Summary Judgment and Breach of Contract

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The Supreme Court of New York County recently heard a Motion for Summary Judgment (MSJ) in the case of Barak v. Jaff. This case involved several elements of an action for breach of contract, and arguably a relatively one-sided factual background favoring the plaintiff – yet the educational point of this case was the evidentiary issues and standard in the plaintiff’s MSJ.

Motion for Summary Judgment – Background and Legal Standard

In New York, when the plaintiff files a lawsuit via a document known as a “complaint,” the defendant must file a response, known as an “answer.” The complaint and answer serve as vehicles for each party to make or plead their case; indeed, these documents may collectively be known as “pleadings.”

The pleadings contain allegations and often stipulations or admissions of things each party does not wish to contest. After the pleadings are made, each party has a chance to file a motion for judgment on the pleadings. This form of motion only tends to work if one side has made a (legal) mistake, most commonly where a plaintiff has failed to state a valid cause of legal action (e.g. suing defendant for conduct that is actually legal) or where the defendant inadvertently admits to wrongdoing.

After this stage, the case moves to “discovery.” This is a subject about which many books could be written, but it is basically an opportunity for each side to find out what the other side knows about the facts of the case.

Two of the main aspects of discovery: the opportunity to interview witnesses and the ability to demand documents from the other side. When discovery is concluded, there is one more opportunity to win the case before trial, and that is via an MSJ. This form of motion argues that the facts are so compelling, the record so clear, the other party so guilty that no reasonable person could find otherwise.

In effect, an MSJ is an attempt to make a case so compelling the judge is “forced” to rule in one’s favor. The legal standard is quite simple: the judge is required to view all the facts and allegations in the light most favorable to the non-moving party. In other words, success via MSJ is rare and happens only if there is no material (or triable) issue-of-fact.

Background of the Case

The Plaintiff was a physical therapist and the Defendant a doctor. The two of them had an oral agreement whereby the Plaintiff would perform physical therapy (PT) on the doctor’s patients. After a problem-free relationship, a dispute arose because the Defendant wasn’t paying the Plaintiff. During discovery, there was a lot of back and forth about the exact terms of the oral contract (including the actual rate of pay) and also various contingencies, such as the Defendant’s claim that the Plaintiff receiving payment was contingent on debt collection from patients.

The Defendant seemed rather disorganized. Despite generating several documents regarding payment, the Defendant claimed that accounting issues and other factors prevented these documents from being accurate calculations of the exact amount owed to the Plaintiff. Instead, these documents were general estimates that needed further work to be made accurate. The Plaintiff of course claimed these documents were accurate, in that they reflected a minimum amount owed. The Plaintiff filed an MSJ, asking for approximately $16,000—the amount reflected in some of the Defendant’s documents.

Analysis of the Case

The court illustrated how the MSJ standard gets applied. First, by reading the pleadings and motions of both parties, the court found that a valid oral contract existed and had been breached. The most important factor in this determination was that the Defendant had not specifically denied that this contract existed or that this contract had been breached by nonpayment.

Next the court examined the issue of damages. The Defendant disputed the dollar amount written on her own documents. By applying the most favorable to the non-MSJ movant standard, the court found that an issue of fact existed as to the actual dollar amount owed, also the exact terms of the oral contract. Thus, the Plaintiff’s MSJ was granted only to the extent of liability, but not to damages. In practice, this meant that the Defendant was judged guilty of breach of contract, but that the case would have to move forward to trial to settle what the exact terms of contract were and how much was owed.

The takeaway message was that one should always use written contracts when employment is concerned, or risk not being paid for the years it may take to win a breach of contract case.

Please don’t hesitate to contact our office for a consultation if you have questions about breach of contract.