Opinion
125916/02.
Decided June 6, 2003.
Plaintiff Joel Cohen (Cohen), a New York City school teacher for 34 years, brings an Order to Show Cause for a preliminary injunction against Defendants Joel I. Klein (DOE), Christy Cugini (the Superintendent) and Randi Weingarten (UFT), directing Defendants to restore Cohen to a teaching position in Community School District 31, pending the outcome of his action. Cohen's combined declaratory judgment/preliminary injunction action seeks rescission of a Pre-Charge Stipulation of Settlement signed by Cohen on June 6, 2002 (the Stipulation) and damages.
The Pre-Charge Stipulation of Settlement essentially provided that in exchange for a waiver of certain disciplinary charges and a hearing, Cohen would retire from his teaching position, effective July 1, 2002.
Cohen's Verified Complaint alleges (1) a claim for rescission against Defendants based on fraud in the inducement, material misrepresentation, and mistake, (2) a claim against UFT for breach of its duty of fair representation under Article 14 of the Civil Service Law (the Taylor Law) and for gross negligence, and (3) a claim against DOE and the Superintendent for violation of the Taylor Law.
In opposition to the motion, DOE and the Superintendent (City Defendants) argue that Cohen cannot obtain preliminary relief because loss of employment does not constitute irreparable harm. City Defendants also argue that the equities favor them because if Cohen is reinstated and DOE must bring charges against him under Education Law § 3020-a, witnesses may no longer be available. Moreover, they argue that Cohen has no likelihood of success on the merits because he failed to file a notice of claim on his fraud and misrepresentation claims; he failed to state a claim for violation of the Taylor Law; and because this case should have been commenced as an Article 78 proceeding, which is now time barred.
On consent, a hearing was held before me concerning the validity of the Stipulation ( see Decision and Order, dated February 19, 2002). After the hearing, the parties submitted further memoranda of law. In addition to the arguments previously raised, City Defendants argue that the parol evidence rule bars admission of testimony which contradicts the Stipulation, but concede that no objection was made before or at the hearing when such testimony was given, rendering the argument untimely.
The Hearing
In December 2001, a middle school student complained that Cohen pushed him into a chair, an accusation of corporal punishment (Tr at 243). Cohen was later accused of witness tampering (Tr at 244). In exchange for a waiver of disciplinary charges and a formal hearing, Cohen signed a Stipulation which provided that he would retire from his teaching position effective July 1, 2002, and that his retirement was "irrevocable" (Defendant's Ex A). However, Cohen claims that when he signed the Stipulation, he was without adequate representation, was under duress, and was of the belief that, as in other teacher retirements, the Stipulation was revocable and would permit him to later return to full-time teaching. The copy of the Stipulation presented to Cohen for signature was a fax of a fax on which it is difficult to discern whether the operative word is "revocable" or "irrevocable" (Tr at 29). Cohen also testified that he believed that his retirement was "revocable" because immediately prior to his signing the Stipulation, Gary Barton (Barton), DOE's Director of Human Resources at Community School District 31, told him that it was "revocable." (Tr at 31). Cohen testified that he expressly asked Barton, "Gary, if I retire, could I come back at a later date and teach again" and "Yes" was Barton's answer (Tr at 31). Although Barton denied speaking to Cohen that day by telephone, both Cohen and his union representative, Emil Pietromonaco (Pietromonaco) testified that a conversation did take place (Tr at 30-33, 235, 317, 319-320). Pietromonaco initiated the telephone call because Cohen had questioned him about the meaning of the term "irrevocable." Barton and Pietromonaco both testified that Cohen's questions concerned whether Cohen could work per diem and per session if he signed the Stipulation (Tr at 268; Tr at 302). Barton conceded that he granted Cohen the right to work per diem and per session, even though generally when a teacher agrees to "irrevocably" retire, he cannot return to DOE in any capacity (Tr at 267-269; 303-304; Barton Affidavit, dated April 8, 2003). Although Barton admitted that he granted Cohen this right, it was not reflected in the Stipulation. To add to the confusion regarding whether the retirement was "irrevocable" or "revocable," Barton admitted that if Cohen had "voluntarily" retired, he would in fact be able to withdraw his retirement, which is how Cohen perceived his status (Tr at 241). The day that Cohen signed the Stipulation, Pietromonaco faxed a copy to Barton's office and hand delivered it the next day (Tr at 303). Cohen testified that he also delivered an original signed copy to Barton's office on June 7 (even though he had already decided that he wanted to rescind the Stipulation) because he knew that it had already been faxed and he believed that he would "be in more trouble" if he did not deliver it (Tr at 38; 43). Almost immediately after signing the Stipulation, Cohen went home and prepared a letter of rescission, dated June 6, 2002, addressed to James Talbert (the borough union representative) (the letter) (Tr at 38). He delivered the letter to Talbert's secretary at UFT's borough office on June 6 around 5 PM (Tr at 39-40). She signed an undated receipt (Plaintiff's Ex 2). City Defendants' version of this letter bears a stamp "RECEIVED JUN 10, 2002," which is the same day that the Superintendent signed the Stipulation (Defendant's Ex G). There is no evidence that UFT ever forwarded the letter to DOE.
