Littleton Construction Ltd., Appellant,v.Huber Construction, Inc. et al., Respondents.BriefN.Y.May 5, 20160 To be Argued by: WAYNE I. FREID, ESQ. Time Requested for Argument: (5 Minutes) STATE OF NEW YORK Court of Appeals APL-2015-00063 LITTLETON CONSTRUCTION LTD., Appellant, vs. HUBER CONSTRUCTION, INC. and LITTLETON/HUBER JOINT VENTURE, Respondents. Appellate Division Docket No. CA 14-00818. Erie County Index No. 2010-011763. BRIEF FOR APPELLANT LITTLETON CONSTRUCTION LTD. FREID AND KLAWON Attorneys for Appellant Littleton Construction Ltd. 17 Beresford Court Williamsville, New York 14221 Telephone: (716) 565-2000 Facsimile: (716) 565-2002 WAYNE I. FREID, ESQ. Of Counsel Date of Completion: April 21, 2015. BATAVIA LEGAL PRINTING, INC.— Telephone (866) 768-2100 DISCLOSURE PURSUANT TO 22 NYCRR §500.l(f) This Brief is being submitted on behalf of the Respondent-Appellant, Littleton Construction Ltd., a New York corporation. It does not have any parent corporation or subsidiaries and the only affiliated entity is Littleton/Huber Joint Venture, a party to this action. TABLE OF CONTENTS TABLE OF AUTHORITIES ............................................................................... ii QUESTION PRESENTED .................................................................................. I PRELIMINARY STATEMENT .......................................................................... 2 STATEMENT OF FACTS ................................................................................... 4 ARGUMENT ........................................................................................................ ? APPLICABLE LEGAL STANDARD ....................................................... 7 POINT I THE FAILURE OF THE PARTIES TO PRODUCE THE ORIGINAL DOCUMENTS PRECLUDES THE GRANTING OF SUMMARY JUDGMENT TO DEFENDANTS ............ ? POINT II THE JOINT VENTURE AGREEMENT IS AMBIGUOUS AND EXTRINSIC EVIDENCE IS REQUIRED ................. 8 POINT III THE LEGAL EFFECT, IF ANY, OF THE OPERATING AGREEMENT LITTLETON/HUBER JOINT VENTURE CAN ONLY BE DETERMINED BY EXTRINSIC EVIDENCE .......................................................................... 1 0 POINT IV THERE WAS NO ACCORD AND SATISFACTION AS REGARDS THE ISSUE AT HAND ............................. II CONCLUSION ................................................................................................... l3 - 1 - TABLE OF AUTHORITIES CASES Beeker-Fineman Camps v. Public Serv. Mut. Ins. Co., 52 A.D.2d 656, 382 N.Y.S.2d 122 ....................................................................... 9-10 Capel in Assoc. v. Globe Mfg. Corp., 34 N.Y.2d 338, 341, 357 N.Y.S.2d 478, 313 N.E.2d 776 .................................... 7 Conboy vs Armstrong, 488 N.Y.S. 2d 901, 902 (1985) ............................................................................. 12 Conde v. Eric Service Corp., 158 A.D.2d 651, 552 N.Y.S.2d 121 ...................................................................... 7 CPN Mechanical, Inc. v. Madison Park Owner LLC, 94 A.D.3d 626, 2012 WL 1393009 (1st Dep't 2012) ............................................ 7 Gilpin v. Oswego Builders, Inc., 930 N.Y.S.2d 120 (2011) ...................................................................................... 9 Hammondv. State ofNew York, 157 A.D.2d 391, 556 N.Y.S.2d 82 ........................................................................ 7 Hartford Ace. & Ind. Co. v. Wesolowski, supra, 33 N.Y. 2d at 172, 350 N.Y.S.2d 958, 305 N.E. 2d 907 ....................................... 9 Jordan v. Levy, 16 A.D.2d 64, 225 N.Y.S.2d 339 .......................................................................... 10 Lachs v. Fidelity & Cas. Co. ofN.Y, 306 N.Y. 357, 364, 118 N.E.2d 555 ...................................................................... 9 Mallard Constr. Corp. v. County Fed. Sav. & Loan Assn., 32 N.Y.2d 285, 291, 344 N.Y.S.2d 925, 298 N.E.2d 96 ....................................... 9 - 11- . Marine Midland Bank-Eastern Nat. Assn. v. Prel-Albany, 50 A.D.2d 996, 377 N.Y.S.2d ................................................................................ 10 MBIA Ins. Corp. v. Countrywide Home Loans, Inc., 936 N.Y.S.2d 513 (Sup 2012) ............................................................................... 10 Merrill Lynch Realty vs Skinner, 63 N.Y. 2d 590, 596 (1984) .................................................................................. 12 Micro-Link, LLC v. Town of Amherst, 109 A.D.3d 1130, 972 N.Y.S.2d 369 (4th Dep't 2013) ......................................... 