Case Law Summaries

Commonwealth Advisors, LLC v. Nycomed Inc.

• Opinion Date: November 8, 2001
• Business Law
• E-Mail

CONTRACTS; DAMAGES—A consultant that is entitled to share in the fruits of its efforts under a contract has the burden of showing the connection between those efforts and the result; a mere showing of a successful outcome to the other party does not allow a court to calculate the sum owed to the consultant.

A debtor engaged the services of an advisor to assist it in resolving its disputes with a third party. The agreement provided that the advisor would receive a fee for its effort and would also receive a completion bonus upon settlement of the matter. The agreement provided that the bonus would be paid at the debtor’s discretion, based on the savings received as a result of the advisor’s efforts. The dispute was resolved and the debtor refused to pay a bonus, at which point the advisor sued for breach of contract, among other claims. The debtor successfully moved for summary judgment dismissing the complaint, which the lower court granted. On appeal, the Appellate Division found that the advisor failed to obtain the sworn testimony of any of the individuals who were involved in the settlement of the dispute between the debtor and the third party. The advisor could not prove that its efforts contributed to the settlement, or if it did contribute, to what degree it contributed to the settlement of the dispute. Any award of money damages would be based on pure speculation and not on an objective analysis. As a result, the motion for summary judgment dismissing the complaint was affirmed by the Appellate Division.

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