Opinion
2021-50512
06-02-2021
Stephen Lord and Fran Lord, Plaintiffs, v. The Limited Liability Company[1] C/O Adornetto & Company LLC DBA Glenn Island Harbor Club, Defendant.
For Plaintiffs Michael Goldman For Defendant Michelle DeGiorgio, Esq. Law Offices of Mario Demarco, P.C.
Unpublished Opinion
For Plaintiffs Michael Goldman
For Defendant Michelle DeGiorgio, Esq. Law Offices of Mario Demarco, P.C.
HON. TERRY JANE RUDERMAN, J.S.C.
The following papers were considered in connection with the motion by plaintiffs for an order permitting them to amend the caption and for summary judgment, and other relief:
Papers/Numbered
Notice of Motion, Affirmation, Exhibits A - C 1
Affirmation in Opposition, Exhibits A - D 2
Reply Affirmation, Exhibit A 3
This action arises out of a contract dated June 20, 2019, pursuant to which defendant Glen Island Harbour Club (sometimes referred to, as used in the contract, as "Caterer") agreed to provide the hall, catering, serving staff, etc. for the Bat Mitzvah party for plaintiffs' daughter, scheduled for May 17, 2020. Plaintiffs Stephen Lord and Fran Lord (sometimes referred to, as used in the contract, as "Patrons") tendered a deposit of $15,200 to defendant. Prior to the scheduled date, defendant informed plaintiffs that the event could not be held at their venue at that time due to COVID-19. Plaintiffs have requested that their deposit be refunded, without success.
Plaintiffs commenced this action on January 26, 2021, alleging causes of action for breach of contract, unjust enrichment, and quantum meruit. Defendant filed its answer on March 4, 2021. On March 24, 2021, plaintiffs filed both a notice to take defendant's deposition as well as a request for a preliminary conference. Plaintiffs then moved for summary judgment and other relief by notice of motion filed April 8, 2021, relying on the pleadings and the parties' contract; the forms of relief they seek in addition to summary judgment are leave to amend the caption and, in the event summary judgment is denied, an order directing defendant to provide them with a list of all parties it failed to provide since March 2020, including copies of all contracts and contact information for those patrons.
Initially, leave to amend the caption needs no discussion, as it is unopposed and will cause no prejudice.
Summary Judgment
In the branch of the motion seeking summary judgment, plaintiffs contend that based on the terms of their contract, defendant has an obligation to refund their deposit. Plaintiffs direct the Court's attention to paragraph 23 of the contract, which provides that
"Caterer has the right to substitute another room in lieu of the room contracted for, if such room is unavailable due to fire, water damage, accident, catastrophe or due to any other circumstances including unintentional errors in booking a room previously contracted for. If no room is available, Caterer shall have the option of cancelling this contract without further liability, or transferring the affair to other premises with Patron's approval in which event contract shall remain in full force and effect."
Plaintiffs argue that the foregoing provision must be treated under these circumstances as having resulted in the cancellation of the contract due to COVID-19, so that defendant must return the deposit. Plaintiffs also argue that the aspect of the provision giving the Caterer the unilateral right to cancel at any time if the room is unavailable "due to any circumstances" renders the contract unenforceable as unconscionable, illusory, and based on a failure of consideration.
Defendant maintains in opposition that it has no obligation to refund plaintiffs' deposit, and that instead, plaintiffs have an obligation to reschedule the party, and their refusal to reschedule the party constitutes a breach of contract. It opposes plaintiffs' application for summary judgment on several grounds, arguing first that the motion is premature because discovery has not yet been conducted, and next, that issues of fact exist as to the terms of the agreement, although it simultaneously suggests that the agreement is unambiguous and clearly permits the Caterer to retain a Patron's deposit in the event a postponement is necessary due to a cause beyond the Caterer's control.
Defendant relies for the latter argument on contract paragraphs 13 and 16. Contract paragraph 13 provides:
"Caterer shall have no responsibility or liability for failure to supply any service or to otherwise comply with this contract when prevented from doing so by strike, fire, mechanical or electrical failure, accidents or any cause beyond Caterer's reasonable control or by orders or regulations of any governmental authority, or by failure caused by fuel supply, water, gas, electricity, air conditioning, or any other facility or energy shortage or malfunction" (emphasis added).
