On July 12, 2023, Justice Reed of the New York County Commercial Division issued a decision in Kiehl v. Cavicchio, 2023 NY Slip Op. 50706(U), dismissing claims based on an alleged oral partnership agreement for lack of allegations of an agreement to share losses, explaining:
After careful consideration, the court dismisses the first through fifth causes of action, which rely on the alleged partnership or joint venture agreement. Although plaintiff is correct that his receipt of a W-2 and other factors are not dispositive under CPLR 3211(a)(7) or (a)(1), he has not satisfied an indispensable element of his claim. To determine whether there is a valid oral partnership agreement, a court will consider whether the parties shared profits and losses and the existence of capital contribution.
Although the complaint at hand asserts that plaintiff shared in Soundtrack’s losses, it supports this contention by detailing personal expenditures that do not constitute losses. The $350,000 to which the complaint refers, for example, was for his partnership in Partners Leasing. Although Partners Leasing did business with Soundtrack, it was a separate entity. The allegation that Soundtrack saved money by doing business with Partners Leasing is insufficient to turn plaintiff’s expenditure into a business loss. His deferral of half of his $100,000 salary for a time is not a loss, as he ultimately received the money that was owed to him. Finally, the statement that plaintiff paid other expenses of the business over the years is conclusory and insufficient to establish a business loss. Plaintiff also provides no legal argument supporting his position that this is equivalent to sharing in Soundtrack’s losses.
Plaintiff is correct that a joint venture agreement does not require losses where the record establishes that there was no reasonable expectation of losses. Here, however, Soundtrack’s profitability was not guaranteed. Indeed, by plaintiff’s own admission, he deferred half of his salary for almost two years when the business experienced cash flow problems. Thus, plaintiff cannot avail himself of this limited exception to the general principle.
(Internal quotations and citations omitted).