Opinion
504557/16
05-30-2019
SALEM TRUCK LEASING, INC., Plaintiff, v. MAYA OVERSEAS FOOD, INC., Defendant.
Attorney for Plaintiff Kenneth V. Madden, Esq. 186 Montague Street, 4th Floor Brooklyn, New York 11201 (718) 246-4330 Attorney for Defendant Prabhkaran S. Bedi, Esq. Bedi Rindosh 1605 John Street Suite 305 Fort Lee, New Jersey 07024
Attorney for Plaintiff
Kenneth V. Madden, Esq.
186 Montague Street, 4th Floor
Brooklyn, New York 11201
(718) 246-4330
Attorney for Defendant
Prabhkaran S. Bedi, Esq.
Bedi Rindosh
1605 John Street
Suite 305
Fort Lee, New Jersey 07024
Francois A. Rivera, J.
The following is the decision, order and judgment after a non-jury trial in the above captioned matter on the claims of plaintiff Salem Truck Leasing, Inc. (hereinafter Salem) against defendant Maya Overseas Food, Inc. (hereinafter Maya).
BACKGROUND
On March 28, 2016, Salem commenced the instant action by electronically filing a summons and verified complaint with the Kings County Clerk's Office (KCCO). The complaint contained nine allegations of fact in support of three causes of action. The first cause of action alleged that Maya breached a truck lease agreement (hereinafter the lease) for a Salem truck identified as a 2011 International 8600 truck described in the lease agreement as Unit 4267 (hereinafter the subject truck). The second cause of action is for an account stated. The third cause of action is for reasonable attorney's fees.
On October 6, 2016, Maya joined issue by filing a verified answer with the KCCO. The verified answer denied the allegations of fact set forth in paragraph three, four, six, seven and nine of the complaint.
THE TRIAL
A non-jury trial was conducted on December 17th and 20th of 2018. Salem called Scott Steinberg, its chief operating officer and Umesh Mody (hereinafter Mody), Maya's president, as witnesses on its direct case. Salem admitted four exhibits into evidence labeled one through four. Exhibit one was the subject lease between the parties. Exhibit two was Salem's letter to Maya, dated August 29, 2015, notifying it that it was in breach of the subject lease. Exhibit three was a copy of the instant complaint. Exhibit four was a copy of the settlement agreement (hereinafter the settlement agreement) in the instant action. Maya submitted one exhibit into evidence consisting of repair and maintenance records for the subject truck.
At the close of all the evidence, Salem orally moved pursuant to CPLR 3025 (c) to amend the pleading to conform to the evidence. Maya did not object to the request. Neither Salem nor Maya advised the Court of the settlement agreement before proceeding to trial in the instant action. The Court only became aware of its existence when it was admitted into evidence during the trial.
Despite settling their dispute, neither Salem nor Maya amended the pleading to change the cause of action from a breach of the lease agreement to a breach of the settlement agreement. Nor did either party make a motion to enforce the settlement agreement pursuant to CPLR 2014. The Court directed the parties to submit their respective request for findings of fact pursuant to CPLR 4213 (a). Both sides did so during the week of March 20, 2019.
FINDING OF FACT
Salem is a company engaged in the Full Maintenance leasing of commercial vehicles to companies in order to transport their goods. It has a principal place of business located at 9595 Avenue D, Brooklyn, New York 11236 and employs 200-250 people during the relevant times. The Full Maintenance leasing of a commercial vehicle involves a contract which contains a fixed rate together with a variable rate depending on the number of miles driven in return for the use of the commercial vehicle by the lessor. In Full Maintenance leasing of a commercial vehicle, the cost of maintenance of the leased vehicle is included in the cost of the lease.
Maya is a company that distributes ethnic foods such as lentils, rice and spices to stores located within a 200 mile radius of its headquarters in Maspeth, New York. Maya uses trucks to distribute its products and employs approximately 30 people.
In 2010, Maya leased the subject truck from Salem. Mody executed the lease on behalf of Maya. The subject truck was new when it was delivered to Maya. It had a 26 foot body with a lift gate and was originally valued at $ 135,390.00.
Pursuant to the lease, Maya was required to make monthly payments consisting of a fixed rental charge of $ 2,495.00, plus a mileage charge of 7 ½ cents per mile for each mile driven, plus a Consumer Price Index (hereinafter CPI) adjustment. Salem sent Maya monthly invoices because the payments varied each month. The lease was for 6 years or 72 months.
