Best of NYSBA

By Joel A. Rose

Personal goal setting has become a popular and effective management tool that has been implemented by partners and associates in many of the more financially and professionally successful law firms.

Properly conceived and implemented, the personal goal setting process allows attorneys - individually and in concert - to tailor their personal and professional activities to enhance their performance and to progress the firm in the future. The planning process will foster communications between attorneys and lawyer management and create a sense of "ownership" and common direction. Further, properly implemented, the individual planning process will build "emotional and financial equity" between the attorneys and the firm, as opposed to only financial equity.

Although personal goal setting should by definition be individualized, it must of course align with the needs and culture of the organization. Every firm should therefore reflect on the qualities that its lawyers must embody to achieve success. These qualities will differ from firm to firm.

Preparation and Use of Personal Plans

Personal business plans can be introduced most easily and effectively in firms whose compensation systems have sufficient flexibility to recognize each individual's total contribution to the firm. By contrast, it is difficult to achieve maximum benefit from personal work plans in firms that have lockstep or other seniority-based compensation systems.

Procedurally, the first step in creating a personal business plan is performed by the partner, who completes a goal-setting form using approved guidelines (see below, Tips for Creating a Partner's Customized Model and Plan). This requires the partner to develop personal goals, and also promotes a sense of proprietorship. The completed form is sent to the managing partner or to the partner's practice group chair for review. The managing partner or the practice group chair meets with the partner to discuss the model, consider alternatives, and eventually approve the model.
The planning exercise itself requires partners to think about both their targeted individual production and the nonbillable activities they wish to pursue. In effect, the completed personal plan defines a partner's commitment to the firm for the coming year and establishes guidelines for accountability.

The plans for all attorneys in each practice group are reviewed and approved by the practice area chair, the department head (if applicable), and finally by the managing partner. Members of the firm's Management Committees are given copies of all models. Department heads have copies of all the models of partners in their respective departments. Practice group chairs have copies of all the models of partners in their respective practice groups.

When discussing plan-performance discrepancies with individual partners, managers should consider amending their plans as well as their behavior. Plan amendments should not be a common practice, but there may be situations where an adjustment is warranted; this helps eliminate surprises at year-end.

In addition to these quarterly reviews, firm managers should meet with each partner annually to discuss and approve the partner's performance model for the next year.

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By Heath J. Szymczak, Esq.

Kosowsky, et al. v. Willard Mountain, Inc., et al.¸--- N.Y.S.2d ----, 2011 WL 5984277, 2011 N.Y. Slip Op. 08709 (3d Dept. December 1, 2011) presents some interesting issues involving the interplay between fraud and contract claims, as well as the potential slippery slope created when seeking to hold a corporate officer personally liable for an alleged breach of contract by a corporation.

Defendant Willard Mountain, Inc. is a corporation which operated a ski resort upon land owned by the plaintiffs. Plaintiffs leased the property to Defendant under a lease which provided for: (i) computation of rental payments as a percentage of Defendant's sales and income, (ii) required Defendant to provide plaintiffs with an annual accounting, and (iii) prohibited assignment or subletting without plaintiffs' consent. Defendant's owner also operated a separate company offering concessions services at the ski area.

Plaintiffs claimed that Defendant had been paying less than the full amount of rent due under the lease because its president (and owner) had packed down its annual income through "slick" bookkeeping, thereby resulting in lower rental payments. Defendant claimed that the rental amount paid was proper because its own income was a function of the income received by the concessions company pursuant to a separate agreement (which had never been disclosed to the plaintiffs). Plaintiffs claimed that this agreement with the concession company violated the lease's prohibition against assignment. Plaintiffs asserted seven causes of action, including breach of contract and fraud, as well as claims against defendant's owner (individually) and against the concessions company.

Defendants moved to dismiss all the claims (except the breach of contract claim) for failure to state a cause of action under CPLR § 3211(a)(7), and to dismiss all the claims as time-barred under CPLR § 3211(a)(5) (or at least cap the recoverable period). Plaintiffs cross-moved for leave to file an amended complaint.

