Hardy and Novikoff Secure Summary Judgment and Dismissal for Accounting and Tax Firm Client

December 9, 2020 | Commercial Litigation

Tamika Hardy and Ken Novikoff successfully secured summary judgment on behalf of our client, an accounting and tax firm that prepares personal, corporate and business tax returns and provides tax planning services. The judgment holds the defendant,  a former employee of the firm, liable for his violation of  a Confidential Nonsolicit and Noncompete Agreement (CNNA) during his employment and after he left to start his own business. The judgment also dismisses the defendant’s counterclaims for unpaid commissions.

In its original complaint, the plaintiff accounting firm asserted, inter alia, causes of action based on breach of the CNNA and violation of the faithless servant doctrine. Following a protracted appeal relating to the plaintiff’s amended complaint and initial motion for summary judgment, the defendant served an answer to the amended complaint, which belatedly asserted counterclaims of breach of contract and New York Labor Law §191 based on purported unpaid commissions. Plaintiff moved for summary judgment, and Defendant cross-moved for summary judgment on his commission claims and to dismiss Plaintiff’s declaratory judgment claim. Plaintiff subsequently moved to amend its reply to the defendant’s counterclaims assert a statute of limitation defense to Defendant’s commission counterclaims.

The court found, inter alia, that the “plaintiff has submitted overwhelming evidence that prior to his resignation as well as thereafter and even following this court’s temporary restraining order, the defendant violated his agreements with the plaintiff repeatedly by setting  up his own business while employed at the plaintiff firm, at times using the plaintiff’s resources to his advantage and interfering with them insofar as they serviced the plaintiff and its clients… defendant removed plaintiffs proprietary property, diverted and solicited its clients while he still worked there as well as afterwards” and that “the defendant’s misconduct rose to a level far beyond that permitted to set up one’s own business” and granted the plaintiff summary judgment on its claims of breach of contract and faithless servant and denied the defendant’s cross-motion for summary judgment and to dismiss. The Court also found that the defendant’s unpaid commission claims  do not relate back to his original answer because the defendant neither previously asserted the unpaid commission claims nor did he plead any facts that gave notice of the unpaid commission claims. Moreover, the Court granted the plaintiff’s motion to amend its reply to the defendant’s counterclaims and dismissed the counterclaims based on its statute of limitation defense. The issue of the amount of damages to which the plaintiff is entitled will be determined at a hearing February 2021.

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