7 Morales v. Asarese Matters Community Center, 103 A.D.3d 1262, 959 N.Y.S.2d 790 (4th Dep't 2013) ......................................... 7 0 'Neill Supply Co. vs Petroleum Heat & Power Co., 280 N.Y. 50, 55-56, 19 N.E. 2d 676 ..................................................................... 9 Rotuba Extruders v. Ceppos, 46 N.Y.2d 223, 231, 413 N.Y.S.2d 141, 385 N.E.2d 1068 .................................. 7 Schwartz v. Epstein, 155 A.D.2d 524, 547 N.Y.S.2d 382 ...................................................................... 7 Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 144 N.E.2d 387 ...................................... 7 Steinmetz vs. Samuel-Rozengaum USA., Inc., 105 A.D.3d 678, 965 N.Y.S.2d 405 (2013) .......................................................... 11 Syncora Guarantee Inc. v. Countrywide Home Loans, Inc., 935 N.Y.S.2d 858 (Sup 2012) .............................................................................. 10 Weiss v. Garfield, 21 A.D.2d 156,249 N.Y.S.2d 458 ....................................................................... 10 67 Wall Street Co. vs Franklin Nat. Bank, 37 N.Y. 2d 245, 248-249, 371 N.Y.S. 2d 915, 333 N.E. 2d 184 ......................... 9 - 111 - Question Presented 1. In the light most favorable to the Respondent-Appellant does the evidence preclude the granting of Summary Judgment to Appellants-Respondents on the issue of Appellant-Respondent Huber's entitlement to a 9% "Management Fee"? The Trial Court denied Appellant-Respondent's Motion. The Appellate Division (Four Judicial Department) reversed, granting Appellants- Respondents' Summary Judgment Motion. -1- Preliminary Statement The sole remaining issue (following the Trial Court's granting in part of Appellants-Respondents' Motion for Summary Judgment) regards Respondent- Appellant's surviving claim to receive a portion of the 9% Management Fee for projects commonly referred to as Buffalo Public School #s 84, 195 and 205 i.e. that Appellant-Respondent Huber should not have received same. The Respondent-Appellant's claim is set forth in its Amended Complaint as its Second Cause of Action (R63). The Operating Agreement annexed to Respondent-Appellant's Amended Complaint (R67-70) the parties agree was prepared by cutting and pasting portions of the parties' prior Agreements. Respondent-Appellant contends however that said Operating Agreement does in fact accurately reflect the parties' Agreement. Respondent-Appellant contends all Agreements were prepared by Appellant- Respondent Huber (R169-170). The Respondent-Appellant pointedly denies preparing said Operating Agreement (R178-182) and in support of it's contention that Respondent-Appellant Huber prepared same points out that the Agreement was in fact provided to Respondent-Appellant by the Appellant-Respondent Huber (R170-171). The Appellant-Respondent, by its employee Mark Schober, denies ever seeing said Operating Agreement prior to October, 2012, and denies keeping it in -2- Huber's files (R299) but refers to same in an E-mail dated May 27, 2010, in response to Respondent-Appellant's request (R392) for the prevailing Agreement(s) between the parties (R362). Respondent-Appellant contends that the Appellant-Respondent Huber is entitled to a 9% Management Fee as relates only to Buffalo Public School #27 (R93; 190) which was paid. Respondent-Appellant maintains it is entitled to it's portion of any Management Fee paid to Appellant-Respondent Huber as relates to Buffalo Public Schools #s 84, 195 and 205 (R257) i.e. that said 9% should not have been paid and instead divided between the parties 55%/45%. -3- Statement of Facts The Parties Both Respondent-Appellant and Appellant-Respondent Huber are New York Corporations involved in the construction trades in Western, New York (R62; 552; 292). The Appellant-Respondent Joint Venture is a New York Joint Venture formed by Respondent-Appellant and Appellant-Respondent Huber to engage in the Buffalo Public Schools renovation program (R62; 293). The Parties' Agreements. The Boxhorn Memorandum of Understanding The parties' initial agreement referred to as "The Boxhom Memorandum of Understanding" was executed on November 27, 2007 (R128-29; 296; 322). In relevant part the Boxhorn Memorandum of Understanding provided for a Management Fee to Huber between 6%- 15% (R129-130; ). A rider dated November 27, 2007 set said fee at 10% (R130; 323) and a second rider executed December 21,2007 and December 26,2007, reduced same to 9% (R130-31; 324) as relates to Buffalo Public School #27 only. The Joint