Monday, September 20, 2021
It is difficult to assert an affirmative defense of economic duress under New York law. The party alleging economic duress has to show a wrongful threat and not merely point to his own financial hardship. The wrongful threat must be some threatening conduct that is not within the other party's legal rights. But in Herrnson v. Hoffman, Judge Oetkin of the District Court for the Southern District of New York found that plaintiff had alleged sufficient facts to survive a motion that the court treated as one for summary judgment.
Pro se plaintiff Samuel Herrnson alleges that defendant Mark Hoffman gave Herrnson a check for $16,000. Hoffman boasted of his wealth and allegedly gave Herrnson the money to assist the latter in a rent dispute he was having with his landlord. Hoffman allegedly told Herrnson that he wanted him to "view Hoffman Management as the place to be for the remainder of his career." Herrnson alleges that Hoffman wrote "loved" on the memo line of the check (he may have written "loan"). Herrnson deposited the money in an escrow account, anticipating litigation with his landlord.
Two months later, Hofmann and his co-defendants terminated Herrnson. Kinda gives Hoffman's statement "the place to be for the remainder of [your] career" a different cast. It's reminiscent of the Delphic Oracle's reply to Croesus: "If Croesus goes to war, he will destroy a great empire." In any case, Hoffman called Herrnson's escrow manager and had the funds frozen, telling the escrow manager that the $16,000 check was a loan, conditional on Herrnson's continued employment. As that employment had terminated, the loan was being called in.
Herrnson's narrative, accepted as true at this stage in the proceedings, was that Hofmann knew that Herrnson was contemplating an ADEA claim against Hofmann and his co-defendants, or similar claims arising under state law. Hofmann mischaracterized a gift as a loan in an attempt to strong-arm Herrnson into dropping his claim. Hofmann made Herrnson sign a general release in order to have the funds released.
Judge Oetkin was having none of it at the summary judgement stage. If Herrnson's narrative is accurate, he received nothing from the release, other than funds that had already been given to him. Defendants' motion to dismiss, converted into a motion for summary judgment was denied.