The Supreme Court granted defendants' motion pursuant to CPLR § 3211(a)(7), in part, by dismissing the causes of action (i) seeking an accounting, (ii) alleging unjust enrichment, and (iii) alleging breach of the implied covenant of good faith and fair dealing. The Supreme Court also held that the claims were not time-barred, and granted plaintiffs' motion for leave to amend their complaint. Defendants appealed and plaintiffs cross-appealed.

Fraud Claim Not Duplicative Of The Cause Of Action For Breach Of Contract
Defendants argued on appeal that the Supreme Court erred in failing to dismiss plaintiffs' fraud claim because: (i) it was duplicative of the cause of action for breach of contract and (ii) it failed to contain allegations of justifiable reliance and special damages.

Generally, a misrepresentation premised directly on the same actions giving rise to a breach of contract does not give rise to a separate cause of action for fraud. Id. at *1 (citing Salvador v. Uncle Sam's Auctions & Realty, 307 A.D.2d 609, 611 (2003)). The Third Department, however, held that because of distinctions among the named parties (neither defendant's owner or the concessions company were parties to the lease) the breach of contract claim was not directed against the owner and could not be considered duplicative as to him. Further, as it was disputed that the concessions company was bound by the lease, the fraud claim against the concessions company could also proceed.

Moreover, the claim against Defendant Willard Mountain, Inc. could also proceed as plaintiffs claimed "that, after the contract was entered into, defendant [through the acts of its agent] repeatedly misrepresented or concealed existing facts" by failing to disclose the existence of the separate agreement with the concessions company and falsifying the annual income reports in order to (i) deceive them as to the true amount of rent owed, (ii) induce them to accept improperly low payments. Further, despite the absence of a fiduciary relationship, defendants allegedly breached a "duty of candor" (independent from their duty to perform under the contract) in that they had superior knowledge unavailable to plaintiffs and knew plaintiffs were relying on the information they supplied (citing Intl. Elecs., Inc. v. Media Syndication Global, Inc., 2002 WL 1897661, *2, 2002 U.S. Dist LEXIS 15200, *5-*6 (SD N.Y.2002)). The Third Department concluded that the conduct alleged in the fraud cause of action was sufficiently discrete from that underlying the breach of contract claim to state a viable separate cause of action.

Fraud Claim Not Lacking Allegations Of Justifiable Reliance And Special Damages
The Third Department also rejected defendants' contention that the fraud claim should have been dismissed for failure to plead the required elements of justifiable reliance and special damages (citing Dube-Forman v. D'Agostino, 61 AD3d 1255, 1257 (2009)). Plaintiffs alleged that they had relied upon the income figures provided by defendants in accepting the rent payments. They also claimed special damages (in addition to lost rent under the contract) as the alleged fraud prevented them from exercising their right to terminate the lease upon a breach of its terms, and thereby deprived them of other business opportunities and of the use and enjoyment of their property.

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This post was authored by Matt Lampe, Joseph Bernasky, and Jenny Ma of Jones Day. The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

2012 is the first year that private-sector New York employers must provide the annual written pay notice required by the Wage Theft Prevention Act. Although the initial passage of the Wage Theft Prevention Act over a year ago garnered significant attention, it is worth reiterating now that the February 1 deadline for provision of the annual notice is rapidly approaching and employers should use the remaining time to ensure compliance with the new notice obligations.

On December 14, 2010, then-Governor David Paterson signed the Wage Theft Prevention Act, S. 8380/ A. 11726 (the "Act"), into law in New York State, which amended Section 195 of the New York Labor Law. Joining a growing number of states with similar wage theft legislation, the Act sought to address classification of employees and payment of statutorily-mandated minimum wages and overtime, and included enhanced civil and criminal penalties for non-compliance. In effect since April 9, 2011, the requirements applies to all private-sector employers in New York.

Under the Act, every employee, whether full or part-time, whether covered by a union contract or not, and regardless of exempt status, must receive a written pay notice between January 1 and February 1 of each year, including the following information:

•the employee's rate of pay, including overtime rate of pay, if non-exempt; •the basis of the wage payment (e.g., by the hour, shift, day, week, salary, piece, commission, or other); •the regular payday; •the allowances taken as part of the minimum wage (e.g., tip, meal and lodging deductions); •the employer's official name and any other "doing business as" names; and •the address and phone number of the employer's main office or principal location, and mailing address if different.

