[*1] Delfasco, LLC v Webb-Stiles Co. 2017 NY Slip Op 50244(U) Decided on February 24, 2017 Supreme Court, Kings County Rivera, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.
Decided on February 24, 2017
Supreme Court, Kings County
Delfasco, LLC, Plaintiff,
Webb-Stiles Company, Defendants.
Jonathan Rubinstein, Esq.
The Feinsilver Law Group, P.C.
26 Court Street, Suite 2305
Brooklyn, New Yok 11242
Attorney for Defendant
Mark F. Heinze, Esq.
Offek & Heinze, LLP
85 Main Street, Suite 204
Hackensack, NJ 07601
(201) 488-9900
Francois A. Rivera, J.
By notice of motion filed on September 7, 2016, under motion sequence number one, defendant/counterclaim plaintiff Webb-Stiles Company (hereinafter Webb-Stiles), moves for an order pursuant to CPLR 3212: (1) granting it a summary judgment dismissing the complaint; (2) granting summary judgment in its favor on the counterclaims; or, in the alternative; (3) pursuant to CPLR 3211 (a) (7) dismissing the second and third causes of action for unjust enrichment and [*2]for an accounting.
By notice of cross motion filed on October 28, 2016, under motion sequence two, plaintiff/counterclaim defendant Delfasco, LLC (hereinafter plaintiff or Delfasco), moves for an order: (1) pursuant to CPLR 3123 (b) allowing it to withdraw its admissions to a notice to admit; (2) pursuant to CPLR 3123 (a) granting it reasonable amount of time to respond to a notice to admit; (3) pursuant to CPLR 3103 (a) declaring that it was not required to respond to improper demands in the notice to admit.[FN1]
By order dated November 18, 2016, this Court granted the plaintiff's cross motion, gave plaintiff thirty days to respond to the notice to admit and reserved Webb-Stiles' motion.
On February 11, 2016, Delfasco commenced the instant action for, among other things, damages for breach of contract, by filing the summons and the verified complaint with the Kings County Clerk's Office. Webb-Stiles joined issue by filing a verified answer, affirmative defenses and counterclaims dated April 30, 2016. Delfasco interposed an answer to the counterclaims dated May 2, 2016.
The verified complaint contains nineteen allegations of fact in support of three causes of action. The first cause of action is for breach of contract. The second cause of action is for unjust enrichment. The third cause of action is for an accounting and a declaratory judgment.
In the complaint, Delfasco alleges the following salient facts. Webb-Stiles was retained to install a monorail system in Delfasco's facility. Delfasco paid for all equipment separately and the parties agreed that Webb-Stiles would bill Delfasco for labor on an hourly basis. The parties entered into a contract which governed the work to be completed.
Webb-Stiles performed work and Delfasco made an advance, refundable retainer payment in the amount of $49,856.00. Delfasco requested a breakdown of the labor costs. However, Webb-Stiles refused to furnish an accounting of the hours expended contending that the contract between the parties was one with a fixed price. Based on the aforementioned, Delfasco claims that Webb-Stiles breached the contract and seeks an accounting and reimbursement of the advancements they made.
The counterclaim contains twenty-four allegations of fact in support of three causes of action. The first cause of action is for breach of contract. The second cause of action is for an account stated. The third cause of action is for damages due to Delfasco's non-payment. The crux of Webb-Stiles complaint is that the contract provided for a fixed price and that Delfasco is in default by not paying the amounts due.
Webb-Stiles' motion papers consist of a memorandum of law, an affirmation of its counsel, an affidavit of Bobby Bellew (hereinafter Bellew) Webb-Stiles' Regional Sales Engineer and eleven annexed exhibits labeled A through K. Exhibit A is a copy of the summons and verified complaint. Exhibit B is the verified answer, affirmative defenses and counterclaims. Exhibit C is Delfasco's answer to the counterclaims. Exhibit D contains the notice to admit. Exhibit E is described as a proof of mailing and return receipt card for the notice to admit. Exhibit F is described as a purchase order. Exhibit G is described as an invoice. [*3]Exhibit H contains a copy of a check issued on August 28, 2015, by Delfasco to the order of the defendant. Exhibit I contains a copy of a check issued on May 27, 2015 to the order of defendant. Exhibit J contains the proposal for the work to be performed. Exhibit K contains a copy of an email allegedly sent to Delfasco by the defendant on August 18, 2014.