At some point in 2015, Maya stopped making payments pursuant to the lease which constituted a default under the terms of the lease (hereinafter the lease default). Maya was in possession of the subject truck at that time. The lease contains default provisions with several cumulative remedies for Salem in the event Maya defaults. The default provision provided in pertinent part as follows:
If Customer is in Default, Salem may immediately, without notice, discontinue all services to Customer and take possession of the Vehicle and Salem is expressly authorized to enter any location where the vehicle may be and remove, retain and refuse to redeliver the Vehicle to Customer until Default is cured. Such action by Salem shall not constitute a termination of this Agreement. All charges under this Agreement shall continue until the Agreement is terminated or expires. Customer shall pay Salem all of Salem's costs, and expenses including attorney's fees, incurred in collecting amounts due from the Customer or in enforcing any of Salem's rights.
(Exhibit 1, Paragraph 14 [B] )
Notices under the Truck Lease and Service Agreement were to be sent in writing and deemed given when sent via registered mail, regular mail return receipt requested or in person delivery.
On or about August 29, 2015, Salem sent Maya a written notice of termination of the Truck Lease and Service Agreement which required Maya to purchase the subject truck.On March 28, 2016, Salem filed the instant lawsuit against Maya seeking damages premised on Maya's breach of the lease agreement. On July 21, 2016, the parties entered into a Settlement and Modification of Lease Agreement (hereinafter the settlement agreement). The settlement agreement was negotiated by counsel for both parties. The settlement agreement required Maya to make two payments in the amount of $ 6,639.50. Upon receipt of the two payments, Salem agreed to acknowledge that all arrears due under the lease had been satisfied to date. Salem confirmed timely receipt of the two payments. The settlement agreement also extended the lease for seven (7) additional months past the original expiration date.
Under the settlement agreement, the notice provision of the lease was expanded to require notice to Stephen Kressel, at Rothlein, Walsh and Roth, 684 Broadway, Massapequa, New York 11758 in case of Maya; and Theodore C. Richman at Solomon Richman, P.C., 3000 Marcus Avenue, Suite IE5, Lake Success, New York 11042 in case of Salem. Furthermore, by the terms of the settlement agreement, Salem agreed to discontinue the instant lawsuit with prejudice upon completion of payments of the seven month lease extension.
At some point after Maya defaulted on the lease in 2015 and before default was cured, Salem repossessed the subject truck from Maya's place of business and retained possession of the subject truck after the Settlement Agreement was executed. Although Maya made the two requisite payments under the settlement agreement which cured the contract default, Salem did not deliver the truck to Maya after the settlement agreement. Furthermore, Salem did not send Maya monthly invoices during the seven month extension period after the contract default was cured.
In fact, after July 2016, Salem did not communicate with Maya in any way regarding the lease extension. In particular, Salem did not properly notify Maya that Maya had defaulted on the terms of the settlement agreement.
Neither Salem nor Maya advised the Court of the settlement agreement before proceeding to trial in the instant action. Neither party filed the settlement agreement with the Kings County Clerk's office. In fact, the Court only became aware of its existence when it was admitted into evidence during Salem's presentation of its direct case in the trial.
LAW AND APPLICATION
Although the parties had settled their dispute, neither party amended the pleading to change the cause of action from a breach of the lease agreement to a breach of the settlement agreement. Nor did either party make a motion to enforce the settlement agreement pursuant to CPLR 2014.
As the power of a court to declare the law only arises out of, and is limited to, determining the rights of persons which are actually controverted in a particular case, courts generally may not pass on academic, hypothetical, moot, or otherwise abstract questions ( Berger v. Prospect Park Residence, LLC , 166 AD3d 937, 938 [2nd Dept 2018] ). Thus, courts are ordinarily precluded from considering questions "which, although once live, have become moot by passage of time or change in circumstances" (Matter of Hearst Corp. v. Clyne , 50 NY2d 707, 714 [1980] ). When a determination would have no practical effect on the parties, the matter is moot and the court generally has no jurisdiction to decide the matter ( Berger, 166 AD3d at 938 ).
Based on the foregoing, the Court has no jurisdiction to decide the matter of Maya's alleged breach of the lease agreement and Salem's entitlement to damages and attorney's fees stemming from that breach.
The parties to a civil lawsuit are free to chart their own course and may fashion the basis upon which a particular controversy will be resolved ( U.S. Bank National Association v. Gordon, 158 AD3d 832 [2nd Dept 2018] citing Cullen v. Naples, 31 NY2d 818, 820 [1972] ). Furthermore, leave to conform a pleading or the bill of particulars to the proof pursuant to CPLR 3025 (c) should be freely granted absent prejudice or surprise resulting from the delay (see NY Fuel Distributors, LLC v. Eljamal , 162 AD3d 892 [2nd Dept 2018] ).
Accordingly, Salem's oral motion to amend the pleadings to conform to the evidence pursuant to CPLR 3025 (c) is granted. Maya did not object to the application and therefore cannot claim any prejudice or surprise caused by the delay in seeking the amendment.
