Commercial Litigation Group

The Gordon & Silber Commercial Litigation Group provides legal representation to clients regarding all aspects of contract -related issues, focused mainly on failure to perform business related services, breach of employment related contracts, and breach of obligations to defend and indemnify in in state, federal courts and alternative dispute resolution forums. The firm emphasizes a committed, efficient and personalized representation to the business community.

  • Breach of contract
  • Fraud
  • Negligent Misrepresentation
GRISTEDE’S FOODS, INC. V. ADDISON PROFESSIONAL FINANCIAL SEARCH LLC, ADDISON PROFESSIONAL FINANCIAL SEARCH, INC. & ADDISON

Plaintiff Gristede’s Foods, Inc. (“Gristede’s”) brought suit alleging fraud, negligent misrepresentation, negligence and breach of contract against our client an executive search firm arising from the executive placement of its former Controller claiming that our client falsely and fraudulently represented that the recruit had no criminal convictions even though he had recently been indicted for tax evasion for non-payment of his federal income taxes. Plaintiff sought not only the fee it paid our client for placement, but reimbursement of the executive’s salary the for 2.5 years he worked with the company based on the faithless servant doctrine, as well as the $102,064 legal bill it incurred due to our client’s unsuccessful whistle blower action against Gristede’s after he was fired.

We defended the matter on several fronts. The executive claimed he was fired because he discovered financial impropriety at the company and ultimately brought a whistle blower case in Federal Court against Gristede’s which was dismissed because the whistle blower statute did not apply to private companies like Gristede’s. We also argued that there was no direct evidence our client knew about the executive’s prior conviction. That even if Gristede’s had requested and paid for the premium package which included a full federal as well as state criminal background check, the conviction would not have shown up since the judgment was not entered until days after he had commenced employment. In any event, the faithless servant doctrine, to the extent it applied to the case could only have provided plaintiff with a remedy against the executive for 2.5 years of pay, not against the company that placed him. We also argued that Gristede’s unreasonably relied on our client to vet this high level executive arguing that while Gristede’s performed criminal background checks on its cashiers, it did not perform one on its incoming financial controller, the ultimate company cashier, for the sake of saving $60. Indeed, at his job interview Gristede’s did not ask him to provide an employment history or references and did not require him to answer the question on its own employment application – whether he had been convicted of a crime. We argued that once cannot allege fraud or negligent misrepresentation when the information could have been had, but for the asking. We also argued that plaintiff could not establish any “loss causation” which requires there be a substantial and direct connection between the misrepresentation and the damages. We argued that there was no nexus between plaintiff’s damages and our client’s failure to file his taxes. It is legally insufficient to merely allege that had I known I would not have hired him. There must be a causal connection between the omission and the injury. Finally, we argued that Gristede’s had no damages other than the fee it paid to our client since Gristede’s obtained 2.5 years of service from the controller prior to firing him. Finally, we argued that the employment documentation maintained by Gristede’s failed to establish any bona fide reason for his firing other than bringing the whistle blower action, which contrary to Gristede’s pleading, did not establish that Gristede’s was blameless of the alleged allegations made by our client against it.

After discovery, the case was settled at mediation for 2x the placement fee.