Pernet v. Peabody Engineering Corp.

Memorandum by the Court. 'The motion, made pursuant to rule 3211 (subd. [a], par. 7) of the Civil Practice Law and Rules, was addressed solely to the sufficiency of the complaint insofar as it purports to state a cause of action to recover damages in connection with the termination of the plaintiff’s employment by Power Bilt Corporation (herein referred to as “Power Bilt 2nd”). Special Term held that the complaint sufficiently stated a cause of action on theory of breach of defendant’s obligation to act in good faith and do nothing that would destroy one of the considerations underlying all of the agreements between the parties. We agree that, under the doctrine of liberal construction to be afforded pleadings under the Civil Practice Law and Rules, this complaint does state a sustainable cause of action on such theory. The pleading adequately sets forth the agreements between the parties, including an agreement whereby Power Bilt 2nd, a wholly owned subsidiary of defendant, was to employ plaintiff for a period of five years at a stated salary plus commissions, and the defendant’s agreement to guarantee the payment to plaintiff of the amounts provided for under the terms of the said employment; and that plaintiff has duly performed the terms of the employment agreement on his part. It is further alleged that “ defendant broke and violfited the agreements ” and failed to perform the same in that “ (b) the defendant by its negligence, abandonment, willful and careless mismanagement, by its omissions and commissions, terminated and caused to be terminated the business of ‘Power Bilt 2nd’, terminated and caused to be terminated the employment of the plaintiff and caused the cessation of all benefits due and payable to the plaintiff under the terms of the aforesaid employment agreement, [and] (e) the defendant failed, neglected and refused to use its best efforts or reasonable care in the control, management and operation of the affairs of ‘ Power Bilt 2nd ’ and wilfully, negligently and carelessly acted in violation of the plaintiff’s rights and contrary to the intent and meaning of the agreements among the parties.” Since the plaintiff has duly pleaded the agreements between the parties, due performance on plaintiff’s part, the acts and conduct on the part of the defendant claimed to constitute a breach of the agreements, and plaintiff’s general 782 damage alleged to have been occasioned by the breach, we conclude that the complaint here is “ sufficiently particular ” in its statement of facts to give “notice” of the “transactions or occurrences” intended to be litigated and the “material elements” of plaintiff’s cause of action. (See CPLR 3013; Foley v. D’Agostino, 21 A D 2d 60.) The vagueness or eonelusory nature of certain of its allegations are not such as to render this particular complaint insufficient (see Foley v. D’Agostino, supra); and further particularity as to plaintiff’s alleged cause of action may be obtained by a demand for a bill of particulars or by means of disclosure proceedings. The defendant contends that the termination of plaintiff’s employment was due to the insolvency and bankruptcy of Power Bilt 2nd and that, under the terms of an agreement between the parties, a copy of which is annexed to the moving papers, the defendant’s guarantee was to be effective only in the event that the business of Power Bilt 2nd was terminated or was caused by defendant to be terminated “while in a solvent condition”. It is to be noted, however, that the defendant’s motion is limited expressly to an attack upon the sufficiency of the pleading as such and that we are not here concerned with the merits of the alleged cause of action. If, as alleged in the complaint, the termination of the business of Power Bilt 2nd and the termination of plaintiff’s employment were in fact brought about by defendant’s acts in disregard of the intent and meaning of the agreement between the parties, the plaintiff may recover. Implicit in the agreements between the parties, as is generally the case in all contracts, there existed an implied covenant of good faith and fair dealing. “It is implied that neither party will do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.” (See 10 N. Y. Jur., Contracts, § 203 and eases cited.) Whether or not the acts of the defendant here were in such bad faith or in such willful or negligent disregard of the rights of the plaintiff as to constitute a breach of this implied covenant will depend upon the facts which may be presented to the court on a motion for summary judgment or on the trial and is not properly to be determined at this time. It is true that if, as apparently contended by defendant, the insolvency of Power Bilt 2nd occurred in the ordinary course of the management of its business, then there would be no liability on the part of the defendant for breach of the implied covenant. On the other hand, if the bankruptcy or other termination of the affairs of Power Bilt 2nd was brought about by defendant with intent to deprive plaintiff of its rights under the agreements to which defendant was a party; or, if the same was brought about by conduct of the defendant in such reckless or neglectful disregard of plaintiff’s contract rights as to justify an inference of bad faith; then, the defendant would be liable to plaintiff for breach of contract. Generally, in every ease, the question would be one of fact. (See 10 N. Y. Jur., Contracts, § 203; 3 Corbin, Contracts, §§ 570, 571; Tuttle v. Grant Co., 6 N Y 2d 754; Kirke La Shelle Co. v. Armstrong Co., 263 N. Y. 79; Genet v. President, etc. Del. & Hud. Canal Co., 136 N. Y. 593; Mason v. Standard Distilling & Distr. Co., 85 App. Div. 520; Goldberg 168-05 Corp. v. Levy, 170 Misc. 292; Wessel v. Crosse & Blackwell, 152 Misc. 814; Biel v. Crosse & Blackwell, 147 Misc. 718; Columbus Trust Co. v. Moshier, 51 Misc. 270, affd. 121 App. Div. 906, affd. 193 N. Y. 660.)