Under the Act, the notice must be provided in English and in the employee's primary language if the New York Department of Labor ("NY DOL") offers a translation. Currently, the NY DOL offers dual language translations in Chinese, Haitian Creole, Korean, Polish, Russian, and Spanish, all of which are available here. Employers with seasonal employees on layoff between January 1 and February 1 must furnish the notice as soon as the employees return from layoff. The notice may be distributed electronically, but only if employees' receipt of the notice and acknowledgment is verifiable and if the employee is able to print a copy for their records.

In addition, the Act requires employers to obtain a signed and dated acknowledgment of the notice from each employee. Employers must retain copies of the notice and accompanying acknowledgment for six years, and provide them to the NY DOL upon request. If an employee refuses to acknowledge the notice, an employer should still give the notice and note the refusal on its retained copy. Moreover, an employee cannot waive the written notice requirement. The NY DOL can assess penalties of $50 per week per employee if a proper written notice is not provided, and employees can sue for not receiving a proper written notice with damages capped at $2,500 per employee.

With the February 1, 2012 deadline rapidly approaching, employers should take any remaining steps necessary for to meet the annual notice requirements. The NY DOL provides web-based, printable model templates for employers seeking guidance, which are available here. The Act does not require the use of these particular forms, and employers may develop their own forms so long as all the information legally required is included. The NY DOL has also published a Fact Sheet on the Act, available here, and a set of FAQs, available here.

By J. Cullen Howe

On December 27, 2011, New York City Mayor Michael Bloomberg signed into law three bills that enacted recommendations of the New York City Green Codes Task Force. The bills are aimed at carrying out long-term municipal plans to reduce carbon emissions, improve air and water quality, and limit waste.

The first bill (Intro. No. 576-A) seeks to improve protection of water and sewer systems by requiring construction sites to collect concrete washout water for proper disposal. The second bill (Intro. No. 578-A) requires that new asphalt used in the city have a minimum of 30 percent recycled content. According to the city, this requirement will save about $2.3 million per year by reducing dumping fees and avoiding costs of new asphalt and will keep more than 66,000 tons of asphalt out of landfills. The third bill (Intro. No. 592-A), requires all new heating, ventilation, and air conditioning units installed within the city to have filters that can keep out particles of 2.5 microns or more. According to the city, the bill is aimed at keeping soot from trucks and buses from entering indoor home and work environments, where people spend an estimated 90 percent of their time.

In addition, the Mayor signed two bills that address a long-running controversy over levels of polychlorinated biphenyls (PCBs) from fluorescent light ballasts, caulk, and other common construction materials in the city's school system. In January 2010, the City entered into an agreement with EPA to undertake a pilot study to develop a citywide approach to PCBs in schools. In February 2011, it announced a $708 million comprehensive energy efficiency plan to remove and replace lighting ballasts, reducing possible PCB exposure in schools and cutting annual greenhouse gas emissions by more than 200,000 metric tons. The two bills codify many New York City Department of Education practices and protocols for notifying parents and communities about PCBs and lighting fixture replacements. The first bill (Intro. No. 563-A) requires the Department to notify school community members of PCB testing results and the status of the city's comprehensive replacement plan. The second bill(Intro. No. 566-A) requires progress updates to the New York City Council and the public.

Finally, the Mayor also signed a bill (Intro. No. 720-A) to add flexibility to regulations for bicycle storage in parking garages. The bill amends a 2009 law (Local Law 51) setting aside bicycle parking spaces based on a garage's vehicle capacity.

By Caitlin Lee Dempsey

Traditional knowledge encompasses and protects the unauthorized use of images, music, and choreography, among other categories, and has become a hot topic among copyright and intellectual property lawyers. Yoga exemplifies the current controversy, which concerns Bikram Choudhury's copyrighted series of 26 yoga poses, famously to be known as "Bikram Yoga", which was registered in 2007. Choudhury designed a 9-week intensive course for aspiring Bikram Yoga teachers, encouraging them to help teach others how powerful and healing yoga may be - as long as they followed his rules (i.e. strict text, mirrors and carpets in the studio, and specific temperature, among others).