Salem's pleading as amended pursuant to CPLR 3025 (c) is for three causes of action. The first is for breach of the settlement agreement, the second is for account stated on the settlement agreement, and the third is for damages, inclusive of attorney's fees based on Maya's alleged breach of the settlement agreement.
The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach ( Fernandez v. Abatayo , ––– NYS3d ––––, 2019 NY Slip Op. 03571 [2nd Dept 2019] citing Legum v. Russo , 133 AD3d 638, 639 [2nd Dept 2015] ). A written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms ( Fernandez v. Abatayo , ––– NYS3d ––––, 2019 NY Slip Op. 03571 [2nd Dept 2019] citing MHR Capital Partners LP v. Presstek, Inc., 12 NY3d 640, 645 [2009] ).
An account stated is an agreement, express or implied, between the parties to an account based upon prior transactions between them with respect to the correctness of account items and a specific balance due on them which is independent of the original obligation ( Episcopal Health Services, Inc. v. Pom Recoveries, Inc. , 138 AD3d 917 [2nd Dept 2016] citing Citibank [S.D.] v. Cutler , 112 AD3d 573, 573—574 [2nd Dept 2013] ). A cause of action for an account stated has been described as an alternative theory of liability to recover the same damages allegedly sustained as a result of the breach of contract ( Episcopal Health Services, Inc. , 138 AD3d at 917 citing A. Montilli Plumbing & Heating Corp. v. Valentino , 90 AD3d 961, 962 [2nd Dept 2011] ).
An essential element of an account stated is that the parties came to an agreement with respect to the amount due ( Episcopal Health Services, Inc. , 138 AD3d at 917 citing Raytone Plumbing Specialities, Inc. v. Sano Constr. Corp., 92 AD3d 855, 856 [2nd Dept 2012] ).
"Under the general rule, attorney's fees are incidents of litigation and a prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule" ( LG Funding, LLC v. Johnson and Son Locksmith, Inc. 170 AD3d 1153 [2nd Dept 2019] see also Pickett v. 992 Gates Ave. Corp. , 96 114 AD3d 740 [2nd Dept 2014] ; quoting Hooper Assoc. v. AGS Computers , 74 NY2d 487, 491 [1989] ).
There is no dispute that Maya breached the lease agreement when it stopped making its monthly lease payments in 2015. By the instant settlement agreement, however, Salem resolved all the claims raised by the three causes of action asserted in the complaint. Furthermore, when Salem confirmed receipt of Maya's two payment in the amount of $ 6,639.50, all arrears were extinguished by the terms of the settlement agreement.
In sum, by the plain and unambiguous terms of the settlement agreement, Maya's breach of the lease was cured. Furthermore, by extinguishing all arrears with the two payments in the amount of $ 6,639.50, Salem expressly waived any claim for attorney's fees incurred before the breach was cured.
Furthermore, based on the Courts finding of fact, Salem did not make a prima facie showing that Maya breached the settlement. In particular, Salem did not deliver the subject truck to Maya after the breach of the lease was cured. By not doing so, Salem itself breached the settlement agreement. Also, Salem did not send any bill or invoices to Maya for any amount allegedly due during the seven month period that the lease was extended by the settlement agreement. A significant fact because by the prior history of the parties, the monthly amount due had to be calculated every month based on, among other things, a mileage charge and the application of a CPI adjustment. Furthermore, Salem did not send Maya a notice of its default as required by the settlement agreement which incorporated the terms of the lease agreement.
Based on the foregoing, Salem did not make a prima facie showing that Maya breached the settlement agreement.
Furthermore, by failing to send monthly bills or invoices to Maya, Salem offered no evidence to support a claim for an account stated for the seven month extension period following the settlement agreement.
Inasmuch as Salem failed to make a prima facie showing to support a claim for a breach of the settlement agreement or for an account stated, its claim for attorney's fees pursuant to the alleged breach of the settlement agreement must also fail.
THE DECISION, ORDER AND JUDGMENT OF THIS COURT IS:
The Court has no jurisdiction to decide the matter of Maya Overseas Food, Inc.'s alleged breach of the lease agreement and Salem Truck Leasing, Inc.'s entitlement to damages and attorney's fees stemming from that breach.
Salem Truck Leasing, Inc. has failed to make prima facie showing that Maya Overseas Food, Inc. breached the settlement agreement.
Salem Truck Leasing, Inc. has also failed to make a prima facie showing for an account stated on the seven monthly payments allegedly due and owing pursuant to the settlement agreement.
Salem Truck Leasing, Inc. has also failed to make a prima facie showing of entitlement to attorney's fees based on Maya Overseas Food, Inc.'s alleged breach of the settlement agreement.
The instant action is dismissed.
The foregoing constitutes the decision, order and judgment of this Court.