On March 5, 2024, Justice Ruchelsman of the Kings County Commercial Division issued a decision in NY Cardio Care PLLC v. Salman, 2024 NY Slip Op. 30850(U), holding that claims based on an alleged oral partnership agreement were barred by a no written modifications clause in an employment agreement, explaining:
The defendant argues that he entered into an entirely new partnership agreement with the plaintiffs which superseded the employment agreement. Thus, the oral partnership agreement was not a modification of the agreement which required a writing but rather the employment agreement was entirely superseded, and effectively terminated by, a subsequent partnership arrangement. Thus, he maintains a fiduciary duty and is entitled to an accounting. Likewise, these facts support the counterclaims of breach of contract and a declaratory judgement.
However, notwithstanding earlier Conclusions to the contrary, the employment agreement prohibits oral modifications. Thus, Article 12.2 of. the employment agreement states that no amendment, modification, or waiver of any provision of this Agreement shall be binding unless in writing and signed by the Party against whom the operation of such amendment, modification, or waiver is sought to the enforced. Further, Section II of the agreement, entitled ‘Future Relationship’ contemplates the possibility of the defendant becoming an Owner or member of the plaintiffs upon an invitation from the plaintiffs at the sole discretion of the plaintiffs. Thus, there can really be no partnership arrangement without compliance with Section II. The argument that a new oral agreement entirely superseded the employment agreement, in effect, means the terms of the employment agreement need no compliance, an untenable conclusion. Essentially, the employment agreement governed the defendant’s employment prospects unless a change occurred. Pursuant to Article 12 any changes required a writing. The nature of the change is immaterial. Indeed, there is little distinction between a modification and a superseding event, when contemplating the defendant’s future. Any super ceding event, such as an offer of partnership and any modification, such as an offer of partnership, result in the same change. Of course, there could be modifications that could not reasonably be viewed as superseding the entire agreement, for example, changing the salary schedule or vacation days allotted. The plaintiffs concede such changes would require a writing. However, that only strengthens the notion that far more significant modifications also require a writing. It is entirely unreasonable to argue that only minor modifications require a writing but that major modifications somehow transform into a superseding agreement obviating the need for a writing. Thus, there can be no reasonable reliance on any oral communications allegedly made since a writing was required by the employment agreement. Indeed, it is well settled that a merger clause which states the agreement represents the entire understanding between the parties is to require full application of the parole evidence rule in order to bar the introduction of extrinsic evidence to vary or contradict the terms of the writing. The employment agreement states that this Agreement and the Exhibits attached hereto constitute the complete and exclusive statement of the agreement among the Parties with respect to the subject matter hereof. Therefore, there can be no oral agreement the parties entered into a partnership. Thus, all the counterclaims, which are premised upon the existence of such a relationship, cannot establish any valid causes of action.
(Internal quotations and citations omitted).