However, what happens when one of Bikram's former students opens a studio that almost follows his precise guidelines, to the former student's own benefit? Recently, Choudhury faced just that, and filed eight causes of action against the founder of Yoga to the People, Gregory Gumicio. The complaint alleged copyright infringement, trademark infringement, false delegation of origin, dilution, unfair competition, unfair business practices, breach of contract and inducing breach of contract. Choudhury's claims varied from injunction to over $1,000,000 for each allegation.

Gumicio, who entered into an agreement restricting his use of "Bikram Yoga" when he successfully completed Bikram's course, did not claim to be offering Bikram Yoga. He responded to the allegations with yogatruth.org, and argued that while copyright is limited to original works and systems, which is the category under which yoga would fall, yoga does not constitute "choreography" in the traditional sense of the word, and therefore cannot be copyrighted. While the U.S. Copyright Office has permitted yoga poses to be registered in the past, regulators recently reviewed the legislative history of copyright law and decided that exercise, such as yoga, does not "constitute the subject matter that Congress intended to protect as choreography."

Moreover, Gumicio has a different take on the agreement he signed upon completion of the course. The diploma says that he "is hereby granted rights and privileges to teach Birkam's Basic Yoga System", which Gumicio does not believe includes the drastic limitations that Choudhury is claiming.

This is not the first case Bikram has taken to court on the matter. Prior suits ended with private settlements, with the defendants agreeing not to use Choudhury's name. Choudhury also brought suit against Evolution Yoga and Yen Yoga with similar claims. Moreover, Choudhury has an ongoing battle with Take Back Yoga of the American Hindu Foundation, which demands that Yoga's Hindu Philosophy remains alive.

By Patrick T. Campbell, Esq.

Navy rear Admiral David Woods, Guantánamo Bay's new commander, has proposed new rules that might infringe on Guantánamo detainees' right to confidential communications with their defense counsel.

Woods, in a 27-page draft order, is proposing that a team of Department of Defense and law enforcement officials, the "privilege team," be allowed to conduct a security review of all communications between the five inmates accused of organizing the 9/11 attacks and their lawyers. The order, not yet publicly available, sets guidelines for when members of the "privilege team" can disclose information from legal mail to other government officials, such as when they encounter what they suspect to be "unauthorized information."

The proposed new rules have sparked a backlash from the Pentagon-appointed counsel representing the five prisoners charged in the 9/11 attacks, who say the proposed security review is unnecessary because defense counsel all have security clearances and know not to release classified information. Defense counsel claim that the new rules violate the attorney-client privilege and legal ethics, and impinge on the detainees' constitutional right to counsel. They also argue that it would be impossible for Woods to ensure information from these letters is not shared with the prosecution, because the "privilege team" is not under his command. Defense counsel received the draft order from Woods on December 22, 2011, and was given 48 hours to sign an agreement to abide by the rules. Instead, defense counsel submitted a written response stating that requiring them to abide by the rules in order to see their detainee clients is illegal.

Marine Corps. Colonel Jeffrey Colwell, chief defense counsel of the military tribunals, said he shares in defense counsel concerns, and also objects to a provision of the new rules which would limit correspondence to detainees to letters from their lawyers, and bar any supporting documents like legal motions and articles.

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By Joel Rose

How a law firm approaches the succession issue will be influenced, in part, by (a) the firm's historical governance, (b) the personal characteristics, practice development, management and interpersonal skills and professional standing of partners, and (c) partners' perceptions of the abilities, skills, talents, interests and the personal and professional agendas of other partners.

A segment of our business is derived from assisting law firms strategically plan for their orderly succession of lawyer management. As such, it has been the author's experience that the governance of most organized law firms follow four evolutionary cycles, which include:

(1) The Benevolent Dictator - This may be one or more of the founding partners or a strong domineering partner who has been appointed or anointed;
(2) Rampant Democracy - This cycle frequently follows the benevolent dictator and emphasizes the egalitarian philosophy of governance. Every partner is equal, to some extent, and is expected to "pitch-in" to do any job, and to attend every meeting and have opinions on most issues;
(3) Committee Leadership - This cycle which consists of committees and more committees, usually follows the democratic form of governance. Partners are assigned to those committees in which they may have an interest and skill or experience. Partners realize that too much attorney time is spent managing the firm and the results of their management efforts are frequently less than satisfactory. Coordinating the work of the several committees, determining who has authority to decide issues that overlap into the jurisdiction of other committees and getting committees to meet and to reach decisions are major problems;
(4) Centralized Management Characterized as Representative Democracy - This cycle is predicated upon having an executive committee and/or a managing partner, special purpose committees and partners willing to subordinate their independence, to some extent, for the benefit of the firm. Partners determine broad policy issues which are interpreted and implemented by the executive committee, the managing partner and other committees.