Paragraph 16, which permits the Caterer to retain any portion of the deposit already received upon cancellation by the Patron, provides that
"Failure to make any required payments shall in no way affect the validity of this contract. [¶] Patron agrees to make said payment or payments on account when due and shall be liable, regardless of whether or not he has cancelled this contract. Notwithstanding the foregoing, Caterer shall have the right, at its election, in the event Patron fails to pay any part of the payment on account when due, to cancel this contract without further liability and retain any portion of the payment on account already paid as liquidating damages regardless of whether or not the room is rebooked."
The contract does not contain a "force majeure" clause.
In another recent case in which a planned party could not go forward due to the COVID-19 pandemic (see Sanders v Edison Ballroom LLC, 2021 NY Slip Op 30900(U), 2021 NY Misc. LEXIS 1240, *6-7 [Sup Ct, NY County 2021]), the court granted summary judgment in favor of the customers and directed the refund of their deposit, because the parties' contract contained a clause providing for a refund in the event performance of the agreement became "illegal or impossible" because of "acts of a governmental authority" (id.).
Discussion
The initial question is whether addressing the merits of the summary judgment motion is premature. Such a motion is proper once issue has been joined, even in the absence of discovery, where the essential material facts are not in dispute (see CPLR 3212). "In order for a motion for summary judgment to be denied as premature, the opposing party must provide an evidentiary basis to suggest that discovery might lead to relevant evidence or that the facts essential to justify opposition to the motion were in the exclusive knowledge and control of the moving party" (Sterling Natl. Bank v Alan B. Brill, P.C., 186 A.D.3d 515, 518 [2d Dept 2020]). Defendant does not specify what information it needs to oppose summary judgment, that is uniquely in plaintiff's possession. Furthermore, although plaintiff has made discovery demands, both before and in the context of this motion, those demands fail to establish that discovery is necessary before this motion can be addressed, so as to render this motion premature.
The next question is whether this dispute can be resolved as a matter of law solely by reference to the terms of the contract. In a dispute between parties to a contract as to their rights under the contract, it is the task of the court to examine the contract to determine if it is unambiguous, that is, whether "the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion" (Greenfield v Philles Records, 98 N.Y.2d 562, 569 [2002] [internal quotation marks and citation omitted]). "[I]f the agreement on its face is reasonably susceptible of only one meaning, a court is not free to alter the contract to reflect its personal notions of fairness and equity" (id. at 569-570). In addition, "courts should be extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include" (Rowe v Great Atl. & Pac. Tea Co., 46 N.Y.2d 62, 72 [1978]). "[C]ourts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing" (see Reiss v Financial Performance Corp., 97 N.Y.2d 195, 199 [2001] [internal quotation marks and citation omitted]).
If several interpretations of a provision are possible, a trial may be necessary to consider the surrounding facts and circumstances to determine the intent of the parties (see 67 Wall Street Co. v Franklin Natl. Bank, 37 N.Y.2d 245, 248-249 [1975]). "[I]n cases of doubt or ambiguity, a contract must be construed most strongly against the party who prepared it and favorably to a party who had no voice in the selection of its language" (67 Wall Street Co. v Franklin Natl. Bank, 37 N.Y.2d at 249 [1975], citing 4 Williston, Contracts, § 621 and 10 NY Jur, Contracts, § 223). Here, the determination can be made by analysis of the four corners of the contract.
Review of the highlighted contract terms reflects that defendant's reliance on paragraphs 13 and 16 is misplaced. Contract paragraph 13 merely provides that the Caterer shall have no responsibility or liability if it is unable to comply with the contract due to a cause beyond the Caterer's control. Based on that paragraph, if the scheduled event cannot occur for reasons outside the caterer's control, the patron may not sue the caterer for consequential damages resulting from the non-occurrence of the planned event. However, protecting the Caterer against liability is not the same as allowing the Caterer to retain the deposit; indeed, the subject of the deposit is not mentioned in paragraph 13.
Nor does paragraph 16 justify defendant's position. Although that provision makes specific reference to the Caterer's right to retain the deposit, that right arises in the event the Patron fails to pay any part of the payment on account when such payments are due. Here, there is no assertion that the Patrons failed to make a payment that was contemplated by the contract, so defendant is not entitled to retain the deposit in reliance on that paragraph.
Notably, neither of those provisions explicitly require a Patron to reschedule an event that could not take place for reasons outside the Caterer's control, or define a Patron's failure to do so as a breach of the contract.
