Advanced Refractory Technologies, Inc. v. Power Authority of State of N.Y.

• Decision Date: 08 March 1991
• Citation: 568 N.Y.S.2d 986,171 A.D.2d 1031
• Parties: ADVANCED REFRACTORY TECHNOLOGIES, INC., et al., and City of Niagara Falls, Respondents, v. POWER AUTHORITY OF the STATE OF NEW YORK, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 986

568 N.Y.S.2d 986

171 A.D.2d 1031

ADVANCED REFRACTORY TECHNOLOGIES, INC., et al., and City of Niagara Falls, Respondents, v. POWER AUTHORITY OF the STATE OF NEW YORK, Appellant.

Supreme Court, Appellate Division Fourth Department.

March 8, 1991.

Charles M. Pratt by Ann Quigley, New York City, for appellant, Power Authority of State of N.Y.

Carl E. Mooradian, Corp. Counsel by Victor Fuzak, Dept. of Law, Niagara Falls, for respondent, City of Niagara Falls.

Hodgson, Russ, Andrews, Woods & Goodyear by Victor Fuzak, Buffalo, for respondents, Except the City of Niagara Falls.

Before DOERR, J.P., BOOMER, GREEN, BALIO, DAVIS, JJ.

MEMORANDUM:

Plaintiffs, industrial users of replacement power generated by respondent Power Authority of the State of New York (PASNY) and the City of Niagara Falls, alleged that PASNY breached certain contracts (referred to as the Niagara Contract NS-1, the 1982 Settlement Agreement, and the 1988 Settlement Agreement) by fixing new rates in excess of cost. The first four causes of action should be dismissed insofar as they allege a breach of contract. Although the Niagara Contract NS-1 contains rate schedules, the contract expressly provides that the rate schedules are subject to modification by PASNY. There is no provision in any of the three contracts that restricts the power of PASNY to fix new rates or requires PASNY to sell its power at cost. Any rights plaintiffs may have concerning the rates to be charged are derived from statute and not from contract. The proper remedy to challenge PASNY's act of fixing the rates for power is by way of a CPLR article 78 proceeding (see, Press v. County of Monroe, 50 N.Y.2d 695, 431 N.Y.S.2d 394, 409 N.E.2d 870; Matter of Allied Sanitation v. Aponte, 142 A.D.2d 511, 530 N.Y.S.2d 146; lv denied 72 N.Y.2d 810, 534 N.Y.S.2d 938, 531 N.E.2d 658; Long Is. Coll. Hosp. v. Axelrod, 118 A.D.2d 177, 504 N.Y.S.2d 275; International Paper Co. v. Sterling Forest Pollution Control Corp., 105 A.D.2d 278, 482 N.Y.S.2d 827). We therefore convert the action to an article 78 proceeding with leave to plaintiffs, industrial users and the City of Niagara Falls, to amend and to serve a petition in place of the complaint within 20 days of the service of the order entered herein. The venue should remain in Niagara County (see, CPLR 505[a].

We also dismiss the eighth cause of action for an accounting inasmuch as it is based upon the causes of action for breach of contract.

Further, we dismiss the...