Opinion
23712/03.
Decided August 1, 2005.
DECISION AFTER TRIAL
This is an action grounded in breach of contract commenced by Naylor Engineering, P.C., (hereinafter, the plaintiff) against Lucchesi Engineering, P.C. (hereinafter, the defendant) to recover the sum of $11,800 which allegedly represents the balance due on and agreement for professional services. The plaintiff has plead three causes of action, i.e., (1) breach of contract; (2) an account stated, and (3) unjust enrichment.
The defendant by its verified answer has raised two affirmative defenses and one counterclaim. The first affirmative defense sound in set-off and or surety ship. The second affirmative defense raised is breach of contract by the plaintiff resulting in monetary damages to the defendant. As for a counterclaim, the defendant seeks the sum of $12,857.59 as damages and the cost of "cover" for the plaintiff's failure to complete the parties' agreement for professional engineering services. The Court after trial makes the following findings of fact and conclusions of law.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In the winter of 2002, the defendant entered into a professional agreement with the Rockville Centre Unified School District (hereinafter, School District) to provide engineering services for upgrades and renovations at the Covert Elementary School in Rockville Centre, New York. The agreement provided for upgrades to the heating, ventilation and air conditioning units in various locations within the Covert Elementary School plant. These services are known in the engineering profession and industry as HVAC services.
In an effort to implement the professional services agreement, with the School District, the defendant sought the services of the plaintiff, a professional engineering firm for provide of the draft of engineering plans and specifications for the project. There were several written proposals drafted and tendered by the plaintiff to the defendant, and a counter offer made by the defendant. The defendant's last counter offer was for payment of $31,800. The plaintiff never executed a formal contract agreement with the defendant, but performed the requested services, and agreed upon the total sum for services in a writing dated April 1, 2002 [Pl. Exh. 6 In Evid]. The defendant's counteroffer was embodied in its letter dated February 7, 2002, addressed to the plaintiff. This letter proposed that the plaintiff provide the defendant with "a CADD drafted set of design plans and related specifications within six weeks of the agreement to begin" [sic] [Pl. Exh. 3A In. Evid]. Further, the Court finds that pursuant to the defendant's letter proposal of February 7, 2002, the defendant was to handle "all" bid phase efforts", and that plaintiff's employee, Robert Albanese, was to answer any questions from bidders related to the design and specifications provided by the plaintiff to the defendant. The defendant in its February 7, 2002 letter proposal rejected any formal contract or written agreement as a vehicle for the parties' engagement. By the same letter proposal, the defendant assumed the obligation of all clerical support [Pl. Exh. 3A In Evid]. The Court finds the defendant authorized the commencement of the plaintiff's performance in a letter dated March 13, 2002 [Pl. Exh. 4 In Evid].
The plaintiff provided the first of several invoices, as an accounting of the services performed to the date, on April 1, 2002. The invoice was based on the defendant's counter offer of February 7, 2002, for $31,800. The plaintiff's initial invoice dated April 1, 2002, was a billing for 34.67% of the services rendered. The billing provided for three progress payments. The initial request for payment was in the sum of $11,025.00. It covered the period for services rendered of February 1, 2002 through March 31, 2002 [Pl. Exh. 6 In Evid]. As of April 15, 2002, the plaintiff submitted the second billing invoice for payment for the period of April 1 to April 15, 2002, in the sum of $13,305.00 [Pl. Exh. 7 In Evid]. It appears from this second billing that there was a balance due from the proceeding billing of $11,025.00. The total sum claimed by the plaintiff as of April 15, 2002 was $24,330.00 [Pl. Exh. 7 In Evid].
