Tuesday, October 24, 2006
In a 72-page opinion, Justice Ramos of the New York Supreme Court's Commercial Division, denied Richard Grasso's motions to dismiss claims broght against him by the State of New York and granted motions dismissing Mr. Grasso's counterclaims. The full opinion can be found on the Commercial Division's website (Index No. 401620/2004, Motion No. 28). According to press reports, the ruling will require Grasso to repay up to $100 million of a $140 million payment he received in 2003 as compensation for his services as CEO and Chairman of the Board of the New York Stock Exchange.
Grasso brought a counterclaim for breach of contract, alleging that he was entitled to $6.2 million in benefits because the NYSE terminated him without cause in 2003. Justice Ramos dismissed the counterclaim, even assuming that any such claim had not been waived when Grasso voluntarily waived entitlement to benefits beyond the $140 million already paid, on the ground that Grasso's employment agreement provided for termination benefits only upon written notice of termination and no such written notice was provided.
Justice Ramos conceded that the result was harsh:
Though harsh, the Court is compelled to hold that without a written ntoice, no matter the circumstances, Mr. Grasso must fail because a written notice is required by all of the contracts he signed (Ramos Oct. 18 2006 Op. at 18).
Still, he viewed his ruling as compelled by prior precedent and by Section 15-301(4) of New York's General Obligations Law.
Stay tuned, as Grasso plans an appeal.