Delfasco's cross-motion papers consist of a memorandum of law in opposition to the motion for summary judgment and in support of the cross motion, an affirmation by its counsel and an affirmation by Jack Goldberg in support of three annexed exhibits labeled A, A and B. The first Exhibit A contains the defendants discovery demands. The second exhibit A contains a copy of an email allegedly sent by Bellew to Delfasco dated August 15, 2014. Exhibit B contains a copy of an email that Delfasco allegedly sent to defendant dated June 12, 2015.
LAW AND APPLICATION
Summary Judgment Standard
It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists (Alvarez v Prospect Hospital, 68 NY2d 320 [1986]). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of any material facts (Giuffrida v Citibank, 100 NY2d 72 [2003]).
A failure to make that showing requires the denial of that summary judgment motion, regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 NY2d 923 [1993]). If a prima facie showing has been made the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact (Alvarez v Prospect Hospital, 68 NY2d 320 at 324 [1986]).
A party opposing a motion for summary judgment is obligated "to lay bear his proofs" to sufficiently demonstrate, with admissible evidence, that a triable issue of fact will exist (Friends of Animals, Inc. v Associated for Manufacturers, Inc., 46 NY2d 1065 [1979]). A genuine issue of fact may not be demonstrated by using mere conclusions, expressions of hope or unsubstantiated allegations or assertions (Amatulli v Delhi Constr. Corp., 77 NY2d 525 [1991]).
"Pursuant to CPLR 3212 (b) a court will grant a motion for summary judgment upon a determination that the movant's papers justify holding, as a matter of law, "that there is no defense to the cause of action or that the cause of action or defense has no merit." Further, all of the evidence must be viewed in the light most favorable to the opponent of the motion (People ex rel. Spitzer v Grasso, 50 AD3d 535, 544 [1st Dept 2008]; citing Marine Midland Bank v Dino & Artie's Automatic Transmission Co., 168 AD2d 610 [2nd Dept 1990]). The movant's burden is to establish that there are no triable issues of fact as to each cause of action.
Defendant's Motion for Summary Judgment Dismissing the Plaintiff's Complaint
The complaint contains three causes of action for breach of contract, unjust enrichment and for an accounting. Accordingly, the defendant must establish that there are no genuine issues of material facts and that it is entitled to summary judgment for each cause of action separately.
Breach of Contract
In order to meet the prima facie burden to recover damages for breach of contract on the counterclaim, the defendants need to establish in its motion and supporting papers the existence of a contract, defendant's performance pursuant to the contract, the plaintiff's breach of their contractual obligations, and damages defendant has sustained as a result of that breach (Dee v Rakower, 112 AD3d 204, 208-209 [2nd Dept 2013]). "In determining whether the parties entered [*4]into a contractual agreement and what were its terms, it is necessary to look, rather, to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds" (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397, 399 [1977]). "Generally, courts look to the basic elements of the offer and the acceptance to determine whether there is an objective meeting of the minds" (Matter of Express Indus. & Term. Corp. v New York State Dept. of Transp., 93 NY2d 584, 589 [1999]).
In the instant action Webb-Stiles submits an affidavit of Bellew and the proposal in support of the motion. Bellew asserts that on January 31, 2014, he generated a proposal for Delfasco, which quoted a fixed price for the job of $193,601.00 broken down between $57,936.00 for equipment and $135, 665.00 for labor and services to tear out the existing system and installation of a new one. He also alleges that the annexed proposal is also the contract and bound the parties to its terms.[FN2] Webb-Stiles then delivered the equipment and was waiting for the approval to begin the installation. On or about August 18, 2014, Bellew and a representative from Delfasco engaged in price negotiations regarding the labor costs.