The plaintiff's invoice for the period April 16, to May 8, 2002, dated May 8, 2002 [Pl. Exh. 8 In Evid] was in the sum of $31,800. This latter invoice provided for payment of all past balances due on delivery of the plans and specifications to the defendant [Pl. Exh. 8 In Evid]. The Court finds, the defendant had not tendered any payment to the plaintiff through May 8, 2002 for service rendered on its behalf. Mr. John W. Naylor, the plaintiff's principal, had communicated to his employee Mr. Albanese sometime between April 16 and May 1, 2002, that he no longer wanted to perform for the defendant as he had not been paid by the defendant. In the same conversation, Mr. Naylor acknowledged to his employee that he had no objection to Mr. Albanese and Mr. Gerry Rosen, his partner, continued performances for the defendant on the Covert School project. Mr. Albanese and Mr. Rosen were the individuals who actually drafted and prepared the draft plans and specifications for the HVAC project. They actually delivered the plans to the defendant's principal, Joseph Lucchesi, on May 9th, 2002. The defendant subsequently used those plans in its contract proposal for the Rockville Centre Unified School District. The defendant was paid for its proposal and plans (which incorporated the plaintiff's draft and specifications) after they were approved by the New York State Education Department for implementation.
Despite the defendant's claim that the plaintiff missed a deadline for delivery of the design plans and specifications to it for submission to the State Education Department, the Court finds there was no evidence offered of any written express terms as to a particular deadline date for delivery of the plans and specifications by the plaintiff to the defendant, and that the defendant was paid for a proposal which incorporated the plaintiff's work. Further, the Court finds the plaintiff as of August 2002, had received only $20,000 from the defendant for service rendered. The plaintiff seeks to recover the sum of $11,800 allegedly due under an agreement between the parties.
ISSUE
The fundamental questions raised by this litigation are:
1. Whether the parties created an enforceable contract, i.e. an actual meeting of the minds on all of the material terms and elements of an agreement; 2. If so, whether the plaintiff is entitled to recover the difference between $31,800 as contained in the defendant's February 7, 2002, proposal and the $20,000 tendered by the defendant for the plaintiff's performance; 3. Whether the plaintiff breached an agreement with the defendant, and whether defendant was entitled to withhold $11,800 as the cost to cover for any breach by the plaintiff; and 4. Whether the defendant was entitled to deduct the sum of $4,000 from its obligation to the plaintiff to pay wages of the plaintiff's former employee in absence of a written agreement to pay any such debt owed by the plaintiff?
THE LAW
"If a material element(s) of a contemplated contract is left for future negotiations, there is no contract enforceable. . . . "Price is a material element of any contract and an agreement to agree thereon in the future is too indefinite to be enforceable ( St. Regis Paper Co. v. Hubbs Hastings Paper Co., 235 NY 30, 36). In adjudicating the rights of parties to a contract, Courts may not fashion a new contract under the guise of contract construction ( Morlee Sales Corp. v. Manufacturers Trust Co., 9 NY2d 16, 210 NY S. 2d 516, 172 N.E. 2d 280), rather, they are required to discern the intent of the parties "to the extent that [the parties] evidenced what they intended by what they wrote." ( Laba v. Carey, 29 NY2d 302, 308, 327 N.Y.S. 2d 613. . . . .). Where the intention of the parties is clearly and unambiguously set forth, effect must be given to the intent as indicated by the language used. (10 NY Jur., Contracts § 193; Hall Co. v. Orient Overseas Assoc., 65 AD2d 424, 411 N.Y.S.2d 233, affd. 48 NY2d 958, 425 N.Y.S. 2d 66 . . .). Slatt v. Slatt, 64 NY2d 966, 967, 488 N.Y.S.2d 645, 646.
As a general rule of contract law, a promise, not under seal, made by one party with none by the other is void, for unless both are bound so that either can sue the other for a breach, neither is bound. If, however, there is a sufficient consideration mutual promises are not essential, for the consideration supports the promise although made by one party only. ( Justice v. Lang, 42 NY.493). Even when the obligation of a unilateral promise is suspended for want of mutuality at its inception, still upon performance by the promisee a consideration arises "which relates back to the making of the promise, and it becomes obligatory." ( Willetts v. Sun Mutual Ins. Co., 45 NY 45, 47). Grossman v. Schenker, 206 NY 466, 468 ( see, Richman v. Brookhaven Servicing Corp., 80 Misc 2d 563, 363 N.Y.S.2d 73).
