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Bank of New York v. Michael P. Maloney Consulting

November 9, 2007

THE BANK OF NEW YORK, PLAINTIFF-RESPONDENT,
v.
MICHAEL P. MALONEY CONSULTING, INC., A/K/A MICHAEL P. MALONEY, INC., DEFENDANT-APPELLANT,
MICHAEL P. MALONEY, INC., THIRD-PARTY PLAINTIFF-APPELLANT,
v.
JOE MANNELLO, ADAM KRAUSHAAR AND BNY CAPITAL MARKETS, INC., THIRD-PARTY DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-521-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 22, 2007

Before Judges Weissbard, S.L. Reisner and Gilroy.

This case arises from a dispute over fees that a New York-based agency charged for placing employees at a New Jersey subsidiary of a New York bank. Defendant Michael P. Maloney Consulting, Inc. (Maloney) appeals from an August 25, 2006 trial court order, granting summary judgment dismissing Maloney's counterclaim for fees against the Bank of New York (BONY) and dismissing Maloney's third party complaint against other related parties.*fn1 We affirm.

I.

Maloney is an agency specializing in the placement of fixed income bonds salespersons, analysts, traders, and other financial specialists. On February 2, 2001, BONY sent a letter agreement from its New York office to Maloney's New York office. The agreement recited that if BONY "or one of its affiliates employs an applicant as a direct result of a referral from" Maloney, then either BONY or its affiliate would pay Maloney a fee for the referral. The amount of the fee and any other conditions would be "determined by a separate written agreement" between BONY and Maloney.

The February 2, 2001 letter stated that "[t]his letter and the aforementioned agreement we enter into with [Maloney] will constitute our entire arrangement with respect to the hiring of applicants referred to the Bank by [Maloney] and supercede any and all prior oral or written . . . agreements." The February agreement did not indicate that it was to be construed in accordance with New York law. Maloney signed the letter agreement.*fn2

Thereafter, Maloney repeatedly corresponded with the New Jersey Fixed Income Division of BNY Capital Markets Inc. (BNY-NJ or Roseland office), a BONY subsidiary located in Roseland, New Jersey, attempting to place New Jersey residents as employees at BNY-NJ.

On December 20, 2001, Michael P. Maloney wrote a letter to Chris Harrison of BNY-NJ in Roseland. The letter enclosed the resume of John Economos, indicated that Economos lived in New Jersey, and suggested that Economos and another New Jersey resident who worked with him could both be good employees for BNY-NJ. On October 30, 2002, Mr. Maloney wrote to Joe Manello at BNY-NJ, again trying to place Economos, who lived "about twenty minutes from [the Roseland] office."

In a letter to the Roseland office dated October 9, 2002, Mr. Maloney attempted to place another New Jersey resident named Scott Kephart. The letter also indicated that Mr. Maloney was trying to recruit two other candidates for BNY-NJ, one of whom lived in New Jersey and one who was about to move to New Jersey. A follow-up letter dated December 9, 2002, again sought to place Kephart at BNY-NJ.

On October 25, 2002, Maloney sent a letter to BNY-NJ seeking to place another New Jersey resident named Lou Russo.

In 2003, the parties had a disagreement about a New Jersey resident named Adam Kraushaar, whom Maloney had attempted to recruit for BNY-NJ. Expressing regret over the disagreement, Michael P. Maloney sent a letter to Joe Manello at the BNY-NJ Roseland office indicating that "I have plenty of good people to send you but at this point I am afraid to send them. Over the last couple of years I have talked to a great number of different people about your firm . . . and a lot of these people are working there right now."

There is no dispute that BNY-NJ did at some point hire Kraushaar, Kephart, and Economos. However, the parties disagreed as to whether these employees came to BNY-NJ as a result of Maloney's efforts. BNY-NJ claimed Maloney was not entitled to fees for placing these employees. When the parties could not resolve their differences, BONY filed a declaratory judgment action in New Jersey, seeking a ruling that it did not owe Maloney any fees for these employees because they were not hired as a result of the parties' agreement. Maloney counterclaimed seeking the fees from BONY, and also filed a third party complaint against BNY-NJ, its head Joseph Manello (a New Jersey resident), and Kraushaar. Maloney also contended that BONY owed additional fees for the placement of Russo in the Roseland office. In answering the counterclaim, BONY for the first ...


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