New York State Court of Claims

New York State Court of Claims
CRANE v. ROSWELL PARK CANCER INSTITUTE INCORPORATED, # 2018-053-539, Claim No. 126313, Motion No. M-91976

Synopsis

Defendant Roswell Park Cancer Institute's motion for summary judgment of a claim for breach of contract is denied.  The claim is for breach of an oral contract for pre-construction services and numerous questions of fact exist as to whether an oral contract exists. Defendant's argument that an oral agreement would violate the Statute of Frauds also fails as a question of fact exists as to the time period applicable to the alleged agreement.

Case information

UID: 2018-053-539
Claimant(s): CRANE HOGAN STRUCTURAL SYSTEMS, INC.
Claimant short name: CRANE
Footnote (claimant name) :
Defendant(s): ROSWELL PARK CANCER INSTITUTE INCORPORATED
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 126313
Motion number(s): M-91976
Cross-motion number(s):
Judge: J. DAVID SAMPSON
Claimant's attorney: ADAMS BELL ADAMS, P.C.
BY: Jared K. Cook, Esq.
Defendant's attorney: WILDER & LINNEBALL, LLP
BY: J. Joseph Wilder, Esq.
Nicole K. Joerg, Esq.
Third-party defendant's attorney:
Signature date: July 25, 2018
City: Buffalo
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

Claimant, Crane Hogan Structural Systems, Inc. (Crane Hogan), alleges in claim no. 126313 that defendant, Roswell Park Cancer Institute Incorporated (RPCI), refused to pay for the value of pre-construction services provided by Crane Hogan. RPCI moves for summary judgment dismissing the claim. Crane Hogan opposes the motion.

FACTUAL BACKGROUND

In February of 2014, RPCI issued a Request for Qualifications (RFQ) (Request No. 47-13, a copy of which is attached to the affidavit of Steven Wright as Exhibit 1). The purpose of the RFQ was to solicit firms that perform repair and maintenance work on parking garages. RPCI's parking garage was a three-level, 1,650 car, 40 year old, post-tensioned cement parking garage in need of maintenance and repair. Due to the heavy use of the parking garage, it was anticipated that the repair work would be performed in stages taking four to six years to complete at a cost of $2 to $5 million (see Wright affidavit Exhibit 1).

By e-mail dated March 28, 2014, RPCI advised Crane Hogan that it had been selected as one of the firms RPCI wanted to talk to about the garage project (see copy of e-mail attached to Wright affidavit as Exhibit 2). On April 29, 2014, RPCI sent to Crane Hogan an e-mail which read in pertinent part:

"I am pleased to inform you that we have selected your team

as having the experience and approach that most closely matches

our aspirations for the project. Accordingly, Ron [Niziol] and I

would like to meet with you in the next few days to discuss contract

terms and conditions to see if we can reach agreement on how best

to advance the project. Given the multi-year nature of the project,

I propose that we use one of our standard term contracts as the

starting point" (see copy of e-mail attached to Wright affidavit as

Exhibit 3).

On May 6, 2014, Ronald Niziol, a contract administrator for RPCI and Steven Wright, Vice President of Facilities Management for RPCI, met with Daniel Hogan, President, and William Clements, project manager and estimator, of Crane Hogan to discuss the terms and conditions of the garage project. According to the May 15, 2018 affidavit of William Clements, it was clear during this meeting that RPCI did not know what repairs were needed, the means to repair, the priority of the repairs or what impact the repairs would have upon the garage. Crane Hogan allegedly told RPCI that it needed to begin pre-construction testing, evaluation, design, planning, preparation and mobilization work immediately in order to be ready to begin construction by the end of June of 2014. According to Mr. Clements' affidavit, Crane Hogan was directed by Mr. Wright of RPCI to go ahead with the pre-construction work and stated that RPCI was authorized to pay Crane Hogan $25,000 for this pre-construction work (see Clements' affidavit). Attached to Clements' affidavit as Exhibit 1is a copy of the notes allegedly taken by Mr. Clements during the May 6, 2014 meeting with RPCI. Under section 4 entitled "Budget" is the notation "Pre-Contract Expenditures $25,000 authorized."

