Schoolman Transp. Sys., Inc. v. Bd. of Educ. of the City Sch. Dist. of N.Y.

Full title: Schoolman Transportation System, Inc. d/b/a Classic Coach, Plaintiff, v…

Court: Supreme Court, New York County

Date published: Mar 31, 2016

2016 N.Y. Slip Op. 50438 (N.Y. Sup. Ct. 2016)

Opinion

651803/13

03-31-2016

Schoolman Transportation System, Inc. d/b/a Classic Coach, Plaintiff, v. The Board of Education of the City School District of the City of New York, City of New York, New York City Department of Education, Defendants.

Attorneys for Plaintiff: Jeffrey Basso, Esq. Campolo Middleton & McCormick LLP 4175 Veterans Memorial Highway Suite 400 Ronkonkoma, NY 11779 Tel.: 631-738-9100 Attorneys for Defendants: Scott Glotzer, Esq., Assistant Corporation Counsel Zachary Carter, Corporation Counsel of the City of New York 100 Church Street New York, NY 100007 Tel.: 212-356-2536

James E. d'Auguste, J.

Attorneys for Plaintiff: Jeffrey Basso, Esq. Campolo Middleton & McCormick LLP 4175 Veterans Memorial Highway Suite 400 Ronkonkoma, NY 11779 Tel.: 631-738-9100 Attorneys for Defendants: Scott Glotzer, Esq., Assistant Corporation Counsel Zachary Carter, Corporation Counsel of the City of New York 100 Church Street New York, NY 100007 Tel.: 212-356-2536 James E. d'Auguste, J.

Plaintiff Schoolman Transportation System, Inc. d/b/a Classic Coach ("Schoolman Transportation") moves for summary judgment, and defendants The Board of Education of the City School District of the City of New York, City of New York, New York City Department of Education ("Department of Education" or "DOE") cross-move for summary judgment. The defendants' cross-motion for summary judgment is granted, dismissing the instant action, and plaintiff's motion for summary judgment is denied.

Schoolman Transportation entered into a written requirements contract with the Department of Education, entitled "Emergency Requirements Contract for the Transportation of School Age Children" (the "Contract"), which provides, in relevant part, the following:

This Emergency Agreement is a requirements contract for the supply of shuttle bus transportation services to and for schools and students who have been displaced or relocated due to the effects of Hurricane Sandy. . . . All decisions about whether to procure any services from the Contractor shall rest solely with the DOE.

Glotzer Aff., Ex. I at P-000063 (page 1 of the Contract). The Contract did not obligate the Department of Education to order any minimum number of buses, but permitted it to order up to a maximum of fourteen buses per day. The Department of Education could terminate the Contract upon providing Schoolman Transportation with five days prior written notice of termination. During the time period covered by the Contract, the Department of Education notified Schoolman Transportation that it would not be ordering any more buses and terminated the Contract orally, via a telephone voice message. After the instant dispute arose, the Department of Education paid Schoolman Transportation for the buses it ordered, with an additional payment for the buses it could have ordered during the five-day termination period.

Due to the defective notice of termination, Schoolman Transportation advances a contractually unsupported position that it is entitled to compensation for all buses the Department of Education might have ordered during the entire contract period. The contention that the Department of Education was required to order fourteen buses during the period that it did not need any buses is at odds with the plain language of the Contract. While the voice message was insufficient to provide written notice of termination, it is certainly sufficient to inform Schoolman Transportation that the Department of Education did not require any more of its buses. The risk in a requirements contract, such as the one at issue in this action, is placed solely on the seller, in this instance, Schoolman Transportation. See MDC Corp. v. John H. Harland Co., 228 F. Supp. 2d 387, 396 (S.D.NY 2002); Dienes Corp. v. Long Island R.R. Co., 2002 WL 603043, at *5 (E.D.NY Mar. 19, 2002) (citing HML Corp. v. Gen. Foods Corp., 365 F.2d 77, 81 (3d Cir. 1966) (applying New York law)). This finding is consistent with appellate authority relating to the Department of Education's business judgment, when entering into student transportation contracts, which places the risk of changing busing requirements on vendors. See L & M Bus Corp. v. New York City Dep't of Educ., 17 NY3d 149, 161 (2011) ("We decline to second-guess DOE's business judgment that the public interest and the aims of the bidding laws are served by a system that allocates the risks of the inevitable changes in the needs of the busing system over the length of the contracts to the vendors, rather than to DOE.").

Moreover, contrary to Schoolman Transportation's specious argument, the Department of Education's later payment for potential buses that could have been ordered during the five-day termination period does not operate to re-write the plain terms of the Contract. Cf. Latimi v. Metro. Transp. Auth., 17 Misc 3d 1115(A), 2007 NY Slip Op. 52011(U), at *1 (Civ. Ct., Kings County 2007); Watson v. Russell, 149 NY 388 (1896). The Court has also considered Schoolman Transportation's other arguments and finds them equally unavailing.

Accordingly, defendants' cross-motion is granted; plaintiff's motion is denied; and the instant action is dismissed with prejudice and without costs. This constitutes the decision and order of this Court. Dated: March 31, 2016 ____________________________ Hon. James E. d'Auguste, A.J.S.C.