Bernice Leber and Jennifer Bougher recently secured a major victory on behalf of Arent Fox clients Moses Marx, the chairman of the board of directors of GF Health Products, Inc. and the corporation, when the New York County Supreme Court dismissed all claims by the plaintiff as against Mr. Marx. The case was featured as the leading commercial case in the March 31 edition of the New York Law Journal.

Plaintiff, the former CEO of GF Health Products, Inc., sued Mr. Marx and the corporation, alleging he was owed salary and stock for past compensation. Plaintiff’s main theory was that his written employment agreement had been renewed from year-to-year following its expiration, under the Cinefot Int’l Corp. v. Hudson Photographic Indus., Inc., 13 N.Y.2d 249, 252-53 (1963) line of cases from the New York Court of Appeals. Plaintiff’s complaint contained thirteen separate claims for relief, including myriad contract, tort and equitable claims against Mr. Marx individually for breach of contract, breach of personal guaranty, violations of New York Labor Law, conversion, promissory estoppel, tortious interference with contract, and unjust enrichment.

Arent Fox moved, on behalf of Mr. Marx, to dismiss all thirteen causes. Granting the motion, the court dismissed all of them, adopting the legal arguments advanced by Mr. Marx, and relying primarily upon the New York Court of Appeals’ recent decision in Goldman v. White Plains Ctr. for Nursing Care, LLC, 11 NY3d 173, 176 (2008), which held that the presumption in favor of a year-to-year renewal of an employment contract does not apply to an employee, here plaintiff, whose written employment agreement had expired and was required to but did not procure a further written agreement in order to modify or extend its term. The court noted, inter alia, that the plaintiff “has no claim against Marx” for unjust enrichment; that “[t]here is a fundamental problem” with Plaintiff’s promissory estoppel claims; that Plaintiff’s “complaint, moreover, fails to allege a sufficient basis for piercing GF Health’s corporate veil”; and that there is “no basis for asserting claims against a corporate officer or director for the corporation’s alleged violations of Article 6 of the Labor Law.” To read the court’s full 12-page order, please click here.

The decision was an unqualified success for Mr. Marx not only because all claims against him were dismissed, but because Arent Fox was able to achieve this result prior to any answer, depositions or other discovery in the case, thereby saving the client the enormous burden and expense of litigation.