Case LLC, Plaintiff,v.PACE ELEVATOR

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1.NATURE OF THE CASE

2.CONCISE RULE OF LAW

3.FACTS

4.ISSUE

5.HOLDING

6.RATIONALE

7.DISPOSITION

Case file

1 In this breach of contract action, plaintiff Renaissance Equity Holdings, LLC (Renaissance) moves for an order: (1) pursuant to CPLR 3212, for summary judgment against defendant Pace Elevator, Inc. (Pace), in favor of Renaissance on its complaint, dismissing Pace's affirmative defenses and counterclaims, and awarding damages to Renaissance in the amount of $241,864.00; (2) pursuant to CPLR 3205(b), granting plaintiff leave to amend its complaint to add a claim for the recovery of legal costs and expenses in this action; and (c) awarding attorneys' fees as part of the summary judgment award.

For the following reasons, plaintiff's motion is granted.

On June 22, 2004, Pace entered into a construction agreement with Gateway Sherman, Inc. (Gateway) for the renovation of 15 elevator cabs at Vanderveer Estates (Vanderveer) in Brooklyn, New York, which property was then owned by Gateway (Renovation Contract). Paragraph 6 of the Renovation Contract, states:

In the event Contractor does not enter into an elevator service maintenance agreement with Owner, then Contractor shall not be liable for any damage caused by any third party service provider following completion of work, nor shall Contractor be liable for any damage caused by Owner's failure to enter into an elevator service maintenance agreement.

Paragraph 14 (c) provides, in relevant part:

Should owner incur any expense, including court costs and attorneys' fees, in successfully protecting or fulfilling its rights hereunder, such expenses shall be reimbursed by Contractor promptly upon demand.

In addition, the Renovation Contract, at paragraph 32(c)(i), provides:

This Agreement represents the entire and integrated agreement between Owner and Contractor and supersedes all prior negotiations, representations or agreements, either written or oral. No provisions of this Agreement shall be changed or modified, nor shall this Agreement be discharged, in whole or in part, except by an agreement in writing signed by the party against whom the change, modification or discharge is claimed or sought to be enforced.

On November 30, 2004, Gateway and Pace entered into an elevator maintenance agreement for the maintenance and repair of 59 elevators located at Vanderveer (Maintenance Contract). The Maintenance Contract specified that it was separate from the Renovation Contract. Specifically, the Maintenance Contract states:

WHEREAS, OWNER desires to engage CONTRACTOR to perform certain additional elevator maintenance service for the elevators, separate from the Construction Agreement, and CONTRACTOR desires to provide those services (emphasis added).

Further, paragraph 22 of the Maintenance Contract contains a merger and integration clause, which provides:

This agreement constitutes the entire understanding between the parties, supersedes any and all prior agreements or understandings regarding the matters addressed herein and may not be modified except by a written agreement signed by the parties.

*2 By letter dated April 6, 2005, Gateway notified Pace that the total number of elevators covered by the Maintenance Contract was to be reduced from 59 to 24.

In July 2005, Gateway and Pace entered into an Addendum to the Construction Agreement for Construction Project of Limited Scope between Gateway and Pace (the Addendum). The purpose of the Addendum was to decrease the scope of the work to be performed under the Renovation Contract by reducing the number of cabs to be renovated from 15 to 10. As noted therein, the remainder of the Renovation Contract was to remain in full force and effect.

Thereafter, on October 7, 2005, Renaissance acquired the Vanderveer Estates. In connection with the acquisition, Gateway assigned the Maintenance Contract and Renovation Contract to Renaissance. Pace does not dispute receiving notice of the assignment.

By written notice, dated November 9, 2005, Renaissance informed Pace that the Maintenance Contract would be terminated on December 15, 2005. The termination was in accordance with paragraph 14.3 of the Maintenance Contract, which provides:

Notwithstanding any provision of this Agreement to the contrary, [Renaissance] shall have the right to terminate this Agreement with or without cause upon not less than thirty (30) days prior written notice to [Pace] of its election to do so.

Renaissance contends that it made the decision to terminate the Maintenance Contract because of Pace's deficient maintenance of the elevators.

In response, Pace informed Renaissance that Pace would not renovate the remaining seven elevator cabs to be renovated under the Renovation Contract unless the Maintenance Contract continued in force. Pace claims that the consideration for the modified Renovation Contract was the continuation of the Maintenance Contract. Renaissance asserts that there is nothing in either of the contracts that supports Pace's claim. Rather, the express language of the Maintenance Contract provides that it is separate from the Renovation Contract.

