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Argued September 7, 2004; decided October 26, 2004
Sheehy v Clifford Chance Rogers & Wells, 1 AD3d 225, reversed.
{**3 NY3d at 556} OPINION OF THE COURT
G.B. Smith, J.
In this breach of contract action, plaintiff John Sheehy, a former{**3 NY3d at 557} partner of defendant law firm's predecessor Rogers & Wells, alleges that he was wrongfully denied certain retirement benefits orally promised to him in exchange for his agreement to take early [*2]retirement. The issue presented on this appeal is whether plaintiff's claim for the recovery of the benefits based on this alleged oral agreement is barred by the statute of frauds. We conclude that the statute of frauds does bar plaintiff's claim and therefore reinstate the order of Supreme Court
dismissing the complaint.[FN1]
At all times relevant to this case, the firm's retirement plan, incorporated by reference into the partnership agreement, provided for early retirement for partners between the ages of 60 and 64. Partners who reached the age of 65 were eligible for normal retirement, while mandatory retirement began at age 70. The retirement benefits available to partners taking normal or mandatory retirement included four years of payments equal to 37.5% of the distribution of partnership profits which the partner would have received had he or she not retired (the four-year payout), participation in the firm's medical and life insurance plans, use of office space and secretarial assistance, and supplemental retirement payments (SRPs), which are paid for life beginning in the fifth year after the partner's retirement.
By contrast, partners taking early retirement would receive the amount in the partner's net capital account, actual cash distributions made to the partner on or before the date of retirement and the partner's share of the partnership profits accrued during the year of retirement. Partners taking early retirement were not entitled to subsequent profit distributions or SRPs. According to the partnership agreement, early retiring partners could receive additional payments only if the Executive Committee, in the exercise of its discretion, entered into a written agreement authorizing such payments. Moreover, the retirement plan stated that SRPs "shall not be paid to a Partner who takes Early Retirement, except at the specific written request of the Executive Committee."
In December 1994, the firm's Executive Committee requested plaintiff's resignation. According to plaintiff, he then met with James Asher, the supervising partner and member of the Executive Committee, who asked plaintiff to withdraw from the firm effective {**3 NY3d at 558}January 1, 1996. Asher allegedly told plaintiff that in return for his resignation, he would be treated as having taken early retirement at the firm's request. Asher also allegedly promised that plaintiff would receive the four-year payout, SRPs and other retirement benefits under the partnership agreement. Plaintiff, then age 57, retired from the firm as of January 1, 1996, with [*3]the status of senior counsel. Senior counsel status, according to the retirement plan, is reserved for partners who retire "in accordance with the provisions of [the retirement p]lan."
From 1996 until 1999, plaintiff indisputably received the four-year payout, consisting of annual profit distribution payments of approximately $200,000. Plaintiff maintained that he also participated in the firm's health and life insurance benefits, and utilized firm office space and secretarial assistance. According to the complaint, the firm hired an outside actuary and later directed the firm's controller to calculate the amount of SRPs that plaintiff would receive. The controller prepared a memorandum stating that plaintiff was entitled to receive SRPs in the amount of $81,245 each year beginning January 1, 2000. However, the firm subsequently refused to pay SRPs to plaintiff.
Plaintiff brought this lawsuit against the firm alleging breach of contract, unjust enrichment and breach of fiduciary duty arising from the failure to pay him SRPs. The firm raised various affirmative defenses, including the statute of frauds and the lack of a written agreement for the payment of SRPs in accordance with the provisions of the partnership agreement and the retirement plan. Plaintiff subsequently moved for an order, pursuant to CPLR 3212 (b), granting partial summary judgment, or alternatively, pursuant to CPLR 3211 (b), dismissing the firm's affirmative defenses. Defendant cross-moved for summary judgment dismissing the complaint in its entirety for failure to comply with the statute of frauds or, in the alternative, for partial summary judgment dismissing so much of the complaint seeking damages for the present value of future installment payments not yet due. Supreme Court denied plaintiff's motion and granted defendant's summary judgment motion dismissing the complaint in its entirety. In so doing, the court concluded that the statute of frauds barred plaintiff's claims because the firm's alleged obligation to make annual payments to him beginning five years after plaintiff's retirement could not be performed within one year. Therefore, the court concluded, the contract was required to be in writing in order {**3 NY3d at 559}to be enforceable. The court further concluded that even if the statute of frauds did not bar the lawsuit, under the terms of the partnership agreement and the retirement plan, plaintiff was not entitled to SRPs because the firm made no specific written request for his early retirement.
The Appellate Division modified the order of Supreme Court, on the law, denied defendant's cross motion as to plaintiff's cause of action alleging breach of contract (except insofar as that cause sought damages for the present value of future installment payments not yet due), reinstated that cause of action to that extent and granted plaintiff's motion dismissing certain affirmative defenses, and otherwise affirmed the order. Citing this Court's decision in Kane v Rodgers (21 AD2d 773 [1964], affd 15 NY2d 544 [1964]), the Appellate Division held that the statute of frauds did not bar plaintiff's claim because the oral agreement between the parties had [*4]been completely performed within a year of its making and the payment of SRPs to plaintiff concerned only the enforcement of existing rights under the firm's retirement plan. According to the Court, the oral agreement between the parties was for plaintiff to resign in exchange for the firm deeming him to have taken early retirement at the specific written request of the Executive Committee, thereby entitling plaintiff to receive SRPs under the retirement plan. The Court stated that this change of plaintiff's status

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