Crossclaim Survives In Placement Fee Litigation

In litigation over payment of placement fees, the New York Appellate Division for the Second Judicial Department agreed with the lower court that the law firm’s counterclaim should not be dismissed

The plaintiff, National Recruiting Group, LLC, is a staffing company that places individuals into temporary employment positions. In November 2015, the plaintiff commenced this action against the defendants Bern Ripka LLP (hereinafter Bern Ripka), Napoli Shkolnik PLLC (hereinafter Napoli Shkolnik), and Napoli Bern Ripka Shkolnik LLP (hereinafter NBRS; hereinafter collectively with Bern Ripka and Napoli Shkolnik, the defendants), alleging that it was owed the sum of $150,150.18, pursuant to a contract between it and NBRS. The plaintiff alleged that in August 2015, following the dissolution of NBRS, and the formation of Bern Ripka and Napoli Shkolnik, it stopped receiving payments that were due under the contract. In an amended complaint dated December 28, 2015, the plaintiff asserted causes of action, inter alia, to recover damages for breach of contract and unjust enrichment, and on an account stated. The defendants served an amended answer and interposed two counterclaims alleging negligent hiring and supervision, and liability based upon a theory of respondeat superior. In their counterclaims, the defendants alleged, inter alia, that the plaintiff knew or had reason to know that a certain unnamed temporary employee placed by the plaintiff with NBRS “was potentially dangerous and would engage in criminal activities, such as theft and credit card fraud,” and that the acts were committed by the temporary employee during the course and scope of his employment.

The court

we agree with the Supreme Court’s rejection of the plaintiff’s contention that the proposed counterclaim alleging negligent hiring and supervision was patently devoid of merit on the ground that it was time-barred under the three-year statute of limitations (see CPLR 214[5]; Wander v St. John’s Univ., 163 AD3d 896, 897). Contrary to the plaintiff’s contention, that counterclaim was timely asserted inasmuch as “it was not barred at the time the claims asserted in the complaint were interposed”

(Mike Frisch)