The proposal is a twenty-four page document that includes illustrations of the system to be installed. The contract also contains the following salient language: after plaintiff's acceptance, the "proposal alone will define the agreement between the parties, and there are and will be no understandings, representations, or agreements between the parties outside the terms of [the] written proposal".
The proposal contains the price of the equipment and labor and a provision that the terms of the proposal cannot be altered by the parties. However, Bellew's affidavit states that the parties did agree to alter the terms of the contract. Bellew's own affidavit contradict the contract and raises an issue of fact as to the terms agreed upon. Thus, Webb-Stiles' branch for judgment as a matter of law dismissing Delfasco's first cause of action on breach of contract is denied. "Since the defendant failed to meet its initial burden, it is not necessary to consider the sufficiency of the papers submitted in opposition" (Tingling v C.I.N.H.R., Inc., 120 AD3d 570, 571 [2nd Dept 2014]).
The second cause of action in the complaint is for unjust enrichment. Plaintiff asserts that the Webb-Stiles would be unjustly enriched by retaining the sums advanced by Delfasco.
Unjust enrichment is a "quasi-contract theory of recovery, and is an obligation imposed by equity to prevent injustice, in the absence of an actual agreement between the parties concerned" (Georgia Malone & Co., Inc. v Ralph Rieder, 86 AD3d 406 [1st Dept 2011] citing IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 142 [2009]). The elements of unjust enrichment are "that (1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered" (Mandarin v Wildenstein, 16 NY3d 173 [2011] citing Citibank, N.A. v Walker, 12 AD3d 480, 481 [2nd Dept 2004]). "The essential inquiry in any action for unjust enrichment . is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered" (Mandarin v Wildenstein, 16 NY3d 173 [2011] citing Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415, 421 [1972]).
An unjust enrichment claim cannot be maintained while simultaneously alleging the [*5]existence of an express contract covering the same subject matter (Universal/MMEC, Ltd. v Dormitory Auth. of State of NY, 50 AD3d 352 [1st Dept 2008]). Therefore, "[a] cause of action predicated on a theory of implied contract or quasi-contract is not viable where there is an express agreement that governs the subject matter underlying the action" (Gym Door Repairs, Inc. v Astoria General Contracting Corp., 2016 WL 6991737, 2 quoting Scott v Fields, 92 AD3d 666, 669 [2nd Dept 2012]).
In the instant action, there is no dispute that the parties entered into a written contract. As discussed above, there are genuine issues of material fact regarding the payment terms of the contract. Even though all of the terms are not established a contractual relationship exists between the parties and the law does not permit a party to claim breach of contract and simultaneously request the equitable relief of unjust enrichment covering the same subject matter. Therefore, that branch of the defendant's motion for summary judgment is granted and Delfasco's second cause of action for unjust enrichment is hereby dismissed.
Right to an Accounting
The complaint alleges that the contract was for work to be performed on an hourly basis and that the defendant is required to produce an accounting of the time expended on the project "The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest" (Dee, 113 AD3d at 214 quoting Palazzo v Palazzo, 121 AD2d 261, 265 [1st Dept 1986]). "A fiduciary relationship arises when one is 'under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation" (Id. quoting Roni LLC v Arfa, 18 NY3d 846, 848 [2011]). "It is 'grounded in a higher level of trust than normally present in the marketplace between those involved in arm's length business transactions' " (DiTolla, 100 AD3d at 587 quoting EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]).
