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Appeals Court Rejects Recruiter's Suit Seeking Fee From Law Firm
New York Law Journal
March 25, 2009
Photodisc Green
A legal recruiter cannot collect a fee of nearly $730,000 from Philadelphia-based Blank Rome in connection with a merger the law firm first rejected and then completed with the assistance of a competing placement firm, a New York appeals court has ruled.
In an unsigned, unanimous ruling, the Appellate Division, 1st Department, concluded that a series of e-mails exchanged between Mark Bruce International Inc. and Blank Rome approximately 10 months before the Philadelphia firm joined forces with New York-based Healy & Baillie, a 28-lawyer maritime firm with an international presence, did not amount to an enforceable contract.
In affirming Supreme Court Justice Herman Cahn's dismissal of Mark Bruce's suit, the panel ruled in Mark Bruce International Inc. v. Blank Rome, LLP, 155, that the "exchange of e-mails, which did not set forth the fee for plaintiff's services or an objective standard to determine it, was too indefinite to be enforceable."
Robert Lehrman, the executive vice president of Mark Bruce, e-mailed Blank Rome about the prospect of merging with a maritime law and insurance litigation firm in October 2005.
In a subsequent e-mail to Lehrman, David F. Girard-diCarlo, Blank Rome's former chairman, agreed to pay Mark Bruce a "reasonably determined" merger fee if the deal went through.
However, after two maritime partners at Blank Rome expressed doubt about the proposed merger, negotiations between Blank Rome and the search firm came to a close.
Meanwhile, Healy & Baillie had enlisted another placement firm, Major, Lindsey & Africa, to market the maritime firm to prospective merger candidates.
On Nov. 4, 2005, a recruiter from Major Lindsey contacted Michael Mullman, the administrative partner of Blank Rome's New York office, to gauge whether the firm had an interest in joining forces with Healy & Baillie.
While Blank Rome initially rebuffed Major Lindsey's efforts, one of the maritime partners who had advised Girard-diCarlo against the deal had a change of heart in January 2006. After the partner contacted Mullman, the two attended a dinner with a Major Lindsey recruiter and Lawrence Mullman, a partner at Major Lindsey and the brother of Michael Mullman.
Following further discussions, Blank Rome and Healy & Baillie announced in a September 2006 press release their intention to merge on Oct. 1.
Weeks after the announcement, Mark Bruce filed suit against Blank Rome, alleging breach of contract and unjust enrichment. The recruiting firm then moved for summary judgment for $729,931, the same amount Blank Rome paid Major Lindsey.
But on May 23, 2008, Justice Cahn threw out the action after finding the "purported e-mail agreement" between Blank Rome and Mark Bruce was "merely an unenforceable agreement to agree."
Tuesday, the 1st Department agreed the e-mail exchange was "too indefinite to be enforceable."
"The standard of reasonableness left for future determination by the parties themselves, rather than by a third party, was not made objective by the implied duty to determine the amount of the fee in good faith," the panel wrote.
The court also concluded that Cahn had properly dismissed the unjust enrichment claim, which was "duplicative" of the breach of contract claim.
Justices David Friedman, John W. Sweeny Jr., Dianne T. Renwick and Helen Freedman sat on the panel, which heard arguments on March 4.
Harris N. Cogan of Blank Rome represented the firm pro se.
Jeffrey A. Mitchell of Gibbons, who represented Mark Bruce, said he was "disappointed" with the ruling.
