Plaintiff seeks an Order granting her summary judgment pursuant to CPLR ?§3212, on her claims for certain commissions due and to recover penalties against the defendant pursuant to the Labor Law. Defendant opposes and seeks an Order pursuant to CPLR ?§3211 dismissing the Complaint.

Plaintiff is a former employee of the defendant, working for COMPUTER ASSOCIATES between April, 1996 and September, 1999. It is undisputed that plaintiff was an employee-at-will. In May, 1997, LEVITT signed a compensation package agreement with the defendant which she claims outlined her compensation as a commission salesperson. In this action, plaintiff claims that the defendant breached her employment agreement by not paying her commissions as promised with respect to two large transactions she negotiated on its behalf, one with Tandem Computer Inc. and one with Digital Equipment Corporation.

In her Complaint, plaintiff alleges six causes of action. In the First, she seeks to recover unpaid wages, in this instance, unpaid commissions, under the State Labor Law. In the Second cause of action plaintiff seeks damages under Labor Law ?§198-b, alleging that her commission was wrongfully reduced as defendant entered into an illegal “kickback” scheme with the non-party purchaser. In the Third cause of action plaintiff alleges fraud, claiming that the defendant made false representations in its Sales Compensation Plan to induce her to accept a position in its sales department. In the Fourth cause of action plaintiff argues that the defendant should be “estopped” from relying on any provision in the Sales Compensation Plan to deny her commissions because the defendant breached its implied agreement to engage in good faith and fair dealing with its employee. In the Fifth cause of action plaintiff alleges breach of contract, claiming that she is entitled to a sales commission on an agreement entered into by defendant with Digital Equipment Corp. In her Sixth cause of action plaintiff seeks to recover her commissions on a quantum meruit theory.

Plaintiff claims that she arranged for the sale of $40 million gross and $8 million net of defendant software to Tandem, for which she is owed an outstanding 4.5 percent commission of a valuation on at least $6,595,962.00. Plaintiff claims that her two superior employees, a corporate Vice President and Senior Vice President, no longer with the defendant, had discretion to authorize her commissions. Plaintiff claims that the defendant wrongfully did not give her a commission based on the percentage of the sale, as received by her superiors, but limited her to $67,500.00 because she only worked on the sale for 10 weeks instead of six to nine months. She claims that she is entitled to an additional $229,218.29 with interest and penalties.

Plaintiff provides a copy of her individual compensation plan, which she claims provides a 4.5 percent commission rate on the Net Gaap Value of a sale. She claims that the proof presented demonstrates that defendant fixed the Net Gaap Value of the sale to Tandem at $6,595,962.00. She claims that there is nothing in her contract which would permit defendant to reduce the commission if a sale took less time than anticipated, and that there is no clause that accelerating the transaction would trigger a penalty.

Defendant claims that the plaintiff did not earn the commissions she now seeks for her actions respecting its contract with Tandem. Defendant’s representatives contend that during 1997 and 1998, two agreements were reached between defendant and Tandem, which were in effect, a written amendment to the existing software development and marketing agreement between defendant and Tandem and a Vendor Services Agreement. (Cross Motion, Exh. B, C) Defendant claims that numerous divisions of the corporate defendant were involved in the negotiations leading to these agreements. It claims plaintiff LEVITT, a Sales Manager for the corporation, was involved in discussions with the front-line counterparts at Tandem, who did not have the authority to execute the agreement without approval of their superiors. He claims that more senior executives of both corporations engaged in extensive negotiations in efforts to reach the Agreement, including the Vendor Services Agreement and technical development issues.

One of defendant’s Senior Vice Presidents states that in July 1997, after the agreements with Tandem were finalized, he was approached by another Senior Vice President, who recommended that plaintiff’s compensation for the deal be adjusted, as provided for in her compensation plan, to reflect her limited amount of participation in negotiating the contract. Defendant concedes that this was done, as it is defendant’s position that LEVITT did not negotiate and bring about the execution of the entire deal.

Plaintiff also seeks compensation for commissions earned on an agreement between defendant and Digital Equipment. Defendant opposes contending that no such deal was ever agreed to or finalized between them. Plaintiff claims that the defendant did in fact enter into an agreement with Digital in May, 1996, to which she is entitled to commissions earned.

Defendants claim that plaintiff was provided a copy of the Sales Compensation Plan Fiscal Year 1998, and signed a written acknowledgment of same. That 1998 Plan states that there is no guarantee for employment and notifies the employees that the terms and conditions of the Plan may be changed by the defendant from time to time. Further, it states that the Executive Vice President of the defendant for sales or the Senior Vice President responsible for North American Sales are responsible for decisions concerning interpretation of the terms of the Sales Plan with respect to earning and paying commissions. The Plan states that with respect to the calculation of commissions, the Plan “generally” provides that commissions are calculated by multiplying the commission percentage rate applicable to the transaction as specified in the compensation plan of the relevant individual by the Net Gaap Value “NGV” attributable to the particular commissionable sales transaction. The Plan also notes that there are certain commissions on non-standard or special payment plans which may require “special rules” “applied by CA in its sole discretion.” (Cross Motion, Exh. F) The Plan specifically states that in such situations “Commission Advances will be calculated and paid on ‘NGV’ as determined by CA in its absolute discretion.” Defendant argues that in this instance, plaintiff earned the commissions sought on a non-standard agreement and therefore CA was entitled to use its absolute discretion to determine the sum she earned.

The Court has reviewed the submissions of both parties and determines that neither party has established that they are entitled to summary judgment in its entirety. It is clear that there are questions of fact in dispute with respect to whether the plaintiff earned commissions on alleged agreements between defendant and Tandem and Digital, and if so, there is a question of what that commission should be in light of the plaintiff’s individual contract and the company’s Sales Compensation Plan. A trier of fact would have to make a determination on the credibility of witnesses on these issues. The Court cannot make such determinations on the motion for summary judgment before it.

The Court does, however, find that the Second, Third, Fourth and Sixth causes of action should be dismissed pursuant to CPLR ?§3212, and grants defendant’s motion to dismiss those claims. The Court finds that there are no triable issues of fact in dispute. The plaintiff has failed to offer any evidence of a “kick back” scheme to support her second cause of action, nor has she offered proof that she was fraudulently induced to work for the defendant by statements in its Sales Compensation Plan, which she admittedly did not receive until after she accepted employment with the defendant. Thus, her second and third causes of action based on those claims are dismissed. Further, plaintiff’s claims of fraud in her Fourth cause of action based on the Sales Compensation Plan are also dismissed. Tierney v. Capricorn Investors, L.P., 189 A.D.2d 629 (1st Dept. 1993). Finally, the Court agrees with the defendant that the plaintiff’s sixth cause of action seeking recovery on a quantum meruit basis must also be dismissed. In this instance, clearly there are contracts in effect which govern the question of what if any commission was earned by the plaintiff. The existence of such express written agreements precludes recovery on a quasi-contract theory. Tierney, supra; Alter v. Bogorican, 1997 U.S. Dist LEXIS 17369 (SDNY 1997).

The remaining portions of the motions of both parties are Denied. This matter is hereby deemed certified as ready for trial. Both parties are hereby directed to be ready for trial on March 11, 2002. Plaintiff is directed to file her Note of Issue on or before March 1, 2002 or face dismissal pursuant to CPLR ?§3216.

It is, So Ordered.