Read the rest of this post at Thrive.

The following remarks were presented by the Hon. John A. Michalek, a Supreme Court Justice, to new students at the University at Buffalo Law School:

I am Supreme Court Justice John Michalek. Please - first - allow me to thank Lynn Clarke and Melinda R. Saran for their very gracious introductory remarks.

On behalf of the court's - that is the judges, justices, supreme court clerks, court attorneys, staff and all the members of our court system in Western New York - I welcome you to our courthouse.

As law students, I cannot over emphasize or more strongly suggest that you take advantage of the proximity of this courthouse and your own trial courtroom at the law school - during your time as law students.

Perhaps - for many of you - in what you think or expect to be your anticipated legal specialties or endeavors - you might think - or believe - that you will not very often find yourself in an open courtroom, i.e., having to speak.

From experience - in my own as well as so many others - at this stage of legal careers, you really don't know what will come, - who knows what will come - as far as utilization of the courtrooms. Therefore, I would say and stress again - so what.

That is to say - take the opportunity in your law school careers - to develop - to the extent - you can - the skills of the courtroom. For no matter where you end up - in your personal and professional lives -this experience will serve you well.

For many of you - or for most of you - fight the instinct - that is the gut inclination to avoid getting up and speaking - at the basic level, i.e., answering questions or asking questions in the courtroom - or examining or cross-examining - putting down those notes - or legal pads and letting it rip.

The walls and barriers you feel - about getting up and speaking - are not real. Just by getting up and trying, you'll crash right through them. So do it.

It is a true test - at this stage - there is absolutely no downside - and/or is a different type of use of your intellectual skills.

Even from a student point of view - find out what it takes for direct examination, i.e. the preparation of a witness, the preparation of your subject matter - to the spontaneity, i.e. being able to think on your feet, being able to interpret and review human nature, to be effective at cross examination.

And most especially - to be able to put those notes down - pick your head up, walk away from those cards and simply speak what's on your mind. (Tear yourself away from that insecurity blanket.) Let what you have learned and what you have studied simply come out the best way you can.

Collegiality

Please allow me to speak for a few moments - in a formal tone. That is allow me to point up - something that you may know - or not know - but is known throughout the State and even elsewhere.

That is the collegiality that exists from the bar and between the members of the bar and the judiciary in Western New York. It is my hope that you will participate in this as a student, and later as counsel, attorney and even who knows after that.

Perhaps, all too often we hear only the criticisms in the press and media. What this doesn't reflect is more often the case - that is the mutual respect - interchange which occurs again between members of our bar and judiciary.

I certainly hope in the years to come as a law student that you'll be inspired and energized toward a commitment to the honor, and the recognition of the important principles of justice such as individual rights, victim rights, minority rights, independent bar, etc.

In these current turbulent times we live in - that is with the ongoing problems in places such as Iraq or Afghanistan - much is often said of what it takes to have a democracy and/or republic. When this is noted or discussed in intelligent detail what is most pointed up and stressed - it to have same - in Iraq or Afghanistan - or recently in Pakistan - so hopefully as we have here - is the need for an independent bar and judiciary to ensure and protect individual rights to all citizens, i.e. bills of rights, protection of minority rights and victim rights.

It has been said that Benjamin Franklin observed - when told of a nation's inclination to limit the rights of its citizens in the name of security - exclaimed - deserve neither.
Even further, now so - you are at the University of Buffalo -you are in an area, i.e. Western New York that not so many years ago was a virtual hot bed in these areas of how vital these rights were to minorities such as Blacks, Irish, Italian, German or Polish immigrants or various members of a religious faith, not the majority in any particular part of the country, i.e. that is - then - such things as Roman Catholicism and/or now Islam. So now we move from those days to now when again these principles remain of vital importance to immigrants, i.e. aliens, to African Americans, to Hispanics and now again members of a religious faith not in majority, not prevalent in a particular area, i.e. Islam.

