.L SHORT FORM ORDER Present: ELLEN LEVITT, SUPREME COURT - STATE OF NEW YORK HON. GEOFFREY J. O CONNELL Justice TRIAL/IAS, PART 10 NASSAU COUNTY, -. -against- Plaintiff(s), INDEX No. 586/00 COMPUTER ASSOCIATES INTERNATIONAL, INC., MOTION DATE: 4/3/02 Defendant(s). MOTION SEQ. No. 11 The following papers read on this motion: Notice of Motion/Verified Complaint/Attachments/Exhibits A-C Affidavit in Opposition Affirmation in Reply/Exhibits A Plaintiff applies to the Court for an Order pursuant to CPLR 4404(a) to set aside a jury verdict in the Defendant s favor rendered on March 18,2002. Defendant opposes. Simultaneously, the Court addresses an offer of proof it required of Plaintiff with respect to the remaining Cause of Action in the complaint. Background Defendant Computer Associates hired Plaintiff Levitt on or about April 29,1996. Originally she was assigned to the Channel Sales Organization as a salaried employee with a discretionary bonus of up to $100,000 where she worked on Defendant Computer Associates strategic alliance with Digital Equipment Corporation. In her offer of proof Plaintiff alleges that she created a plan for utilizing Digital s technicians in selling Computer Associates software. She also developed contacts with key Digital personnel. In the Fall of 1996 Plaintiff was reorganized into the Global Sales Alliance Group doing much the same work but on a world-wide scale.
Levitt v Computer Associates International, Inc. The events litigated at trial began to unfold on April 27, 1997, when Plaintiff was Tandem Computers account. The following excerpt from the Court and some of the Parties contentions: By memorandum dated May 29, 1997, COMPUTER ASSOCIATES informed ELLEN LEVITT that effective April 1, 1997 she was to receive an annual salary of $60,000 and Incentive Compensation at a Rate of 4.5%. COMPUTER ASSOCIATES INTERNATIONAL published a Sales Compensation Plan, Fiscal Year 1998, April 1, 1997 to March 3 1,1998. Together the Memorandum ofmay 29,1997 and the Sales Compensation Plan provide the terms of the incentive compensation part of the employment agreement. Plaintiff ELLEN LEVITT alleges that while the 1997 Incentive Compensation plan was in effect she produced a sale of computer software to Tandem Computers having a gross value $40,000,000.00 which, after application of Tandem Computers discount and other costs produced revenue of $1,500,000.00 on June 30, 1997; $2,166,667.00 on Jan. 1, 1998; $2,167,667.00 on Jan. 1, 1999; and $2,166,666.00 on Jan. 1, 2000. The net value of this transaction to COMPUTER ASSOCIATES for sales accounting purposes was calculated to be $6,595,962.00. PlaintiffEllen Levitt claims that pursuant to the Sales Compensation Plan she earned a vested and mandatory right to receive as compensation a total of approximately $296,820.00 of which only $67,500.00 was paid. She claims she is entitled to receive the balance. Defendant COMPUTER ASSOCIATES agrees that the sale took place and that the net value of the sale for sales accounting purposes was calculated to be $6,595,962.00. COMPUTER ASSOCIATES asserts, however, that under the sales incentive portion of the employment agreement, it had discretion to determine the appropriate amount of any sales incentive award by adjusting the NGV and that its decision was final and binding. Section 7 ( Compensation ), Paragraph B ( Commissions ), subparagraph (5) ( Non-Standard Payment Plans) stated that; (a) If the License Agreement provides for a non-standard payment option (a payment option other than standard GO through G7, or A8 or AO) or a nonstandard transaction, Commission Advances will be calculated and paid on NGV [Net Generally Accepted Accounting Principles Value] as determined by [Computer Associates] in its absolute discretion. NGV and the timing of payment of advances, if any, may be adjusted upon consideration of all circumstances by [Computer Associates]. The uncontradicted evidence at trial established that the transaction for which Ellen Levitt was claiming commissions over and above what she had been paid by Defendant involved a nonstandard payment option. 2 reassigned to the s jury instruction, recites pertinent facts,!