On November 28, 2005, Renaissance commenced this lawsuit asserting the following causes of action: (1) breach of contract; (2) specific performance; and (3) declaratory judgment ( see Complaint dated November 28, 2005 [the Complaint] ). According to the Affidavit of Jacob Schwimmer, member and officer of Renaissance, dated February 7, 2007, Renaissance no longer seeks specific performance relief, since another elevator company was retained as permitted under the Renovation Contract, due to the alleged default by Pace.

In its answer, dated January 23, 2006, Pace asserts several affirmative defenses as well as counterclaims for breach of contract and attorneys' fees.

In order to grant summary judgment, there must be no material or triable issues of fact presented. It is well established that [t]he proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact ( Wolff v. New York City Trans. Auth., 21 AD3d 956 [2d Dept 2005], quoting Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985] ). The party opposing the motion must then come forward with sufficient evidence to create an issue of fact for the consideration of the jury ( Pinto v. Pinto, 308 A.D.2d 571 [2d Dept 2003], citing Alvarez v. Prospect Hosp., 68 N.Y.2d 320 [1986]; Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ).

*3 Renaissance asserts that Pace breached the Renovation Contract by refusing to renovate seven elevator cabs for which Renaissance had already paid and advanced money for. Pace argues that once Renaissance terminated the Maintenance Contract, Pace was no longer obliged to perform under the terms of the Renovation Contract.

Where ... the intent of the parties can be determined from the face of the agreement, interpretation is a matter of law and the case is ripe for summary judgment ( CIT Group/Credit Finance, Inc. v Weinstein, 261 A.D.2d 203, 204 [1st Dept 1999], quoting American Exp. Bank Ltd. v. Uniroyal, Inc., 164 A.D.2d 275, 277 [1st Dept 1990], lv denied 77 N.Y.2d 807 [1991]; see also V.C. Vitanza Sons, Inc. v. New York City Hous. Auth., 7 AD3d 398 [1st Dept 2004] ). On the other hand, if it is necessary to refer to extrinsic facts, which may be in conflict, to determine the intent of the parties, there is a question of fact, and summary judgment should be denied ( American Exp. Bank Ltd., 164 A.D.2d at 277, citing IBM Credit Fin. Corp. v. Mazda Motor Mfg. [USA] Corp., 152 A.D.2d 451 [1st Dept 1989]; Leighton's, Inc. v. Century Circuit, 95 A.D.2d 681 [1st Dept 1983] [other citation omitted]; see also JRK Franklin, LLC v. 164 East 87th Street LLC, 13 Misc.3d 1239(A), 2006 N.Y. Slip Op 52170(U) [Sup Ct, N.Y. County 2006] ).

In its opposition, Pace points to correspondence documenting the negotiation between it and Gateway leading up to the contract entered into between those parties, as well as subsequent to the agreement. However, where, as here, there is clear and unambiguous language with respect to the terms and conditions of the contract, then the court must preclude parol evidence ( see W.W.W. Assocs., Inc. v. Grancontiere, 77 N.Y.2d 157, 163 [1990] [It is well settled that extrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face] [internal quotation marks and citation omitted]; see also Grant Entertainment, Inc. v. Lee, 186 A.D.2d 66 [1st Dept 1992]; Sucrest Corp. v. United Brands Co., 57 A.D.2d 751, 752 [1st Dept 1977] [Parol evidence may not be used to interpret the agreement and letter. Effect must be given to intent only as indicated by the language of the agreement and letter themselves] ).

Moreover, both agreements contain merger and integration clauses. Where a written contract contains a merger cause, negotiated at arm's length, inserted by sophisticated parties and stating that the written agreement constitutes the entire agreement of the parties, the parol evidence rule applies ( Oppman v. IRMC Holdings, Inc., 14 Misc.3d 1219(A), 2007 N.Y. Slip Op 50093(U) [Sup Ct, New York County 2007], citing Benjamin Goldstein Prods., Ltd. v. Fish, 198 A.D.2d 137 [1st Dept 1993]; see also Cornhusker Farms, Inc. v. Hunts Point Coop. Market, Inc., 2 AD3d 201, 203204 [1st Dept 2003] [holding that merger clause and no-oral modification clause in agreement barred the plaintiff's claim based on alleged agreement not referenced in agreement or signed written amendments] ).

*4 It is clear that based on the language of the Maintenance Contract, Renaissance could have terminated the contract with or without cause as long as it provided Pace with the requisite notice. Pace's refusal to follow through with the Renovation Contract based on Renaissance's termination of the Maintenance Contract, is in breach of the Renovation Contract. Nowhere in either of the Maintenance Contract or the Renovation Contract is there any indication that the two agreements are tied together. Rather, the Elevator Renovation Contract itself provides that there was no requirement that Pace enter into the Elevator Maintenance Contract ( see Elevator Renovation Contract, Paragraph 6).

