Dover Gourmet Corp. v. Cnty. of Nassau
| Decision Date | 24 April 2020 |
| Docket Number | 612941/19 |
| Citation | 145 N.Y.S.3d 291,71 Misc.3d 741 |
| Court | New York Supreme Court |
| Parties | DOVER GOURMET CORPORATION, Plaintiff-Petitioner, v. COUNTY OF NASSAU and Nassau County Department of Parks, Recreation & Museums, Defendants-Respondents. |
Plaintiffs/Petitioners: DOVER GOURMET CORPORATION, CIAFFA, MICHAEL ANTHONY on 09/18/2019 FORCHELLI DEEGAN TERRANA LLP.
Defendants/Respondents County of Nassau: VAN DER WAAG, ROBERT FREDERICK on 05/06/2020 ROBERT FREDERICK VANDERWAAG ESQ. KRETZING, LAUREL ROW on 11/20/2019 Office of the Nassau County Attorney BERGSTROM, IAN JOSEPH on 11/20/2019 Office of the Nassau County Attorney.
Defendants/Respondents Nassau County Department of Parks, Recreation and Museums: VAN DER WAAG, ROBERT FREDERICK on 05/06/2020 ROBERT FREDERICK VANDERWAAG ESQ. KRETZING, LAUREL ROW on 11/20/2019 Office of the Nassau County Attorney BERGSTROM, IAN JOSEPH on 11/20/2019 Office of the Nassau County Attorney.
In this so-called hybrid action and Article 78 proceeding, the Plaintiff-Petitioner, Dover Gourmet Corporation ("Dover"), seeks a declaration that its license agreement with Defendant-Respondent County of Nassau, which granted Dover exclusive rights for food services and catered events at County Park facilities, was extended by the County through December 31, 2021. Dover also seeks a judgment pursuant to CPLR Art. 78, setting aside the County's termination of the license agreement as arbitrary and capricious, as well as a permanent injunction prohibiting the County and Defendant-Respondent Nassau County Department of Parks, Recreation & Museums ("Parks or Parks Department"), from issuing or pursuing requests for proposals ("RFPs") respecting catering and food concessions at County parks through 2021.1
The County and Defendant-Respondent Nassau County Department of Parks, Recreation & Museums answered the petition making objections in points of law with respect to the Article 78 proceeding and moves, inter alia , for summary judgment declaring that it lawfully terminated the license agreement and otherwise seeks dismissal of Dover's claims, severing and continuing the County's counterclaim for damages for breach of the license agreement.
Dover cross-moves for partial summary judgment, inter alia , declaring that the license agreement was extended through December 31, 2021 and a determination that the County's termination of the license agreement for convenience was arbitrary and capricious.
Dover also moves for an order pursuant to CPLR 6301 and 6311 enjoining the County from, inter alia , interfering with its license rights pending the conclusion of the proceedings.
The petition, motions and cross motion are determined as follows.
It is undisputed that following a resolution adopted by the Nassau County Legislature on December 21, 2009, and authorized by the Nassau County Executive, the County Executive executed a License Agreement on January 5, 2010 granting Dover the right to provide exclusive catering operations for various County parks and facilities under the jurisdiction of the Parks Department. The license agreement recited a commencement date of January 1, 2010 and termination date of December 31, 2019 and gave an option to extend the term for an additional two-year period by mutual agreement of the parties.
Under the terms of the agreement, Dover was required to pay the greater of a fixed yearly amount of $90,000 or a percentage of monthly catering receipts. The amounts payable by Dover under this agreement were, in fact, based on the percentage of Dover's monthly receipts, which exceeded the fixed yearly amount. In this regard, from 2010 through 2019, the amounts remitted by Dover to the County each year exceeded $100,000, with the lowest amount being $157,604.20 and the highest amount being $332,929.72. The agreement also provided that Dover would make certain capital improvements at County facilities.
Other relevant portions of the license agreement are as follows:
3.2 Termination for Convenience by Parks. Notwithstanding any language contained herein, this License is terminable at will by the County in its sole and absolute discretion, at any time, which termination shall not be exercised in an arbitrary or capricious manner. Such termination shall be effective thirty (30) days after written notice is sent to Licensee. Parks, the County, its employees and agents shall not be liable for damages to Licensee in the event that this License is terminated by Parks as provided for herein. In the event such notice is not given, this License shall terminate as described in Section 3.1 of this agreement.