Cohen testified that by the time he delivered the letter to the UFT office on June 6, Barton's office was closed (Tr at 41) and therefore he delivered the letter to Barton's secretary on June 7, 2002 (Tr at 42-46). Pietromonaco testified that Cohen spoke with him about rescinding the Stipulation on either June 13 or 14, and that Talbert showed him a copy of the letter on June 13 (Tr at 305-306). Barton testified that Cohen notified him of his desire to rescind the Stipulation on June 20, 2002 (Tr at 248). After teaching a summer school per session program, Cohen returned to school on September 3, 2002 (the first school day) and was told by Barton that he was not on the payroll and had to leave (Tr at 48-50; Tr at 252). The Stipulation was signed by DOE's Counsel for the Chancellor that same day.
Validity of the Stipulation
Cohen contends that the Stipulation is invalid, inter alia, because he moved to withdraw his approval of it before the Stipulation was signed by the Superintendent (June 10, 2002) and by Counsel to the Chancellor (September 3, 2002) (Petitioners (sic) Post-Hearing Brief, dated February 7, 2003 at 3-4 (Cohen Post-Hearing Brief)). He further contends that he withdrew his agreement to retire before it was acted upon (Cohen Post-Hearing Brief at 5). City Defendants argue that the Stipulation was binding when Cohen signed it on June 6, 2002, or when Cohen delivered the Stipulation to Barton's office on June 7, 2002, as an executory accord pursuant to GOL § 15-501 (2) (Post-Hearing Memorandum of Law In Opposition to Plaintiff's Request For A Preliminary Injunction at 23). They further argue that the rule for executory accords is consistent with general contract principles that an acceptance cannot be revoked once the other party has detrimentally relied upon it.
I reject as lacking in credibility Barton's testimony (presented in the most unprofessional manner) that Cohen notified him of his desire to rescind the Stipulation around June 20, 2002. In any event, it is clear that Cohen sought to rescind the Stipulation before DOE in any way acted in reliance upon it. I reject Barton's testimony that DOE would have faced tremendous obstacles if it rescinded the Stipulation after Cohen contacted Barton around June 20 because Barton had already notified legal services that the Stipulation had been signed, and because DOE "started" to conclude the case against Cohen (Tr at 249). There is no evidence regarding what DOE did to "start" to conclude Cohen's case within the short period of time between June 6th (when Cohen signed the Stipulation) and June 20th (the date that Barton acknowledged that Cohen spoke to him about rescission). Barton testified that an Education Law § 3020-a hearing would not have commenced until September because no hearings were conducted during the summer (Tr at 253; 259). Although Barton claimed that witnesses would be hard to locate because the student complainant and witnesses may not be in the same school, he agreed that DOE had the information necessary to locate them (Tr at 251-259).
Discussion
Although the absence of a signature is not necessarily fatal to the formation of a contract, the general rule has been stated that unless a contrary intent is expressed "[w]hen multiple parties are found to have intended to reduce their agreement to a single complete writing and not to be bound by their antecedent communications, it will usually be found also that they intend not to be bound until the writing has been signed by everyone of them ( see 1 Corbin on Contracts § 2.10 at 172-173 [rev 1993]); Alexander v. Wheeler, 64 AD2d 837 [4th Dept 1978] [because the parties agreed that it would be necessary to obtain the signatures of all of the sellers in order to convey the property, a contract was not formed in absence of one of the seller's signatures]).