Rather, a plaintiff must make a "showing of 'special circumstances' that could have transformed the parties business relationship to a fiduciary one, such as, control by one party of the other for the good of the other" (DiTolla, 100 AD3d at 587 quoting L. Magarian & Co. v Timberland Co., 245 AD2d 69, 70 [1st Dept 1997]). Moreover, a fiduciary relationship can be "found to exist, in appropriate circumstances, between close friends or even where a confidence is based upon prior business dealings" (Lawrence v Kennedy, 95 AD3d 955, 958 [2nd Dept 2012]). Finally, a fiduciary can also be created when a person entrusts another some property with respect the latter party is bound to reveal her dealings (Dee, 113 AD3d at 214 quoting Stevens v St. Joseph's Hosp., 52 AD2d 722, 722-723 [4th Dept 1976]). As a result, it has been stated that "[a] conventional business relationship, without more, is insufficient to create a fiduciary relationship" (DiTolla v Doral Dental IPA of New York, LLC, 100 AD3d 586, 587 [2nd Dept 2012]).
In support of this branch of the motion the defendant submitted the affidavit of Bellew and the proposal. The defendant has met its prima facie burden to established that the parties' relationship is not one that would rise to create a fiduciary relationship.
Once a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact (Alvarez v Prospect Hospital, 68 NY2d 320 [1986]). In opposition to this branch of the motion Delfasco has submitted the affirmation of H. Jonathan Rubinstein, Esq., its counsel and of Jack Goldenberg, the managing member of Delfasco. H. Jonathan Rubinstein, Esq.'s affirmation is [*6]limited to the issue of the notice to admit and is, therefore, of no probative value regarding the summary judgment motion. Jack Goldenberg does not assert any allegation of fact that would raise a triable issue of fact as to the relationship between the parties. Accordingly, the plaintiff has failed to raise a triable issue of fact. Accordingly, that branch of the defendant's motion for summary judgment is granted and Delfasco's second cause of action is dismissed.
The Court is cognizant that even though the cause of action seeks an accounting the plaintiff may merely be seeking an itemization of the hours that the defendant spent on the project. An itemization does not require a confidential or fiduciary relationship and is appropriate in situations such as the instant matter. The crux of the dispute between the parties is the labor costs that the defendant claims it is owed. Therefore, the defendant will be required to establish its entitlement to the amount it claims that Delfasco owes at trial.
Summary judgment granting defendant's counterclaims
Webb-Stiles also seeks an order granting it summary judgment on the counterclaims. The counterclaims asserted are for breach of contract, account stated, and a cause of action labeled "damages due to non-payment". Each counterclaim will be addressed separately.
Breach of Contract
As previously discussed Webb-Stiles failed to meet its prima facie burden to dismiss the breach of contract cause of action. A triable issue of fact exists regarding the terms of payment of the contract between the parties in the present action. Thus, that branch of Webb-Stiles's motion for summary judgment is likewise denied.
Webb-Stiles alleges that it is entitled to an account stated because it sent bills to Delfasco and the bills were retained without protest and made partial payment. "An account stated is an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and balance due" (Environmental Appraisers & Builders, LLC v Imhof, 143 AD3d 756, 758 [2nd Dept 2016] quoting Fleetwood Agency, Inc. v Verde elec. Corp., 85 AD3d 850, 851 [2nd Dept 2011]). This cause of action has been described as "an alternative theory of liability to recover the same damages allegedly sustained as a result of the breach of contract" (A. Montilli Plumbing & Heating Corp. v Valentino, 90 AD3d 961, 962 [2011]). "An agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account" (Environmental Appraisers & Builders, LLC, 143 AD3d at 758-59 quoting American Express Centurion Bank v Cutler, 81 AD3d 761, 762 [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 Servs., Inc. v POM Recoveries, Inc., 138 AD3d 917, 919 [2nd Dept 2016], quoting Raytone Plumbing Specialities, Inc. v Sano Constr. Corp., 92 AD3d 855, 856 [2nd Dept 2012]).