To prove a unilateral contract, the plaintiff must establish that the defendant's alleged promise was made and understood, not as a mere expression of intention, but as the assumption of a binding obligation in consideration of a promise given by the plaintiff in return, or performance by the plaintiff of a stipulated act. Frankenberger v. Schneller et al, 258 NY 270, 273. "The doing of an act by the promisee which he need not have done unless he chose but being done at the instigation of the promissor, completes the contract and makes the promise binding (see 1 Williston, Contracts [3d ed.] § 13; White v. Baxter, 71 N.Y.254, 259; Matter of Larney, 148 Misc. 871, 874-878). The consummation of a unilateral contract vests in the promisee an indefeasible right to the promised benefit. ( Scoville v. Surface Tr., 39 Misc 2d 991). Bisbing, etal v. Sterling Precision Corporation, etal, 34 AD2d 427, 429, 312 N.Y.S.2d 305, 308.
ANALYSIS
Here, although there were several offers and counter offers between the parties starting on February 7, 2002 through March 13, 2002, there was a definite offer made by the defendant in its February 7, 2002 letter, and its March 13, 2002 letter. The sum offered for the plaintiff's performance was $31,800. The nature of the performance requested was a "joint professional service[s]". . ." [Pl. Exh. 3A In Evid]. The details of the scope of work was acknowledged by the defendant to be contained in the plaintiff's spread sheet provided to the defendant. Robert Albanese, plaintiff's employee who was the designer of the draft plans, drawings and specifications, was to provide them to the defendant in accordance with the original February 7, 2002 offer.
The plaintiff was to assist Mr. Albanese to provide the defendant with a CADD drafted set of design plans and related technical specifications within six(6) weeks of "our agreement to begin."[sic] [Pl. Exh. 3A In Evid]. The defendant was to handle all bid phase efforts with Mr. Albanese answering any questions from bidders related to the design and the issuance of any related addenda if required.
In accordance with the defendant's original February 7, 2002, written offer, the defendant was to provide all clerical support. The defendant offered the plaintiff a lump sum fee of $33,000 [Pl. Exh 3A In Evid], however, as of March 13, 2002, the lump sum offer of the defendant was modified to $31,800. Further, the defendant authorized the plaintiff to commence performance in its March 13, 2002 letter but did not specify a commencement date [Pl. Exh. 4 In Evid]. Furthermore, Here, the defendant rejected, in its written proposal, any written bilateral agreement, and requested mere performance by the plaintiff.
The Court finds the plaintiff evidenced its acceptance of the defendant's unilateral offer by its performance of the services requested by the defendant, and in its first billing invoice of April 1, 2002, by the use of the defendant's lump sum figure of $31,800. [Pl. Exh. 6 In Evid]. Although the plans and specifications were not provided as of April 24, 2002 (the six weeks from March 13, 2002), the defendant expressed a willingness to accept delivery of the draft plans and specifications by the plaintiff as of May 8, 2002 [Pl. Exh. 10 In Evid] in a hand written statement to the plaintiff by the defendant's principal. This latter expression operated as a waiver by the defendant of any requirements of delivery of the plans and specifications prior to May 9, 2002(Morris v. Morris, 74 AD2d 490, 492, 428 N.Y.S. 2d 10, 12; Gresser v. Princi, 128 AD2d 752, 752-753, 513 N.Y.S.2d 462, 463-464).