We must remember that despite a very real concern and examples over these times - despite the best of intentions - we are not a monolithic, controllable society - we are a free nation which has thrived by its freedom, its diversity and complexity.

In this regard, I would cite Jamestown's own United States Supreme Court Justice Robert Jackson who in the matter of the State board of education v. Barnett, in his opinion - defending individual's rights - stated, "if there's any fixed star in our Constitutional constellation, it is that no official, high or petty can prescribe which shall be orthodox in politics, nationalism, religion or other matters of opinion."

In another decision, Justice Jackson spoke of his belief in the fundamental rights of all individuals in the Bill of Rights. He noted "the very purpose of the Bill of Rights was to withdraw certain subjects from the vicissitudes of political controversy - to place them beyond the reach of majorities and officials and to establish them as legal principles to be applied by the courts."

He denied any concept that our individual fundamental rights should be submitted to vote. They depend on the outcome of no election.

He defended an individual's freedom to differ, stating that it was "not limited to things that do not matter much, if so, it would be a mere shadow of freedom. The test of its substance is the right to differ as to things that touch the heart of the existing order."
In the case of Communications Associations v. Douds, he stated "the priceless heritage of our society is in the unrestricted constitutional right of each member to think as he will. Thought control is the copyright of totalitarianism - and we should make no claim to it. It is not the function of our government to keep the citizen from falling into error; rather it is the function of the citizen to keep the government from falling into error."

In any discussion of ideas we should aspire to, I'm reminded of references made by our former Governor, Mario Cuomo, in a book he wrote "Why Lincoln Matters." That is to say - perhaps we as attorney and judiciary - should be as Lincoln - individuals of ideas, large and soaring, but as such being cursed with the realization these ideas are achievable. We as he cannot escape the responsibility of pursuing them with actions.

What I speak to you today, as law students, on the beginning of your careers, is the achievable dream of equality and opportunity for all. This was the original idea for which the struggle was made - by the founding fathers and Lincoln. They and he tried throughout their lives - Lincoln to its end - to uphold the idea that all men are endowed by their creator with certain inalienable rights - that is to life, liberty and the pursuit of happiness.

For us -students, attorneys, judiciary, as with Lincoln, this can't be just a lovely, lofty dream or divine poetry that is to sooth their soul by wrapping it in high aspiration. It is a specific achievable goal, i.e., of flesh and blood humans, who would have to find ways to, among other things, provide for our citizens, security from assault, quality of opportunity and right to be treated with dignity. It must be part of our creed, to understand that this cannot be spoken or prayed into existence; rather it has to be built by the work of our hearts and hands - consistently and patiently.

Court of Appeals Judge Eugene F. Pigott, Jr to Deliver Remarks at SUNY at Buffalo Law School on November 8, 2011 at 6 pm (Room 106 in O'Brian Hall). Free and Open to the Public.

NYSBA President Vincent E. Doyle, III and David Tennant, Section Chair of the Commercial and Federal Litigation Section, are inviting all members of the legal community (and law students and faculty) who live and practice in upstate New York to hear guest speaker Honorable Eugene F. Pigott, Jr. of the New York State, and to experience the excitement of the NYSBA at work. The event will take place at SUNY at Buffalo Law School on November 8, 2011 at 6 pm (Room 106 in O'Brian Hall).

Judge Pigott will speak about appellate practice at all levels. He will describe creative techniques that can be employed to make your argument on appeal more persuasive. He will also discuss the diversity of practice rules among the appellate divisions, and the development of "best practices" guidelines to bring about greater uniformity between and among the various levels of appellate practice.

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By Paul Gillan

The Albany Times Union covers the new New York autism mandate.

Following years of debate and false starts, Gov. Andrew Cuomo signed a bill Tuesday requiring insurers to cover screening, diagnosis and treatment of autism.
"The children will get the help, the families will get the support," Cuomo said before signing the measure, which was passed by lawmakers last session.

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