Venture Memorandum of Understanding On December 21, 2007 and December 28, 2007, the parties allegedly executed another agreement entitled "Memorandum of Understanding -4- Littleton/Huber Joint Venture" (The "Joint Venture Memorandum of Understanding" (R327; 151-152). The Joint Venture Memorandum of Understanding incorporated certain changes to the Boxhom Memorandum of Understanding (R325-327). The Joint Venture Memorandum ofUnderstanding allows for payment of a home office management fee to Huber of 9% of the contract value as agreed to by Plaintiff and Huber (R327). Notably, the Joint Venture Memorandum of Understanding has attached the rider regarding Buffalo Public School# 27 (R328) which was also attached to the Boxhom Memorandum of Understanding (R324). In addition, the Joint Venture Memorandum of Understanding (R325-327) is devoid of any reference to the Buffalo Public School project (except for the rider regarding Buffalo Public School# 27). There is no reference whatsoever in the Joint Venture Memorandum of Understanding to Buffalo Public School #s 84, 195 or 205. Respondent-Appellant contends that the Joint Venture Memorandum of Understanding (by virtue of the rider) applies only to Buffalo Public School27 and not to Buffalo Public School #s 84, 195 or 205. (R189-193). -5- Operating Agreement Littleton/Huber Joint Venture Huber then prepared an "Operating Agreement Littleton/Huber Joint Venture (The Joint Venture Operating Agreement)" which was never signed (R188). 2"d Operating Agreement Littleton/Huber Joint Venture Agreement An Agreement (again) entitled "Operating Agreement Littleton/Huber Joint Venture" (R67-69; 363-365) was created by cutting and pasting portions of the parties' prior Agreements. Respondent-Appellant repeatedly denies preparing said Agreement (Rl78-182). Said Agreement does not contain any provision for either party to receive a Management Fee (R67-69). Neither party can produce any original documents (R748). -6- Argument Applicable Legal Standard Summary Judgment in contract actions is precluded if triable issues of fact exist. See CPN Mechanical. Inc. v. Madison Park Owner LLC. 94 A.D.3d 626,2012 WL 1393009 (1st Dep't 2012); Micro-Link. LLC v. Town of Amherst. 109 A.D.3d 1130. 972 N.Y.S.2d 369 (4th Dep't 2013); Morales v. Asarese Matters Community Center. 103 A.D.3d 1262. 959 N.Y.S.2d 790 (4th Dep't 2013). It is axiomatic that summary judgment requires issue-finding rather than issue-determination and that resolution of issues of credibility is not appropriate (see, Rotuba Extruders v. Ceppos, 46 N.Y.2d 223, 231, 413 N.Y.S.2d 141, 385 N.E.2d 1068; Capelin Assoc. v. Globe Mfg. Corp .. 34 N.Y.2d 338,341,357 N.Y.S.2d 478,313 N.E.2d 776; Sillmany. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 144 N.E.2d 387; Hammond v. State ofNew York. 157 A.D.2d 391, 556 N.Y.S.2d 82; Conde v. Eric Service Corp .. 158 A.D.2d 651, 552 N.Y.S.2d 121; Schwartz v. Epstein, 155 A.D.2d 524, 547 N.Y.S.2d 382). Point I The Failure of the Parties to Produce the Original Documents Precludes the Granting of Summary Judgment to Defendants Neither party can produce any of the original documents in question (R748). The documents in question are: -7- 1. Operating Agreement Littleton/Huber Joint Venture (R67-70). This is a copy of the document Appellants-Respondents maintain was cut and pasted by Respondent-Appellant Littleton Construction Ltd. to delete the paragraph authorizing payment to Appellant-Respondent Huber Construction of a 9% management fee. 2. Memorandum ofUnderstanding Littleton/Huber Joint Venture (R352- 355). This is a copy of the document Appellants-Respondents maintain is controlling and contains the paragraph authorizing payment to Appellant- Respondent Huber Construction of the 9% management fee. However said document also evidences being cut and pasted by insertion of the paragraph in question (R354). Under these circumstances absent the original documents only extrinsic evidence can establish which Agreement(s) reflect the parties' intentions and which document(s), if any, were created from the other document(s). Point II The Joint Venture Agreement is Ambiguous and Extrinsic Evidence is Required The Joint Venture Memorandum of Understanding (R325-327) which Appellants-Respondents contend is the controlling Agreement contains no reference to the Buffalo Schools Project nor to Schools# 84, 195 and 205. -8- Furthermore, the Joint Venture Memorandum of Understanding has a rider attached (R328) which applies only to Buffalo Public School #27. Respondent-Appellant contends the Joint Venture Memorandum of Understanding is ambiguous and the intention of the parties can not be determined from the Agreement itself and extrinsic evidence is required (as to the schools other than #27). Where the language employed in a contract is ambiguous or equivocal, the parties may submit parol evidence concerning the facts and circumstances surrounding the making of the Agreement, 67 Wall Street Co. vs Franklin Nat. Bank. 37 N.Y. 2d 245. 