The Court may determine the intent of the parties from the documents ( see Goldbard v. Empire State Mut. Life Ins. Co., 5 AD2d 230 [1st Dept 1958]). The Stipulation bore four signature lines, with the word "Dated" to the left of each signature line. Cohen and his union representative signed on June 6, the Superintendent signed on June 10, and Counsel for the Chancellor signed nearly three months later, on September 3. The Stipulation could have provided that the lack of a signature would not prevent consummation of the agreement ( see Corbin, supra). No evidence was introduced at the hearing to support the parties' intent to be bound by the contract absent execution by all signatories. Accordingly, I find that the parties did not intend to be bound by the Stipulation until both City Defendants signed it, and by that time, the Stipulation had been rescinded by Cohen ( see Zwirn v. Goodman, 206 AD2d 360 [2nd Dept 1994] [issue of fact existed as to whether buyer, who signed and delivered a contract of sale to seller, effectively rescinded the contract before the seller executed it, after inordinate delay]). Accordingly, because no contract was formed before Cohen rescinded his approval, the Stipulation is not valid and is of no force and effect.GOL § 15-501 does not dictate a different result. Contrary to City Defendants' position, the Stipulation was not an enforceable executory accord as defined by GOL § 15-501 because the parties admit to an oral agreement concerning the nature of the performance of the retirement, which was neither written, nor performed. In order to give effect to the parties' intentions in an executory accord while, at the same time, protecting the claimant's interests from the risk posed by the delay in performance, unperformed executory accords are given binding force "by requiring [that] the promise of the party against whom the accord is sought to be enforced . . . be in writing and signed by him" inasmuch as "[c]lear and definite proof of the existence of the agreement ought to be required before it can be urged as a defense or as the basis of an action" (1937 Report of NY Law Rev. Comm., p. 207; New York General Obligations Law § 15-501). While the parties dispute the extent of Cohen's opportunity to teach during his retirement, the parties agree that the nature of the performance of irrevocable retirement was defined in oral communications. Accordingly, the Stipulation was not an enforceable executory accord because it lacked clear and definite proof of the existence of the agreement in a writing signed by the party to be charged.
An executory accord comprises an agreement for the "future discharge of an existing claim by a substituted performance." (6 Corbin on Contracts § 1268 [1962]; see also General Obligations Law § 15-501[1]). Oral executory accords are not enforceable, absent performance ( see Denburg v. Parker Chapin Flattau Klimpl, 82 NY2d 375, 384 [1993]; Bon Temps Agency, Ltd. v. Towers Organization, Inc., 187 AD2d 376 [1st Dept 1992] [finding that an oral agreement to accept semi-monthly payments to discharge obligations was an unwritten and, therefore, unenforceable executory accord]).
Even assuming that the Stipulation was an enforceable executory accord when Cohen signed it, the Stipulation should be rescinded based on Cohen's unilateral mistake because DOE was at fault in creating the mistake and because no real prejudice will result to City Defendants ( see Restatement of the Law Second, Contracts 2d § 153 [b]). Equity will grant rescission of a contract based on unilateral mistake when there is no prejudice to the other party and the parties can be returned to the status quo ( see Broadway-111th Street Assoc. v. Morris, 160 AD2d 182 ([1st Dept 1990]; Ferend Co., Inc. v. State of New York, 251 AD 13 ([3rd Dept 1937]); Batto v. Westmoreland Realty Co., Inc., 231 AD 103 [2nd Dept 1930]). The word "irrevocable" did not have the same meaning to the various participants. Cohen believed that, after signing the Stipulation, he could take time to decide whether he wanted to retire, and if he did not want to, he could withdraw his agreement (Tr at 102; 202) which is consistent with DOE's voluntary retirement procedures ( see Matter of Folta v. Sobol, 210 AD2d 857 (3rd Dept 1994). Barton's understanding was that what the term meant was that Cohen could not return to a fulltime position (Tr at 236) but could work per diem and per session, which Barton admitted was not usually part of an irrevocable retirement (Tr at 267-269, 278; 303-304; Affidavit dated April 8, 2003). Teachers who irrevocably retire are generally ineligible to return to per session work (Plaintiff's Ex 3).