According to the May 15, 2018 affidavit of Daniel C. Hogan, President of Crane Hogan, the garage project was known in the construction industry as a design-build job, which means that the contractor has to work with an engineering firm and the owner to determine the owner's needs, design a plan that meets those needs, and then execute the design. According to Mr. Hogan, in a design-build job, pre-construction design work must be completed before construction can begin to determine the structural integrity of the existing structure, determine the extent of any deterioration, and identify necessary repairs before the design work can begin. Mr. Hogan stated in his affidavit that during the May 6, 2014 meeting, he told RPCI that in order to begin work in June or July of 2014, Crane Hogan would need to begin pre-construction testing, evaluation, design, planning, preparation and mobilization work immediately, and was assured by Mr. Wright of RPCI that Crane Hogan would be paid for this work in the event that a final contract agreement was not reached. According to Mr. Hogan, Mr. Wright assured him during the May 6, 2014 meeting that he had the authority to pay up to $25,000 in pre-construction costs without a contract and that Mr. Niziol of RPCI confirmed Wright's authority.

Attached to Mr. Hogan's affidavit as exhibit 1 is a copy of his notes of the May 6, 2014 meeting with RPCI. According to section 6 of Mr. Hogan's RPCI Meeting Summary, "Jim K can start design ASAP without contract. Roswell can pay up to $25,000.00 cost if contract doesn't go thru."

Steven Wright, RPCI Vice President of Facilities Management, supplied a supporting affidavit sworn to March 12, 2018. According to Mr. Wright, the contracting process is rigid. It involves: (1) a Request for Qualifications; (2) submissions of qualifications from contractors; (3) negotiations to set terms and conditions; (4) submission of tentative terms to Roswell's legal department; (5) submission of proposed project and budget to the Board of Directors for approval; and (6) release of the contract so work could begin. Mr. Wright stated in his affidavit that the process never got beyond the third step involving the negotiation of terms and that no written or oral contract was ever agreed upon. Mr. Wright further stated that when a contractor needs to perform pre-contract work, RPCI's legal department will execute a Notice of Intent to Award, authorizing the contractor to perform the necessary services. According to Mr. Wright's affidavit, at no time during the May 6, 2014 meeting did he direct Crane Hogan to begin repair or maintenance work on the parking garage. He further stated that he did not have the authority to direct a contractor to perform any services before a written contract was executed.

Mr. Wright also stated in his affidavit that RPCI was trying to negotiate a multi-year contract for repairs to its garage. These negotiations mainly concerned pricing. RPCI and Crane Hogan never reached an agreement regarding pricing. According to Mr. Wright's affidavit, he cancelled contract negotiations with Crane Hogan on July 7, 2014 and returned all presentation materials Crane Hogan had provided during the negotiations. There were no other materials provided by Crane Hogan to RPCI. Mr. Wright stated that no work order or Notice of Intent to Award authorizing Crane Hogan to perform any pre-contract work was ever authorized by RPCI (see March 12, 2018 affidavit of Steven Wright).

Ronald Niziol, RPCI contract administrator testified at his deposition that neither he nor Mr. Wright ever told Crane Hogan during the May 2014 meeting that RPCI had $25,000 in authority to spend on pre-contract construction services. He further testified that neither he nor Mr. Wright had the authority to approve $25,000 in pre-contract services without approval from the legal department (see pgs. 94-96 of the deposition testimony of Ronald Nizoli attached to the affidavit of Nicole K. Joerg, Esq. as Exhibit D).

DECISION

Summary judgment is a drastic remedy which should only be granted when the moving party establishes that there are no triable issues of fact (Vega v Restani Constr. Corp., 18 NY3d 499 [2012]). The proponent of such a motion must present facts in evidentiary form sufficient to establish its right to judgment as a matter of law (Alvarez v Prospect Hosp., 68 NY2d 320 [1986]; Zuckerman v City of New York, 49 NY2d 557 [1980]). If the proponent of the motion fails to make a prima facie showing of entitlement to summary judgment, its motion must be denied regardless of the sufficiency of the opposing papers (Alvarez v Prospect Hosp., supra at 324). 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 a triable issue of fact (Zuckerman v City of New York, supra at 562). In determining a motion for summary judgment, the evidence must be viewed in the light most favorable to the non-moving party (Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P., 7 NY3d 96 [2006]).