Here, there was nothing left for future negotiations, and the sum to be paid by the defendant for the plaintiff's performance was definite, and therefore, the defendant made an offer enforceable upon acceptance by the plaintiff ( St. Regis Paper Co. v. Hubbs Hastings Paper Co., supra). A promise, not under seal, made by one party with none by the other is void, for unless both are bound so that either can sue the other for a breach, neither is bound. If, however, there is a sufficient consideration mutual promises are not essential, for the consideration supports the promise although made by one party only. ( Justice v. Lang, supra). Even when the obligation of a unilateral promise is suspended for want of mutuality at its inception, still upon performance by the promisee a consideration arises "which relates back to the making of the promise, and it becomes obligatory." ( Willetts v. Sun Mutual Ins. Co., supra). Grossman v. Schenker, supra; (see, Richman v. Brookhaven Servicing Corp., supra). The defendant's letters to the plaintiff of February 7, 2002 and March 13, 2002 contained all the material terms of a legally enforceable contract ( St. Regis Paper Co. v. Hubbs Hastings Paper Co., supra) and evidenced an intent to contract and be legally bound by the defendant. (Morlee Sales Corp v. Manufacturers Trust Co., supra) (Laba v. Carey, supra). The defendant made a unilateral promise which was accepted by the plaintiff's performance and created a unilateral contract which was enforceable (Willetts v. Sun Mutual Ins. Co., supra) (St. Regis Paper Co. V. Hubbs Hastings Paper Co., supra). The defendant received the design plans and specifications on May 9, 2002, for which it contracted for with the plaintiff.
As it was the defendant who rejected a formal contract agreement, which may have or could have contained a specific date for delivery of the draft plans and specifications, the Court finds that the plaintiff substantially performed the terms of the requested offer of the defendant as contained in the February 7, and March 13, 2002 proposals. Further, the plaintiff's timely delivery of the design plan and specifications through its employee Robert Albanese. The plans as drawn by Mr. Albanese represented the work product of the plaintiff. Furthermore, the Court finds the defendant did use those plans and specifications in the performance of its agreement with the Rockville Centre Unified School District and was paid for same. Finally, the draft plans and specifications were approved by the New York State Education Department, and the defendant suffered no financial loss on its contract with respect to the plaintiff's performance.
The defendant alleges in its counterclaim it was obligated to pay the sum of $4,000 to Mr. Robert Albanese for an outstanding obligation incurred by the plaintiff with respect to its employment of Mr. Albanese. Any promise to answer for the debt of another must be evidenced by a writing to satisfy the Statute of Frauds, and to be enforceable. G.O.L. § 5-701[a][2]. Kramer, etal v. Harrington, Wells Rhodes, LTD, 275 AD2d 302, 711 NYS2d 507 . The Court finds that inasmuch as Mr. Albanese was an employee of the plaintiff until June of 2002, subsequent to the delivery of the draft plans and specifications to the defendant, any financial obligation the plaintiff may have had to Mr. Albanese was its obligation, and absent written evidence of an obligation the defendant had no right to deduct any sum from the $31,800 due the plaintiff for payment to Mr. Albanese. Further, the delivery of the plans and specification by Mr. Albanese entitled the plaintiff to recovery for same as the plans were delivered while Mr. Albanese was in the plaintiff's employment.
With respect to the plaintiff's lack of participation in the bid phase, the Court finds that in accordance with the defendant's own written offer, the plaintiff had no obligation to participate in the bid phase. Further, the defendant by the same written offer assumed the obligation of all clerical support.
As of August 2002, the defendant had paid the plaintiff $20,000 of the $31,800 due pursuant to their agreement.
CONCLUSION
The Court finds the defendant by its February 7, and March 13, 2002 proposals which constituted an offer, and the plaintiff's performance of same created a unilateral agreement . The plaintiff had substantially performed it obligations under the agreement therefore, the parties had entered an enforceable unilateral contract. The Court finds the defendant owes to the plaintiff the balance due on the contract of $11,800, as the plaintiff did not breach the unilateral contract.
The Court awards the plaintiff a money judgment against the defendant in the sum of $11,800, with interest, costs and disbursements.
The defendant is not entitled to recover from the plaintiff as there was no breach of contract by the plaintiff, and the defendant was not entitled to deduct $4,000 from the sum due the plaintiff to pay an obligation of the plaintiff as there was no written document providing for the defendant to answer for a debt or obligation of the plaintiff G.O.L. § 5-701[a][2]. Finally, the Court finds the defendant did not incur any damages attributable to the plaintiff's non performance.
This constitutes the decision and order and judgment of this Court.
So ordered.