This is not a situation where Cohen was unilaterally mistaken in comprehending the Stipulation, which alone is insufficient grounds to rescind an agreement ( see Living Arts, Inc. v. Kazuko Hillyer Intl., Inc., 166 AD2d 284 [1st Dept 1990]).
City Defendants argue that the Court should not consider any testimony which contradicts the Stipulation based on the parol evidence rule. However, that argument was waived by their failure to object to the parol evidence offered, and by their own introduction of parol evidence on that issue ( see Rodgers v. 72nd St. Assoc., 269 AD2d 258, 259 [1st Dept 2000]).
Because Barton allowed Cohen to return to work (although only for per diem and per session teaching), coupled with the fact that the copy of the Stipulation signed by Cohen was a fax with the operative word "irrevocable" being difficult to discern, I find that the City Defendants were at fault in creating the impression that the retirement was revocable. Further, DOE created the mistake because the Stipulation, which by its terms reflected "all the terms and conditions agreed upon by the parties," did not reflect the terms of the per diem and per session agreement. As previously noted, I reject City Defendant's argument that by the time DOE learned that Cohen wanted to rescind the Stipulation, DOE already relied upon it, and therefore, it would be inequitable to allow Cohen to rescind the Stipulation. No real prejudice will result to DOE if the parties are returned to the status quo, which would result in a hearing under Education Law § 3020-a. Even if DOE did not find out about Cohen's desire to rescind the Stipulation until June 20, it is undisputed that the hearing would not have commenced until September. Moreover, as previously noted, although DOE claims that witnesses would be hard to locate because the students may not be in the same school, Barton acknowledged that DOE has access to that information.
Preliminary Injunction
The Court agrees with City Defendants that Cohen has not shown that he is entitled to a preliminary injunction because loss of employment does not constitute irreparable harm ( see In re Valentine v. Schembri, 212 AD2d 371 [1st Dept 1995]; Matter of Hill v. Reynolds, 187 AD2d 299 [1st Dept 1992]). Because City Defendants have not cross moved for relief, the Court will not reach their arguments concerning Cohen's failure to (1) file a notice of claim on his fraud and misrepresentation claims, and (2) state a claim for violation of the Taylor Law ( see Thomas v. The Drifters, Inc., 219 AD2d 639, 640 [2nd Dept 1995]). The Court, however, reaches City Defendants' argument that this action should have been brought as an Article 78 proceeding, which is now time-barred. In O'Garro v. New York State Dept of Mental Hygiene ( 46 NY2d 853), the Court converted an Article 78 proceeding to a plenary action where a hospital employee sought to rescind a stipulation, based on fraud, which settled a disciplinary proceeding. The Court found the claim was not time barred by the four month statute of limitations ( id.). In reaching its determination, the Court adopted the reasoning of the dissent below, who noted that the employee sought to rescind the stipulation based on fraud, and was not challenging an administrative determination under Article 78 ( see O'Garro v. New York State Dept of Mental Hygiene, 60 AD2d 546 [1st Dept 1977], revd 46 NY2d 853).
To the extent that there are cases providing that an Article 78 proceeding is the proper vehicle for judicial review of a determination made by the New York State Teachers' Retirement System (not involved here), the Court notes that Education Law § 509 [9] specifically provides for such review.
Similarly, this litigation was properly brought as an action because Cohen does not seek to challenge an administrative determination under Article 78. Like the employee in O'Garro, supra, Cohen seeks to rescind a stipulation which settled a disciplinary hearing. To the extent that dicta in Haberbush v. Christensen ( 103 AD2d 996 [3rd Dept 1984]) supports a contrary interpretation, this Court follows O'Garro v. New York State Dept of Mental Hygiene, supra.
Accordingly, it is
DECLARED that Stipulation is not valid and is of no force and effect; and it is further
ORDERED that the motion for a preliminary injunction is denied; and it is further
ORDERED that Plaintiff serve a copy of this Decision and Order, with
Notice of Entry, on Defendants within 20 days from the date hereof.