The basic elements of a cause of action for a breach of contract are: (1) the formation of a contract between the parties; (2) performance by plaintiff; (3) defendant's failure to perform; and (4) resulting damages (Niagara Foods, Inc. v Ferguson Elec. Serv. Co., Inc., 111 AD3d 1374 [4th Dept 2013]; Clearmont Prop., LLC v Eisner, 58 AD3d 1052 [3d Dept 2009]). In order to establish an agreement, "a claimant must set forth an offer, acceptance, consideration, mutual assent and an intent to be bound" (Resetarits Constr. Corp. v Elizabeth Pierce Olmstead, M.D. Center for the Visually Impaired, 118 AD3d 1454 [4th Dept 2014]). Defendant RPCI moves for summary judgment alleging that there was never an agreement between the parties as to the material terms of a contract to repair and maintain Roswell's parking garage, that the statute of frauds bars any oral agreement that cannot be performed within one year, and that any damages are too speculative to be recoverable.

It is undisputed that the material terms of a contract for the repair of RPCI's parking garage were never agreed upon between the parties. RPCI argues that any alleged agreement for pre-construction services would have been part of the garage contract and that there can be no breach of an agreement to perform pre-construction services as there was no contract, only an agreement to agree. Crane Hogan, however, is not suing for breach of a contract to repair and maintain the parking garage. Rather, Crane Hogan is suing for breach of an oral contract for pre-construction services. The possible creation of an oral contract centers on a meeting between the parties which occurred on May 6, 2014. Both parties have submitted affidavits and referenced sections of deposition transcripts regarding what was said at this meeting. RPCI argues that neither of its attendees, Mr. Wright and Mr. Niziol, had the authority to authorize a contract for pre-construction services without the approval of the legal department. Crane Hogan argues that Wright, with the approval of Niziol, authorized pre-construction services up to $25,000 at this meeting and had the authority or the apparent authority to do so. However, the information needed to determine if an oral contract was created, its terms and whether a breach occurred can only be determined from the testimony at trial of the persons involved in the contract negotiations and in the May 6, 2014 meeting so the Court can assess their credibility. As many questions of fact exist as to whether an oral contract was created, RPCI's motion for summary judgment must be denied.

RPCI further argues that the claim should be dismissed as an oral agreement would be in violation of the Statute of Frauds. General Obligations Law 5-701 (a) (1) provides that an agreement is void if it is not in writing when by its terms it is not to be performed within one year (Sheehy v Clifford Chance Rogers & Wells LLP, 3 NY3d 554 [2004]). RPCI argues that any oral contract was void as the garage contract being negotiated was to be completed in stages over a four to six year period and, thus, had to be in writing. Crane Hogan counters that the oral contract which forms the basis of this claim was for pre-construction services only which were to be completed within a couple of weeks and, thus, did not have to be in writing. Again, this is a question of fact which precludes an award of summary judgment.

Finally, RPCI argues that Crane Hogan's damages are too speculative to be recoverable. In support, RPCI relies, in part, on Kenford Co. v County of Erie, 67 NY2d 257 [1986] in which a claim for loss of prospective profits over the length of a twenty year contract were disallowed. In the present case, Crane Hogan is not attempting to recover the profits it might have gained over the length of this four to six year garage project. Rather, it is seeking to recover for pre-construction services previously performed. Moreover, the decision in Kenford was rendered after a damages trial. If the present matter goes to trial, Crane Hogan has the burden to establish what services it rendered and the value of those services.

Based on the foregoing, RPCI has failed to meet its burden to establish an entitlement to judgment dismissing the claim for breach of contract as a matter of law. Accordingly, defendant's motion no. M-91976 for summary judgment dismissing claim no. 126313 is denied.

July 25, 2018

Buffalo, New York

J. DAVID SAMPSON

Judge of the Court of Claims

The following have been read and considered by the Court:

1. Notice of motion and affidavit of Nicole K. Joerg, Esq. sworn to March 13, 2018, with annexed Exhibits A-H;

2. Supporting affidavit of Steven Wright sworn to March 12, 2018, with annexed Exhibits 1-4;

3. Supporting memorandum of law dated March 13, 2018;

4. Opposing memorandum of law dated May 15, 2018;

5. Opposing affirmation of Jared K. Cook, Esq. dated May 15, 2018, with annexed Exhibits A-J;

6. Opposing affidavit of William Clements sworn to May 15, 2018, with annexed Exhibits 1-3;

7. Opposing affidavit of Daniel Hogan sworn to May 15, 2018, with annexed Exhibit 1; and

8. Reply memorandum of law dated May 21, 2018.