In support of this branch of the motion Webb-Stiles relies upon the affidavit of Bellew and the attached e-mail exhibits. Bellew asserts that after submitting the proposal he and employees of Delfasco discussed several price adjustments to the proposal. Those price adjustments were not reflected on the contract. Delfasco issued a purchase order which was the acceptance of the terms and necessary to begin the project. The purchase order contained a notation that "adjustments to be made as agreed". Bellew understood this notation to refer to conversations that he had with Delfasco regarding adjustments to the price and scope of the work. Once the purchase order was issued Webb-Stiles began the project. Bellew further states [*7]that during the course of the project additional parts were ordered. After the work had been completed Webb-Stiles sent Delfasco an invoice which totaled $99,288.00. Thereafter Delfasco made two separate payments to Webb-Stiles.
Accordingly, Bellew's affidavit establishes that there was not an agreement between the parties with respect to the amount due. An agreement may be implied when invoices are retained without objecting to them for a reasonable time (Clean Earth of New Jersey, Inc. v Northcoast Maintenance Corp., 142 AD3d 1032 [2nd Dept 2016]) However, when it is clear that there was a dispute as to the amount due then Webb-Stiles cannot circumvent that dispute by pointing to retained invoices.
Accordingly, Webb-Stiles has failed to meet its prima facie burden to establish its entitlement to an account stated. Since Webb-Stiles failed to meet its initial burden, it is not necessary to consider the sufficiency of the papers submitted in opposition (Tingling v C.I.N.H.R. Inc, 120 AD3d 570 [2nd Dept 2014]).
Accordingly, Webb-Stiles's branch of the motion for summary judgment on its second cause of action is denied.
Damages for non-payment
The third cause of action claims non-payment under the contract. This is a breach of contract claim that is duplicative to the first cause of action claimed by Webb-Stiles. As discussed previously, the defendants failed to meet the prima facie burden on its breach of contract claim. Thus, that branch of Webb-Stiles' motion for summary judgment is denied.
The Court will not analyze whether the cause of action of non-payment should be dismissed as duplicative with the breach of contract claim by Webb-Stiles because Delfasco has not requested such relief.
Defendant's Motion to Dismiss the Plaintiffs Cause of Action Pursuant to CPLR 3211 (a) (7)
As an alternative to summary judgement Webb-Stiles moves for an order dismissing Delfasco's complaint pursuant to CPLR 3211 (a) (7). The only remaining cause of action is for breach of contract.
On a motion to dismiss the complaint pursuant to CPLR 3211(a) (7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory (Sinagra v City of New York, 127 AD3d 729, 730 [2nd Dept 2015] citing Breytman v Olinville Realty, LLC, 54 AD3d 703, 703-704 [2nd Dept 2008]). A motion to dismiss pursuant to CPLR 3211 (a) (7) will fail if, taking all facts alleged as true and according them every possible inference favorable to the plaintiff, the complaint states in some recognizable form any cause of action known to our law (Ader v Guzman, 135 AD3d 668, 669 [2nd Dept 2016] citing Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38 [2nd Dept 2006]). Finally, "unless it has been shown that a material fact as claimed by the [plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it dismissal should not eventuate" (Gym Door Repairs, Inc. v Astoria General Contracting Corp., 2016 WL 6991737, 2).
In the instant action, the verified complaint contains all of the elements of a breach of contract claim. Accepting all facts of the complaint as true and according the plaintiff any possible beneficial inference, this Court finds that the breach of contract claim cannot be dismissed on the grounds of failure to state a cause of action. Accordingly, Webb-Stiles' motion [*8]to dismiss is denied.
Webb-Stiles's motion pursuant to CPLR 3212 for a summary judgment dismissing the complaint in its entirety is granted to the extent of dismissing Delfasco's cause of action for unjust enrichment and an accounting.
Webb-Stiles's motion pursuant to CPLR 3212 for summary judgment granting judgment in its favor on the counterclaims is denied.
Webb-Stiles's motion pursuant to CPLR 3211(a) (7) to dismiss Delfasco's first cause of action for breach of contract is denied.
The foregoing constitutes the decision and order of this Court.
Dated: February 24, 2017
Hon. Francois A. Rivera
Footnote 1: The cross motion also serves as opposition to the defendant's motion for summary judgment.
Footnote 2: There is no dispute that the proposal governed the scope of the work.
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