In light of the unambiguous language of the contract provision, Renaissance is entitled to summary judgment on its breach of contract claim ( see W.W.W. Assocs., Inc., 77 N.Y.2d 157, supra; Cellular Telephone Co. v. 210 East 86th Street Corp., 44 AD3d 77, 81 [1st Dept 2007]; Weintraub v. Grey Direct, Inc., 39 AD3d 400 [1st Dept 2007] [holding [s]ummary judgment was properly granted based upon the clear and unambiguous agreement pursuant to which plaintiff was employed by defendant] ).

Moreover, Pace's affirmative defenses are insufficient to defeat summary judgment.It is basic that bare legal conclusions are insufficient to raise an affirmative defense (CPLR 3013, 3018[b]; Robbins v. Growney, 229 A.D.2d 356 [1st Dept 1996] ). In any event, the first affirmative defense that the complaint fails to state a cause of action lacks merit in light of plaintiff's demonstration of entitlement to summary judgment. The second affirmative defense for lack of privity is inapplicable as there is no dispute that Renaissance is an assignee of Gateway, the party with whom Pace previously contracted. The third defense of unclean hands is also inapplicable, as such a defense only applies in actions where the plaintiff is seeking equitable relief ( see Ross v. Moyer, 286 A.D.2d 610 [1st Dept 2001] ). Pace's bald and conclusory allegation of unjust enrichment is similarly inapplicable as Renaissance is the party which had advanced monies to Pace for services Pace refused to complete.

Pace's fifth affirmative defense of culpable conduct is misplaced, as the concept of apportioning culpable conduct is one generally related to tort. Since all of the causes of action in this case are based on breach of contract, there is no affirmative defense available based on notions of culpable conduct ( see CPLR 1401; Pilweski v. Solymosy, 266 A.D.2d 83 [1st Dept 1999] ).

With respect to the sixth affirmative defense, [w]here, as here, the valid assignment of a claim is absolute on its face and the assignor is divested of all control and right to the cause of action, the assignee [Renaissance] is the proper party in interest and has the right to commence and prosecute an action in its own name without joining the assignor as a necessary party ( Cardtronics, LP v. St. Nicolas Beverage Discount Ctr., Inc., 8 AD3d 419, 420 [2d Dept 2004] [citations omitted] ).

*5 The seventh affirmative defense for failure to mitigate is not applicable to the present case as the damages sought are for those monies Renaissance advanced to Pace for work it refused to complete.

Based on the foregoing, Renaissance's motion for summary judgment is granted and Pace's cross claims and affirmative defenses are dismissed. In addition, damages are awarded to Renaissance in the amount of $241,864.00, as Pace does not dispute the sum of money owed to Renaissance under the Renovation Contract.

Renaissance moves for leave to amend the complaint to add a claim for recovery of legal fees and expenses as provided for under the Elevator Renovation Contract. At oral argument, the parties represented that there was no objection to the amendment. As such, Renaissance's motion on this ground is granted.

With respect to the legal fees, as I indicated at oral argument, the matter is respectfully referred to a referee.

Accordingly, it is

ORDERED that plaintiff Renaissance Equity Holdings LLC's motion for summary judgment is granted; and it is further

ORDERED that plaintiff is entitled to recover damages from defendant with respect to the Renovation Contract in the sum of $241,864.00, plus interest thereon from November 28, 2005 to the date of entry of judgment; and it is further

ORDERED that plaintiff's motion for leave to amend the complaint to add a claim for recovery of legal fees and expenses as provided for under the Renovation Contract is granted; and it is further

ORDERED that the issue of the amount to which plaintiff is entitled as the costs and attorneys' fees from defendant in the action is referred to a Special Referee to hear and report with recommendations, except that, in the event of and upon the filing of a stipulation for the parties, as permitted by CPLR 4317, the Special Referee, or another person designated by the parties to serve as referee, shall determine the aforesaid issue; and it is further

ORDERED that entry of judgment is held in abeyance pending receipt of the report and recommendations of the Special Referee or the designated referee; and it is further

ORDERED that a copy of this order with notice of entry shall be served on the Clerk of the Judicial Support Office (Room 311) to arrange a date for the reference to a Special Referee.

N.Y.Sup.,2007. Renaissance Equity Holdings, LLC v. Pace Elevator, Inc. 17 Misc.3d 1137(A), 851 N.Y.S.2d 73 (Table), 2007 WL 4294735 (N.Y.Sup.), 2007 N.Y. Slip Op. 52321(U) Unreported Disposition