In an October 20, 2011 decision by Justice Demarest addressing the defendants’ motion to dismiss, the court upheld the majority of the plaintiff’s complaint predicated on the defendants’ alleged failure to pay Trader Commissions owed to the plaintiff during the course of his employment as a portfolio manager. The court rejected the defendants’ argument that the commissions constituted a discretionary bonus under the employee handbook, upon finding that the gravamen of the claim was that the defendants breached an oral contract to pay the commissions as part of plaintiff’s compensation package, which was properly pled as a claim for breach of contract. The court upheld the claims sounding in quantum meruit, because whether there was a bona fide oral contract was in dispute and, therefore, the plaintiff was not required to elect his remedies. The court also upheld the plaintiff’s claims for violation of Labor Law § 191(2) because, it concluded, if there was a valid oral contract providing for payment of a nondiscretionary Trader Commission, those commissions could satisfy the statutory definition of “wages” and support the claim. The court also found that the plaintiff stated a claim for breach of fiduciary duty by alleging that the defendants failed to pay him dividends owed a shareholder. However, the court dismissed the derivate claim for breach of fiduciary duty asserted against the CEO and Chairman of the Board of Directors, alleging that he misappropriated corporate funds, engaged in self-dealing, and diverted corporate assets. Noting the strictly enforced BCL § 626 requires a plaintiff asserting a derivative claim to be a shareholder at the time he brings the action, the court found that the plaintiff was stripped of his shareholder status when the defendant repurchased his shares and this lacked standing.
Zentz v International Foreign Exch. Concepts, L.P., Sup Ct. Kings County, October 20, 2011, Demarest, J, Index No. 229542/10