3.3 Termination for Cause. Parks may terminate this License for cause as follows:
(a) Should Licensee breach or fail to comply with any of the provisions of this License, any federal, state or local law, rule, regulation or order affecting the License or the Licenses Premises with regard to any and all matters, County may in writing order Licensee to remedy such breach or comply with such provision, law, rule, regulation or order, and in the event that Licensee fails to comply with such written notice within thirty (3) days from the receipt thereof, subject to unavoidable delays beyond the reasonable control of Licensee, then this License shall immediately terminate. If said breach or failure to comply is corrected, and a repeated violation of the same provision, law, rule, regulation or order follows thereafter, County, by notice in writing, may revoke and terminate this License, such revocation and termination to be immediately effective on the mailing thereof.
(b) The following shall constitute events of default for which this License may be terminated on one-day notice: (I) appointment of any receiver of Licensee's assets; (ii) the making of a general assignment for the benefit of creditor's; (iii) the occurrence of any act which operates to deprive Licensee permanently of the rights, powers, and privileges necessary for the proper conduct and operation of the License; (iv) the levy of any attachment or execution which substantially interferes with Licensee's operations under this License and which attachment or execution is not vacated, dismissed, stayed or set aside within a period of sixty days; (v) should Licensee be the subject of any proceeding under which all or any part of its assets may be subject to seizure, forfeiture or divestiture; and/or (vi) should any principal of Licensee be convicted of a crime involving moral turpitude. Nothing contained in paragraphs (a) or (b) above shall be deemed to imply or to be construed to represent an exclusive enumeration of circumstances under which County may terminate this License.
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V. Right to Audit
5.1 Parks, the Comptroller and other duly authorized representatives of the County shall have the right, during business hours, after giving the Licensee twenty four (24) hours advanced written notice, to examine or audit Licensee's Records to verify Gross Receipts as reported by the Licensee. Notwithstanding the requirement for twenty-four (24) hour advance notice with respect to access to the Licensee's Records for the purpose of audit, Parks, the Comptroller or other duly authorized County representative reserves the right to conduct, and Licensee hereby permits, periodic "spot" inspections of the Licensed Premises at any time during business hours for the purpose of inspecting any equipment used by Licensee, including, but not limited to, cash registers and recording machines, and all reports or data generated from or by the equipment and to include health code and regulatory inspections, maintenance inspections and quality assurance inspections. Licensee shall cooperate fully and assist Parks, the Comptroller or other duly authorized representative of the County in any inspection, examination or audit thereof. In the event that the Licensee's Records, including supporting documentation, are situated at a location fifty (5) miles or more from the County, the Records must be brought to the County for examination and audit or Licensee must pay food, board and travel costs incidental to two (2) auditors conducting such examination or audit at sail location.
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17.1 This Agreement and the rights and obligations hereunder may not be in whole or part (I) assigned, transferred or disposed of, (ii) amended, (iii) waived, or (iv) subcontracted, without the prior written consent of the County Executive or his or her duly designated deputy (the "County Executive"), and any purported assignment, other disposal or modification without such prior written consent shall be null and void. The failure of a party to assert any of its rights under this Agreement, including the right to demand strict performance, shall not constitute a waiver of such rights.
17.2 It shall be a condition to the consent of the County Executive to any assignment or subcontract that the Person to or with whom or which such assignment or subcontract is made agrees in writing that, except as provided in the following sentence with respect to amounts payable by the County, such Person shall be bound by the terms and conditions of this Agreement as though an original party hereto. Unless the action being approved is an assignment of every right and obligation of the Licensee under this Agreement, (I) the Licensee shall remain responsible for the full performance of its obligations under this Agreement, and (ii) no amounts payable by the County under this Agreement shall be or become payable by the County to any Person other that the Licensee.
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XX. NO ARREARS OR DEFAULT
20.1 The Licensee is not in arrears to the County upon any debt or contract, and it is not in default as surety, contractor, or otherwise upon any obligation to the County, including any obligation to pay taxes to, or perform services for or on behalf of, the County.
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