Allied Sheet Metal Works, Inc. v. Kerby Saunders, Inc.

206 A.D.2d 166, 619 N.Y.S.2d 260, 1994 N.Y. App. Div. LEXIS 11782
CourtAppellate Division of the Supreme Court of the State of New York
DecidedNovember 29, 1994
StatusPublished
Cited by33 cases

This text of 206 A.D.2d 166 (Allied Sheet Metal Works, Inc. v. Kerby Saunders, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allied Sheet Metal Works, Inc. v. Kerby Saunders, Inc., 206 A.D.2d 166, 619 N.Y.S.2d 260, 1994 N.Y. App. Div. LEXIS 11782 (N.Y. Ct. App. 1994).

Opinion

OPINION OF THE COURT

Rubin, J.

At issue in this case is whether plaintiff Allied Sheet Metal Works, Inc. and defendant Kerby Saunders, Inc. reached a meeting of the minds upon all the essential elements of an agreement so as to constitute an enforceable contract. In opposition to defendants’ motion for summary judgment dismissing the complaint, plaintiff asserts that the parties reached an agreement wherein plaintiff was to provide sheet metal fabrication and installation for the heating, ventilation and air-conditioning system of a building at Mount Sinai [168]*168Hospital. Allied relies upon a document dated November 26, 1986 designated a "scope sheet” that it claims details the "scope of work to be performed, price, and time of performance” with sufficient particularity so as to be enforceable against defendant Kerby Saunders. The complaint seeks damages for breach of contract against this defendant. It is undisputed that, on December 2, 1986, Kerby Saunders executed a "scope sheet” with defendants D.N.S. Sheet Metal Co., Inc. and Center Sheet Metal, Inc. as subcontractors on the project.

The claims against defendants other than Kerby Saunders allege tortious interference with contractual relations and are therefore predicated upon a viable contract between plaintiff and Kerby Saunders. Defendants Jamaica Water Properties, Inc. and the Warkol corporations acquired the stock of Kerby Saunders on or about December 8, 1986, after it had allegedly entered into the subject contracts. The individual defendants are principals of those corporations.

It is uncontested that the contracts in issue are governed by the Statute of Frauds (General Obligations Law § 5-701). As a threshold issue, it should be noted that the writing relied upon by plaintiff is facially sufficient to comply with the requirements of the Statute. It is signed by defendant’s vice-president, who has at least apparent authority to bind the corporation, and sufficiently identifies the project, including the job number, the work to be performed and the price to be paid by defendant Kerby Saunders to Allied for fabrication and installation of ductwork and associated equipment. As such, it constitutes "some note or memorandum * * * in writing, and subscribed by the party to be charged” (id., § 5-701 [a]) and is in literal compliance with the requirements of the Statute of Frauds.

The question remains, however, whether the parties reached agreement on all the material terms of the contract so as to give rise to an enforceable agreement. To be considered a sufficient memorandum within the ambit of the Statute of Frauds, a writing "must designate the parties, identify and describe the subject matter and state all the essential or material terms of the contract” (Villano v G & C Homes, 46 AD2d 907, citing Tobias v Lynch, 192 App Div 54, affd 233 NY 515; 56 NY Jur, Statute of Frauds, § 165). Specifically in contention in this case is whether Kerby Saunders considered it necessary and material that Allied post a bond to guarantee its performance of the work. Plaintiff Allied contends that Kerby Saunders only raised the issue of a performance bond [169]*169as an excuse to withdraw from an otherwise complete and binding agreement.

The "scope sheet” upon which Allied relies is silent on the subject of a performance bond or any amount that securing performance would add to the price to be paid by Kerby Saunders to plaintiff. While it is not essential to determination of this appeal, it cannot be said that Kerby Saunders lacked a valid commercial reason for dealing with companies known to be in sound financial condition and capable of performing the work (see, Guard-Life Corp. v Park Hardware Mfg. Corp., 50 NY2d 183, 189-191). However, it is plaintiffs position that the requirement of a bond was merely a pretense and that the material terms of its contract with Kerby Saunders can be discerned from the "scope sheet” and the general specifications for the project.

If the performance bond is deemed to be necessary to the subcontract between Allied and Kerby Saunders, the Court must conclude, as Supreme Court found, that these parties failed to reach agreement and failed to draft a sufficient memorandum incorporating an essential term of their contract. For the purposes of appeal from a motion granting summary judgment dismissing the complaint, this Court may accept a plaintiffs contention that any details of performance, including requirements for the time within which various stages of the work are to be completed, could be ascertained by reference to the specifications, architect’s drawings and the general terms and conditions of performance specified by the property owner. However, this argument was not raised before Supreme Court, and the collateral documents are not a part of the record (First Intl. Bank v Blankstein & Son, 59 NY2d 436, 447; Kramer v Interboro Mut. Indem. Ins. Co., 176 AD2d 308, 309). Moreover, the general specifications for the construction project provide neither any guidance on the question of whether Kerby Saunders considered it essential that Allied post a performance bond nor what the value of such a bond might be.

The party seeking to enforce a contract bears the burden to establish that a binding agreement was made and to prove the terms of the contract (Paz v Singer Co., 151 AD2d 234, 235, citing Fisch, NY Evidence § 1098 [2d ed]). The agreement is required to be sufficiently definite so that a court can ascertain its terms for the purpose of determining whether it has been breached and avoiding imposition of contractual obligation under circumstances where intent to conclude a binding [170]*170agreement is not present (Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475, 482, cert denied 498 US 816). Parol evidence is admissible to demonstrate that no contract came into being due to the failure of a condition precedent (Hicks v Bush, 10 NY2d 488) or to resolve an ambiguity in an otherwise enforceable agreement (State of New York v Home Indem. Co., 66 NY2d 669, 671).

The document alleged to constitute the contract binding Kerby Saunders to employ Allied as its subcontractor is a single-page checklist dated November 26, 1988, containing 77 items divided into three sections. Each item is followed by two check boxes except the first item, which specifies the type of ductwork to be installed. Underneath the checklists, the sum of $11,200,000 is written in, and the document is endorsed by representatives of both Allied and Kerby Saunders.

The writing is devoid of any of the formalities of contract. There is no indication on the piece of paper that it is even intended to be a contract, rather than simply a memorandum of the work covered by plaintiff’s bid. It lacks words of agreement and is incomplete on its face. Item 16a, designated "Sheetmetal covers for equip”, bears the notation "(Sep. $)”, indicating that not every detail of the work to be performed and its pricing had been resolved. Finally, a contract of this magnitude is one that the courts would ordinarily expect the parties to embody in a formal writing (Mitchill v Lath, 247 NY 377, 380-381).

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Cite This Page — Counsel Stack

Bluebook (online)
206 A.D.2d 166, 619 N.Y.S.2d 260, 1994 N.Y. App. Div. LEXIS 11782, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allied-sheet-metal-works-inc-v-kerby-saunders-inc-nyappdiv-1994.