Levitt v. Commuter Associates International, Inc. The Court construed the above quoted provision with respect to commissions as presenting two issues for jury determination: (1) was the adjustment to the NGV in Plaintiffs case made by a person with authority to make it under the Sales Incentive Plan; and (2) was the adjustment made for reasons related to the transaction. To be entitled to damages under the jury instructions, Plaintiff had to satisfy the jury that the adjustment was either unauthorized or made for reasons unrelated to the transaction. The jury resolved both issues in the Defendant s favor. New Trial Plaintiff contends that the Court erred in ruling as a matter of law that the agreement between Computer Associates and Tandem Computers involved a nonstandard payment. His argument rests upon the testimony of Richard Ruggiero who testified that the deal was in many respects standard. However, Ruggiero s testimony was not addressed to the specific question whether the payment plan was standard or nonstandard. Plaintiff made no effort to prove that the payment plan was standard. Finally, the Plaintiff was presented with a printed copy of the Court s charge at the charge conference and took no specific exceptio to the Court s instruction; No one contends that the transaction between Computer Associates and Tandem Computers from which Plaintiffs claims derive involve any one of the standard payment options. (C $4110-b). The Digital Claim Prior to trial, two ofplaintiff s six original causes of action survived, the others having been dismissed on Defendant s motion for summary judgment. (Levitt v Computer Associates, Index #586 of 2000, dec. Feb. 5, 2002). The First Cause of Action involved the transaction between Computer Associates and Tandem Computers. The Sixth Cause of Action involved Computer Associates and Digital Equipment. Plaintiff worked on these transactions at different times with the Tandem transaction being memorialized in a contract 3
Levitt v. Computer Associates International, Inc. while the Digital transaction was at least nominally rejected. The Court, without objection, determined to try the causes of action separately proceeding first with the Tandem claim. The Court also cautioned Plaintiff that the Digital claim was problematic in that no contract or purchase order resulted. According$, it required a written offer of proof with respect to the Digital claim. In that offer of proof it is alleged that prior to April 27, 1997, Plaintiff created a to plan use Digital technicians who were being trained by Computer Associates on its software to promote sales of that software. It is undisputed that prior to April 27,1997, Plaintiff was a salaried employee who could be paid discretionary bonuses up to $100,000 annually, but who was not entitled to commissions under the Sales Compensation Plan. 76 The offer of proof alleges that Plaintiff was reassigned to the Digital account in July of 1997 at which time she was covered by the Sales Compensation Plan. At some point thereafter, Plaintiff asserts that she made a proposal for an inventory deal with Digital analogous to that which had been worked out with Tandem. During trial it was established that one of Computer Associates officers and principals, Charles Wang, had a close personal relationship with the President and CEO of Tandem Computers and that they were anxious to have the two companies work together. There was apparently no such relationship with Digital Equipment Corporation. According to Plaintiff, the proposed inventory deal with Digital was rejected because Digital was a difficult partner. Plaintiff contends that Computer Associates thereafter continued to do business with Digital Equipment; for the same software, closing the deal in segments, and it is believed through the same services division, subsequent to refusing the deal brought by Plaintiff. She does not detail any evidence in support of these claims. An employer who proposes to reward one or more employees beyond their agreed upon wage has the right to fix the terms under which the bounty becomes vested and absolute. (Hall v United Parcel Service, NY2d 27, 36-37 (1990)). Where an employer establishes a plan for the payment of bonuses or commissions, the employee s entitlement to such compensation is governed by the terms of the employer s plan. (Truelove v Northeast Capital & Advisory, 95 NY2d 220, 225 (2000)). Here, the Plaintiffs proposal for an inventory deal was rejected and Plaintiff cites no terms of the Incentive Compensation Plan which would entitle her to a commission on a rejected proposal. The fact that Computer Associates continued to do 4
Levitt v. Computer Associates International, Inc. business with Digital is of no moment. They had a relationship before Plaintiff was assigned to ;he account, while she was a non-commission employee and while she was assigned to the Tandem account. Plaintiff is only entitled to receive such payments as she acquired a right to receive under the terms of the plan (Tuttle v Geo. McQuesten Co., 227 AD2d 754 [3d Dept, 19961; see, Cohen v Lord, Day & Lord, 75 NY2d 95, lol- 102). Here, Plaintiff has failed to demonstrate how she would be entitled to commissions on a rejected proposal under Computer Associates Incentive Compensation Plan. The motion is denied and the Fifth Cause of Action is dismissed. It is, SO ORDERED.. O CONNELL, J.S.C.