Opinion
012325/07.
Decided May 26, 2011.
Joseph Sferrazza Esq, Sferrazza Keenan PLLC, Melville NY.
Leland Stuart Beck Esq, Beck Strauss, PLLC, Uniondale NY.
NATURE OF THE ACTION
Plaintiffs commenced this breach of contract action by Summons and Complaint filed April 23, 2007. Plaintiffs sought return of their down payment paid to Defendant. Defendant filed an Answer denying the allegations. Defendant's Answer did not contain any counterclaim or affirmative defenses, but at trial sought a claim for quantum meruit. Pursuant to Civ. Pract. Law Rules § 325(d), the action was transferred to this Court for trial. A one day trial was conducted without jury.
FACTS
Plaintiffs met John, the owner of Original Design, at a Home Expo on a Saturday in October 2006. Plaintiffs were interested in kitchen and bathroom remodeling. A few days later, at their home, Plaintiffs further consulted with John. Plaintiffs stated that after a 2 ½ hour meeting, John went to his truck then returned shortly with a proposed contract. The parties entered into the written agreement. Plaintiffs paid Defendant $18,000.00 as a deposit towards the full balance of $36,000.00. The work was scheduled to begin one week later.
The contract provided that "the buyer may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction." The contract was dated October 16, 2006. It further provided that "seller is required by law to deposit all monies received for [the buyer] under the contract prior to the completion of the work contract with you guaranteeing the return or proper application of such monies." The contract indicated that the work was to begin about October 22, 2006. Plaintiffs' $18,000.00 deposit check was dated October 16, 2006, and deposited by Defendant on October 17, 2006.
Plaintiffs claimed they cancelled the contract by telephoning the Defendant at 8:00AM on October 20, 2006. Before cancelling, the Plaintiffs reviewed the contract and examined the fixtures they were to order at the local stores. After so doing, Plaintiffs believed that the items set forth in Defendant's contract did not meet their standards. After the telephone call, they met John to discuss their concerns. Plaintiffs offered to pay John $500.00 for his time, but demanded return of the deposit. John refused to return the deposit and said "we will work with you." John departed with a promise to provide Plaintiffs with more numbers. A few days later, on the day work was to begin, Plaintiffs claimed they again called Defendant to stop any work. They had not yet heard back from John.
John denied that a written contract was provided at the first meeting. The contract was prepared for a subsequent meeting. He also denied that Plaintiffs ever demanded return of their deposit. He did acknowledge that he and his crew were en route to Plaintiffs' home on October 23, 2006, when he received a call from Plaintiffs informing him that they did not want to do the work. He stated that because Plaintiffs did not cancel the contract within the 3-day recision period, the contract was binding. John claimed to have invested several hours of layout work before he got the call to stop. He kept the money because "he worked very hard for a long time to make the job happen." He claimed he worked with the Plaintiffs for several weeks modifying the plans and suggesting alternate remodeling ideas. Defendant introduced a copy of a modified contract which was not signed by either party. However, he did not submit any paperwork reflecting the hours he worked, nor did he submit any remodeling plans, either original or modified. The diagrams introduced into evidence were prepared by the various cabinet stores, at Plaintiffs' request. The only document reflecting Defendant's measurements was a sketch of the original measurements.
Another of Defendant's workers, Joseph, testified that he was with John on October 16, 2006, when the contract was signed. He denied ever receiving a call on October 20, cancelling the work. He claimed to have hired an additional person to assist him with demolition the day they were en route and received Plaintiffs' call. Joseph also had no documentation of the number of hours he spent on the job, nor any receipts or payroll records.
It is undisputed that the remodeling work never started, nor were any materials purchased by either the Plaintiffs or Defendant. Through November 2006, the parties attempted further negotiations of the job, but did not arrive at an agreement.
ANALYSIS
In a matter such as this, it is the province and indeed the obligation of the trial court to assess and determine matters of credibility. Morgan v McCaffrey , 14 AD3d 670 , 789 N.Y.S.2d 274 (2d Dep't 2005); Matter of Liccione v Michael A., 65 NY2d 826, 493 N.Y.S.2d 121 (1985). Here, the burden is upon the plaintiff to plead and prove its direct case by a fair preponderance of the credible, relevant and material evidence with the same burden imposed upon the Third-party Plaintiff respecting his claim against the Third-party Defendant. Prince-Richardson on Evidence, § 3-210; Torem v Central Avenue Rest, 133 AD2d 25, 518 N.Y.S.2d 620 (1st Dep't 1987).
