Kärst v. W.P. Carey Inc.

or about April 13, 2017, which, to the extent appealed from, denied plaintiffs motion to renew, unanimously affirmed, with costs.

In this breach of contract action, there are material issues of fact surrounding the purpose of the payments received by plaintiff between December 2013 and September 2014, that render summary judgment improper. Moreover, even though the parties agree that interest is due to plaintiff, they disagree about the date from which interest should run, as well as the amount on which it should be calculated.

Between June 2003 and September 2008, plaintiff, a former employee of nonparty W.P. Carey International LLC (WPCI), was granted approximately 2.5 million units of interest in WPCI, as well as other subsidiary companies, in exchange for plaintiffs “provision of services.” Plaintiff was “not required to make any Capital Contributions ... in exchange for [the] Units.” These units of interest entitled plaintiff to fee income distributions from the various companies. Also, on or about September 30, 2008, plaintiff entered into a “put agreement” with W.P. Carey & Co. LLC (WPC),^[1] the parent company of plaintiffs former employer, WPCI, and others. Pursuant to the put agreement, plaintiff had the right to require WPC to purchase his interest units (the Put Right). Once plaintiff gave notice of his intention to exercise his Put Right, the appraisal process was triggered, which would result in the determination of the value of his interest units, or the put purchase price. Within 30 days of the conclusion of the appraisal process, plaintiff was to tender his interest units in exchange for the put purchase price, which was to be paid in shares of WPC restricted stock.

Plaintiff exercised his Put Right on October 1, 2013, thereby triggering the appraisal process, which according to plaintiff, concluded in April 2015,^[2] and ultimately valued plaintiffs interest units at 14.3 million dollars. Plaintiff contends that after he exercised his Put Right, WPC “seized” his ownership interests because plaintiff did not receive any fee income distributions, and defendant retained 100% of the profit shares for itself. Moreover, because plaintiff did not receive his shares of WPC stock in exchange for his interest units until April 7, 2016, WPC, according to plaintiff, also prevented plaintiff from reaping the financial benefits associated with holding the WPC stock, including dividend payments.

Plaintiff argues that because defendant seized his interest units on October 31, 2013, he is entitled to recover prejudgment interest on the value of the WPG shares as well as accrued dividends on the WPC stock that was used to pay the put purchase price, running from October 31, 2013. Plaintiff relies upon a September 2015 email from defendant’s tax director saying that no income was allocated to plaintiff after October 31, 2013. In response, defendant argues that plaintiff received over one million dollars between December 2013 and September 2014 and that such payments were income distributions, thereby showing that plaintiff’s interests were in fact not' seized. Defendant points to an affidavit from its chief executive officer, which plaintiff included in his moving papers on the motion below, and that was submitted in an earlier special proceeding to confirm the appraisal value, in which the CEO averred that WPCI made income distributions to plaintiff after October 31, 2013. On reply on the motion below, plaintiff submitted K-ls for 2013 and 2014, which, according to plaintiff, show that his profit share in the subsidiary companies was listed as “NONE” and that any payments were actually a return of capital.^[3] Moreover, plaintiff contends that defendant created a “feigned factual dispute” by contradicting its own documents—i.e. the September 2015 email and the affidavit from its CEO.

Ultimately, the parties dispute the purpose of the payments made between December 2013 and September 2014 and whether defendant did in fact “seize” plaintiff’s interest units, which, in turn, affects the date from which interest should be calculated. Thus, because there are issues of fact surrounding the one million dollars worth of payments, plaintiff’s motion for summary judgment was properly denied (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 , 853 [1985] [failure to tender “sufficient evidence to eliminate any material issues of fact” requires denial of a summary judgment motion]).

Moreover, and contrary to plaintiff’s argument, this is not a case where an affidavit contradicts prior deposition testimony (see Harty v Lenci, 294 AD2d 296 , 298 [1st Dept 2002]), or a sworn bill of particulars (see Johnson v Marriott Mgt. Servs. Corp., 44 AD3d 450 , 451 [1st Dept 2007], lv denied 10 NY3d