248-249. 371 N.Y.S. 2d 915. 333 N.E. 2d 184; O'Neill Supply Co. vs Petroleum Heat & Power Co .. 280 N.Y. 50. 55-56. 19 N.E. 2d 676. Further, where such ambiguity or equivocation exists and the extrinsic evidence presents a question of credibility or a choice among reasonable inferences, the case should not be resolved by way of summary judgment Gilpin v. Oswego Builders. Inc .. 930 N.Y.S.2d 120 (2011) (Hartford Ace. & Ind. Co. v. Wesolowski. supra, 33 N.Y. 2d at 172, 350 N.Y.S.2d 958, 305 N.E. 2d 907; Mallard Constr. Corp. v. County Fed. Sav. & Loan Assn., 32 N.Y.2d 285, 291. 344 N.Y.S.2d 925, 298 N.E.2d 96; Lachs v. Fidelity & Cas. Co. ofN.Y., 306 N.Y. 357, 364, 118 N.E.2d 555) and upon such motion the extrinsic evidence will be constructed in a light most favorable to the party moved against (Beeker-Fineman -9- Camps v. Public Serv. Mut. Ins. Co., 52 A.D.2d 656, 382 N.Y.S.2d 122; Marine Midland Bank-Eastern Nat. Assn. v. Prel-Albany, 50 A.D.2d 996, 377 N.Y.S.2d 234; Weiss v. Garfield, 21 A.D.2d 156, 249 N.Y.S.2d 458; Jordan v. Levy, 16 A.D.2d 64, 225 N.Y.S.2d 339). Upon a motion for summary judgment based on contract, sumn~.ary judgment is only appropriate where the language of the contract is unambiguous and reasonable minds could not differ as to its meaning; if the contract is reasonably susceptible of more than one interpretation, summary judgment is inappropriate. Syncora Guarantee Inc. v. Countrywide Home Loans, Inc., 935 N.Y.S.2d 858 (Sup 2012); MBIA Ins. Corp. v. Countrywide Home Loans, Inc., 936 N.Y.S.2d 513 (Sup 2012). Point III The Legal Effect, if Any, of the Operating Agreement Littleton/Huber Joint Venture Can Only be Determined by Extrinsic Evidence Respondent-Appellant contends in its Amended Complaint (R63-64) that it is entitled to a share of the 9% Management Fee charged by Appellant-Respondent Huber for Schools# 84, 195 and 205. Respondent-Appellant's claim is based upon the Operating Agreement Littleton/Huber Joint Venture which does not contain a provision for payment of the 9% Management Fee charged by Appellant- Respondent Huber on said projects. -10- The parties agree said Agreement was created by cutting and pasting portions of their prior Agreement(s) but neither admits creating same. Respondent-Appellant denies creating said document (R178-182). Appellant-Respondent Huber confirmed said Agreement (via E-mail to Plaintiff on May 27, 2010 (R362)) as "our Agreement" to wit; "you keep asking for individual Joint Venture agreements for all the schools ... Our Agreement for all our work is the Memorandum of Understanding (or as reworked our Operating Agreement) emphasis supplied". See generally Steinmetz vs. Samuel-Rozengaum U.S.A .. Inc., 105 A.D.3d 678, 965 N.Y.S.2d 405 (2013). Point IV There was No Accord and Satisfaction as Regards the Issue at Hand The parties' October 19, 2009 Agreement relates solely to "overhead" expenses (R393-394). Respondent-Appellant's claim relates to its alleged entitlement to a (portion) of any management fee for its services (R63-65) as set forth in Respondent-Appellant's Amended Complaint. There is no mention in the October 19, 2009 Agreement of the management fee which is at issue. Accord and Satisfaction Agreements can only be enforced when it is clear that the acceptance will settle or discharge a legitimate and disputed claim. -11- Merrill Lynch Realty vs Skinner, 63 N.Y. 2d 590, 596 (1984). The person alleged to have accepted payment cannot be determined to have created an Accord and Satisfaction unless the "person receiving the check has been clearly informed that acceptance of the amount offered will settle or discharge the claim" Conboy vs Armstrong, 488 N.Y.S. 2d 901, 902 (1985). -12- Conclusion For the reasons above stated the Appellate Division's Decision should be reversed and the Trial Court's Decision and Order denying (in part) Appellants- Respondent's Motion for Summary Judgment should be affirmed. Dated: Amherst, New York April21, 2015 -13- F Attorneys for Respondent-Appellant Littleton Construction Ltd. I 17 Beresford Court Williamsville, New York 14221 Telephone: (716) 565-2000