The elements of a cause of action for breach of contract are: (1) formation of a contract between the parties; (2) performance by plaintiff; (3) defendant's failure to perform; and (4) resulting damage. Furia v. Furia, 166 AD2d 694 (2nd Dept. 1990). A contract is formed when there are at least two parties with legal capacity to enter into an contract give their mutual assent to the terms of a contract and there is consideration. 2 PJI 3d 4:1 at 626 (2010); see: Maas v. Cornell University, 94 NY2d 87, 93 (1999). Mutual assent is often referred to as "a meeting of the minds" on the essential terms of the contract. Express Industries and Terminal Corp. v. New York State Department of Transportation, 93 NY2d 584 (1999).Where, however, the contract language used to express a material term is ambiguous, so that one party means one thing and another party understands it another way, there is no meeting of the minds and consequently no contract. Computer Associates Inter., Inc. v. U.S. Balloon Mfg. Co., Inc. , 10 AD3d 699 (2nd Dep't 2004). Even if parties intend to be bound by a contract, it is unenforceable if there is no meeting of the minds, i.e. if the parties understand the contract's material terms differently. Gessin Elec. Contractors, Inc. v. 95 Wall Associates, LLC , 74 AD3d 516 (1st Dep't 2010).
Plaintiffs failed to establish Defendant's breach of contract, but demonstrated their own breach. There is no dispute that a contract was entered into by the parties on October 16, 2006. The requisite element that Defendant failed to perform could not be established after Plaintiffs testified that they cancelled the contract before Defendant began any work. That contract permitted Plaintiffs to cancel the contract by 11:59 on October 19, 2006. Plaintiffs allegedly telephoned the Defendant at 8AM on October 20, 2006 to cancel the contract. Had the Plaintiffs submitted proof of that telephone call by providing a telephone record, this Court could have considered the passage of time from midnight until 8:00AM the next morning to be de minimis. The Defendant denied receiving an October 20, 2006, call from the Plaintiffs, and stated that the first time he heard about a cancellation was on October 23, 2006, while en route to the Plaintiffs' home. The Plaintiffs' testimony about an October 20th telephone call was unsubstantiated, and the Court did not find the Plaintiffs credible on this issue.
The Court must now address Defendant's request to keep the deposit as quantum meruit. A party may assert a claim for equitable recoupment even though a timely counterclaim has not or cannot be filed (see 84 NY Jur 2d, Pleading § 159; Town of Amherst v County of Erie, 247 AD2d 869, 668 NYS2d 848 [4th Dept 1998]; Bendat v. Premier Broadcast Group, 175 AD2d 536, 572 N.Y.S.2d 796 [3d Dept 1991]; Carlon v Regan, 98 AD2d 544, 471 NYS2d 896 [3d Dept 1984], affd as mod, 63 NY2d 1011, 484 NYS2d 506). The elements of a claim for quantum meruit are: [1] the performance of services in good faith; [2] the acceptance of services by the person to whom they are rendered; [3] an expectation of compensation and [4] the reasonable value of the services. Miranco Contracting Corp. v. Perel. 57 AD3d 956 (2nd Dept. 2008). However, a party will not be found liable if the court can find no intent to pay for the services actually rendered. 22A NY Jur2d Contracts § 610. The mere acceptance of services without more has been held insufficient to support a claim for quantum meruit. 22A NY Jur2d Contracts § 610.
The original contract did not contain any form of compensation to Defendant for planning work it may have prepared. The parties continued to negotiate a new agreement for the remodeling. But, without a meeting of the minds, no new contract was created. Thus, there was no proof that Plaintiffs intended to compensate Defendant for any of its negotiating and planning. Even if the Defendant could establish Plaintiffs' intent to pay for its planning time, Defendant's claim for quantum meruit must still fail. Although there was a performance in good faith by Defendant to modify the plans, the Defendant failed to establish a reasonable value for its services. No evidence was submitted to the Court to establish hours worked, monies laid out, or anything else upon which quantum meruit could be awarded.
Although the Defendant did not file any counterclaim or affirmative defense, the Court exercised its discretion and entertained Defendant's quantum meruit argument made at trial. But the Court cannot fabricate evidence for any party, and cannot "pick a number form the air" without some scintilla of substantiation. By reason of the failure of Defendant to establish a fair value for any of its services, the deposit must be returned from the Defendant's segregated account to the Plaintiffs. However, due to Plaintiffs' breach of the original agreement, interest is awarded from the date of this decision.
By reason of the above, it is hereby
ADJUDGED that Plaintiffs failed to establish that defendant breached the agreement dated October 16, 2006; and it is further
ADJUDGED that Defendant failed to establish a claim for quantum meruit; and it is further
ORDERED that Defendant ORIGINAL DESIGN CONSTRUCTION CORP, shall immediately return the deposit amount of EIGHTEEN THOUSAND DOLLARS ($18,000.00) to Plaintiffs within twenty (20) days of the date of this Decision and Order.
This constitutes the decision and order of the Court
Submit Judgment.