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A suit filed by Pryor Cashman Sherman & Flynn against a client for an unpaid $260,500 bonus for “outstanding results” will go forward, following a Manhattan judge’s denial of the client’s motion to dismiss. The case before Supreme Court Justice Louis B. York stems from Pryor Cashman’s representation of hedge fund manager Cary G. Brody in an action initiated by the New York State Department of Taxation and Finance. The state alleged that Brody had been deficient in his payment of taxes from 1997 through 2000. Brody faced $11 million in potential exposure, according to a brief filed by Pryor Cashman. The firm negotiated a settlement between Brody and the state, which reduced his liability to $1 million. Brody paid Pryor Cashman fees of $783,000. The firm then sought a $260,500 payment it claimed Brody owed under the terms of their retainer agreement’s bonus clause. “By reason of the scope of the work for which we have been retained our regular hourly rate . . . will be reduced by 20 percent,” the provision stipulated. “We hope to achieve outstanding results on your behalf. Assuming that proves to be the case, we would expect to receive a bonus, subject to mutual agreement, in the neighborhood of the aggregate 20 percent reductions in our fees to such date.” At issue in Pryor Cashman’s case against Brody is whether the settlement was clearly “outstanding.” In his motion to dismiss, Brody, represented by Katten Muchin Rosenman, argued that “the agreement expressly conditions the payment of any bonus on Brody’s subjective personal satisfaction with Pryor Cashman’s performance.” Under this argument, Brody’s belief that the results were “outstanding” was a condition precedent that did not, and would not, occur, he claimed. Brody also argued that the clause comprised merely an agreement to agree, which fails for indefiniteness. In its opposition to the motion to dismiss, Pryor Cashman argued, among other things, that the provision contained an objective standard and that summary judgment would be premature. Justice York, in Pryor Cashman Sherman & Flynn v. Brody, 603414/04, sided with Pryor Cashman. After noting that the firm should have anticipated that the two sides would have differing views as to whether a settlement was “outstanding,” the judge ruled that Brody’s motion lacked sufficient documentation to dismiss the case. “[T]he documentary evidence submitted by the defendant Brody does not resolve all factual issues as a matter of law,” York wrote. Whether the settlement was an outstanding result, and whether there is a basis for determining if the result was outstanding, “are both matters which cannot be safely decided simply on a pleading motion, but require a further exploration of the facts,” the judge said. Attorneys for both sides declined to answer questions regarding the case. Jamie Brickell and Ronald Giller represented their firm, Pryor Cashman. Martin Karlinsky of Katten Muchin Rosenman, represented Brody.

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