Meltzer Lippe Goldstein & Breitstone LLP v. Malfetti ( 2019 )

18-2982
Meltzer Lippe Goldstein & Breitstone LLP v. Malfetti
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
25th day of September, two thousand nineteen.
Present: ROSEMARY S. POOLER,
BARRINGTON D. PARKER,
REENA RAGGI,
Circuit Judges.
_____________________________________________________
MELTZER LIPPE GOLDSTEIN & BREITSTONE LLP,
Plaintiff-Counter-Defendant-Appellant,
v. 18-2982-cv
JAMES MALFETTI, DBA Management Recruiters of Union County, NJ,
Defendant-Counter-Claimant-Appellee.
_____________________________________________________
Appearing for Appellant: Robert M. Calica, Rosenberg Calica & Birney LLP, Garden City,
NY
Appearing for Appellee: Randall L. Rasey, Barton LLP (Roger E. Barton on the brief) New
York, NY
Appeal from the United States District Court for the Eastern District of New York (Hurley, J.)
ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of said District Court be and it hereby is AFFIRMED.
Meltzer Lippe Goldstein & Breitstone, LLP (“Meltzer” or “Meltzer Lippe”) appeals from
a judgment of the district court holding that Meltzer had breached a fee agreement with James
Malfetti, d/b/a Management Recruiters of Union County, NJ (“MR”), a search and recruiting
company engaged by Meltzer to place attorneys at its firm. The district court, following a trial to
the bench, found that the breach occurred when Meltzer refused to pay MR after Meltzer partner
David Heymann purchased Kern Augustine Conroy & Schoppmann, PC, a health care law firm
introduced to Meltzer at its request by MR. We assume familiarity with the underlying facts and
procedural history of the case. We review the district court’s findings of fact for clear error and
its legal conclusions de novo. Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42,
51-52 (2d Cir. 2011).
The district court found that the fee agreement was an enforceable contract between
Meltzer and MR for the placement of attorneys with Meltzer. Meltzer, Lippe, Goldstein &
Breitstone, LLP v. Malfetti, 2018 WL 4627667, at *10 (E.D.N.Y. Sept. 27, 2018). The district
court noted that Dawn Laffin, CFO and COO of Meltzer, had solicited Joshua Ben-Asher, a
recruiter at MR, to place attorneys with Meltzer. Id. Laffin and Ben-Asher discussed and
finalized a fee agreement, a section of which addressed “Placement Fee for Group Placements,”
where “a Group is defined as two or more attorneys from the same law firm” placed with
Meltzer in the course of a single transaction. Id. at *2. The district court also found that the fee
agreement contained a provision stating that if Meltzer engaged attorneys introduced by MR
through an “affiliate,” rather than hiring them directly, the fee agreement would still apply. Id at
*2, *11. The district court reasoned that Heymann, as a Meltzer partner, fell “comfortably within
2
the plain meaning of the word ‘affiliate.’” Id. at *11. The district court also found that
subsequent to the Kern transaction, Meltzer “managed, controlled,” “exploited,” and “assumed
operational management” of Kern. Id. Moreover, a press release publicized the Kern transaction
“as the formation of an ‘alliance’ between Kern Augustine and Meltzer Lippe.” Id. at *5, *11.
These findings led the district court to conclude that the fee agreement obligated Meltzer to pay
MR a placement fee for the Kern attorneys. Id. at *12. We identify no error in these findings or
conclusions.
On appeal, Meltzer argues that the fee agreement did not apply to the Kern transaction
because it was the sale of a business, not the placement of attorneys. We are not persuaded. The
fee agreement encompassed the Kern transaction regardless of how the transaction is
categorized. As the district court correctly noted, the fee agreement contains a group placement
provision, which applied if Meltzer acquired two or more attorneys from the same law firm, as
was the case in the Kern transaction. Specifically, the contract provides that MR’s fee “is
payable should [Meltzer] or [its] affiliate engage [the] candidate for any position within one year
after our most recent communication relating to such candidate.” App. at 447. As we have
already noted, the district court did not err when it found that Heymann was an “affiliate” of
Meltzer.
Meltzer argues that because Heymann purchased Kern as a “personal investment,” the
transaction was not covered by the agreement. However, as noted by the district court, Ben-
Asher introduced Kern, not to Heymann but to Laffin, after the latter had requested that MR
search for a “[h]ealth care boutique firm or dept” to add to the Meltzer firm. Meltzer, Lippe,
Goldstein & Breitstone, LLP, 2018 WL 4627667, at *3. Indeed, Laffin and Meltzer’s chairman
were actively involved in the negotiations for Kern. But only after Meltzer determined that for
3
legal reasons it could not purchase Kern directly did it arrange for Heymann to purchase the
practice. In fact, the Kern transaction was announced to the public via press release as an alliance
and partnership with Meltzer. Id. at *5. Kern and Meltzer attorneys subsequently worked in the
same offices, and at least one Kern attorney performed cross-firm work even after being
transferred to Meltzer. The fact that after MR introduced Kern to Meltzer the latter restructured
its purchase of Kern as a stock purchase by a Meltzer partner does not alter the fact that MR
performed exactly the services for which it had been retained by Meltzer, thereby obligating
Meltzer to pay under the agreement. We see no error in the district court’s finding that the fee
agreement applies to the Kern transaction regardless of whether it can be characterized as the
sale of a business rather than an “attorney placement.”
Meltzer’s further argues that the fee agreement with MR had expired before the Kern
transaction. “[I]t is a well-established general rule that an appellate court will not consider an
issue raised for the first time on appeal.” Bogle-Assegai v. Connecticut, 470 F.3d 498, 504 (2d
Cir. 2006) (internal quotation marks omitted). Meltzer did not raise this argument before the
district court. Instead, the party argued below “that it did not enter into a binding agreement with
Management Recruiters” and that even if it did, “the agreement is not enforceable under the
statute of frauds.” Meltzer, Lippe, Goldstein & Breitstone, LLP, 2018 WL 4627667, at *9. But
even setting aside this issue, the argument is meritless. Significantly, during the Kern
negotiations Meltzer gave no indication to MR that it believed that the agreement had expired.
To the contrary, Laffin testified that when she asked MR to find a health care practice group, she
believed that the request would fall under the fee agreement. Moreover, Laffin paid MR for a
placement based on the same fee agreement while the Kern negotiations were ongoing. In short,
4
the record evidence defeats Meltzer’s argument that the fee agreement had expired. Thus, we see
no error in the district court’s findings or conclusions.
Accordingly, the judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
5