Protective Order Voids Professional Contract, Panel Says

, New York Law Journal

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Hilary Kolodin, known professionally as Hilary Kole.
Hilary Kolodin, known professionally as Hilary Kole.

An agreement in Family Court between a jazz singer and her former manager/fiance not to talk to each other effectively voids the estranged couple's business contracts, a unanimous state appeals panel has ruled, affirming a lower court.

"This case, apparently one of first impression, aptly illustrates the well-known axiom that cautions against mixing business with pleasure," said Justice Rolando Acosta, who wrote the unanimous Appellate Division, First Department, decision handed down Thursday.

The ruling in Kolodin v. Valenti, 113181/11, is a victory for the singer, Hilary Kolodin, who has alleged that the manager, John Valenti, was using her contracts with him to prevent her from working with anyone else. It was joined by Justices Richard Andrias, Karla Moskowitz, Rosalyn Richter and Sallie Manzanet-Daniels.

Kolodin, known professionally as Hilary Kole, met Valenti in 2003 while she was singing at the midtown jazz club Birdland, which Valenti owns. The two began a romantic relationship. In 2004, Kolodin moved in with Valenti and they became engaged. At the same time, Kolodin began working with Valenti's management company, Jayarvee Inc.

By 2011, their relationship was unraveling. Kolodin alleges that Valenti got a hold of her private communications, partly by overpowering her, and began threatening to release them to the public around March 2011. In May 2011, Kolodin moved out of Valenti's apartment.

Nonetheless, she continued her professional relationship with Jayarvee during this period. In April 2011, she signed a new recording contract with the company, and in June 2011, a management contract.

In October 2011, Kolodin opened a Family Court case seeking an order of protection against Valenti, which was granted. In November 2011, she sued Valenti in Supreme Court, seeking rescission of the contracts and a declaration that Jayarvee was in breach of them. Valenti answered that the contracts were impossible to perform because of the order of protection.

In June 2012, Kolodin and Valenti settled the Family Court case, stipulating that they would have no contact with each other, either directly or through any third parties except their counsel. Kolodin subsequently moved for summary judgment in the Supreme Court case, and Justice Ellen Coin granted the motion, finding that the stipulation made performance of the business contracts impossible. Valenti and Jayarvee appealed.

Acosta, affirming, said that the stipulation made performance of the contracts "objectively impossible."

He noted that Jayarvee is a small company, with about 40 employees, and that Valenti, as president and sole shareholder, is directly involved in all its decisions, making it impossible for Jayarvee to deal with Kolodin without involving Valenti.

"It is of no moment that Jayarvee could hypothetically perform the contracts absent Valenti's involvement; to do so would require a sort of firewall, the very establishment of which would necessitate (direct or indirect) communication between Valenti and plaintiff," he wrote.

Valenti and Jayarvee argued that Kolodin could not benefit from the doctrine of impossibility because she herself had helped create the conditions that made performance impossible, by bringing the Family Court proceeding. They pointed to the Court of Appeals' 1975 decision in Cushman & Wakefield v. Dollar Land Corp., 36 NY2d 490, 496, which held that dissenting shareholders who obtained an injunction against the sale of a corporation, and then won control of the corporation, could not declare that the injunction made the sale contract impossible because they brought about the injunction themselves and could dissolve it.

Acosta wrote that Cushman was not applicable since Kolodin didn't bring about the stipulation herself; Valenti agreed to it. Furthermore, the judge noted, though Kolodin did obtain the order of protection unilaterally, she was "compelled to do so by the alleged domestic abuse of her partner," a situation that had not been considered in any prior cases.

Moreover, Acosta said, Valenti himself had said earlier in the case that performance was impossible because of the order of protection, and "cannot create an issue of fact by contradicting his prior sworn statement."

"We're delighted that it was unanimously affirmed, and Hilary is delighted to move forward with her career," said Lawrence Garbuz, a partner at Garbuz and Lewis, who represents Kolodin along with his partner Adina Lewis and Michael Andrews, of counsel to the firm.

Andrea Bierstein, a partner at Hanly Conroy Bierstein Sheridan Fisher & Hayes, who represents Valenti along with her partners Paul Hanly and Jayne Conroy, said in an email that they were disappointed with the decision.

Bierstein said in the email that the decision "ignores: (1) the clear holding of the New York Court of Appeals in [Cushman] that the defense of impossibility is unavailable if the party seeking it plays any role in bringing about the impossibility; (2) that the stipulation at issue did not arise out of thin air, but was itself the result of the injunction that plaintiff obtained; and (3) that the injunction itself was obtained ex parte, and plaintiff never had to substantiate her allegations of domestic abuse (referenced by the Court)."

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