The Court therefore turns to contract paragraph 23, on which plaintiffs rely for the refund they seek. It provides that
"Caterer has the right to substitute another room in lieu of the room contracted for, if such room is unavailable due to fire, water damage, accident, catastrophe or due to any other circumstances including unintentional errors in booking a room previously contracted for. If no room is available, Caterer shall have the option of cancelling this contract without further liability, or transferring the affair to other premises with Patron's approval in which event contract shall remain in full force and effect" (emphasis added).
In addition to giving the Caterer the right to substitute another room if the facility finds itself unable to provide the particular room it promised, whether due to outside forces or its own actions, the provision recites that the Caterer has the option to cancel the contract if it has no other available rooms to provide. However, the use of the word "option" there is misleading, since the only other option the paragraph provides for is one that requires the Patron's approval. In circumstances where the Patron's approval is not obtained, and the Caterer is unable to provide any room in the promised location, the only option available to the Caterer is cancellation of the contract. That is essentially the circumstances facing the Caterer here.
As was previously observed regarding contract paragraphs 13 and 16, nothing in paragraph 23 gives the Caterer the option of treating the catastrophic circumstance that caused its inability to provide the party venue as entitling it to the postponement and rescheduling of the event by the Patrons. Indeed, while defendant refers to these circumstances as a "postponement" rather than a "cancellation" of the event, the contract nowhere uses any variation of the word "postpone."
This Court therefore agrees with plaintiffs, that the effect of contract paragraph 23 is that if the Caterer is unable to make either the selected room or any other room available for the intended event, whether the unavailability of those rooms is a catastrophe outside the Caterer's control, or due to the Caterer's actions, unless the Patron agrees to some other arrangement, then the only "option" is the cancellation of the contract. Nothing in the contract supports defendant's position that the Patron has a contractual obligation to reschedule the event for a date years later.
In the alternative, the Court also finds that the one-sided nature of paragraph 23 creates an impermissible inequity. That paragraph allows the Caterer to cancel the contract at any time by informing the Patron that the reserved room is "unavailable" not necessarily as a result of events out of the Caterer's control, but also possibly based on the Caterer's conduct or choice, such as a belated discovery of a double-booking, or even, theoretically, on the Caterer's last-minute receipt of a more advantageous offer from a different Patron if it has no alternative spaces available. This, in effect, gives the Caterer the unilateral ability to cancel a Patron's contract at any time for its own advantage.
An agreement is illusory, and therefore unenforceable, if it lacks mutuality of obligation (see Dorman v Cohen, 66 A.D.2d 411, 415 [1st Dept 1979). "There is no mutuality of obligation where one party can terminate his promise at will" (Dorman v Cohen, 66 A.D.2d at 418). In Dorman, "the plaintiffs, but not defendants, ha[d] the option to break the agreement" leading the Court to conclude that the agreement was "illusory for lack of mutuality of obligation," since "plaintiffs did not, in effect, bind themselves to do anything" (66 A.D.2d at 415; see also Cari, LLC v 415 Greenwich Fee Owner, LLC, 91 A.D.3d 583, 583 [1st Dept 2012]).
For the foregoing reasons, this Court holds that, as a matter of law, under the terms of the parties' contract, the contract was cancelled when the event could not be held as scheduled due to the COVID-19 pandemic, and that therefore, defendant had a contractual obligation to refund plaintiffs' deposit. Plaintiffs are therefore entitled to summary judgment on their cause of action for breach of contract. The causes of action for unjust enrichment and quantum meruit are duplicative of the breach of contract claim.
To the extent plaintiffs' cause of action for breach of contract as contained in the complaint includes a demand for $25,000 in damages in addition to the return of their deposit, nothing in plaintiff's motion papers establishes any basis for such relief.
Based on the foregoing, it is hereby
ORDERED that the branch of plaintiffs' motion seeking to amend the caption is granted, and the caption shall be amended so as to read as follows:
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
Index No. 50937/2021
STEPHEN LORD and FRAN LORD, Plaintiffs,
-against-
HOMESTYLE HOSPITALITY LLC
C/O ADORNETTO & COMPANY LLC
DBA GLENN ISLAND HARBOUR CLUB, Defendant.
and it is further
ORDERED that the branch of plaintiffs' motion seeking summary judgment is granted on plaintiffs' first cause of action to the extent that defendant is held to be liable to plaintiffs for the return of their contract deposit of $15,200, and it is further
ORDERED that plaintiffs are entitled to enter judgment against defendant in the amount of $15,200.00, and the Clerk is directed to enter judgment accordingly.
This constitutes the Decision and Order of the Court.