Freedman v. Chemical Const. Corp.

• Decision Date: 15 December 1977
• Court: New York Court of Appeals Court of Appeals
• Parties: , 372 N.E.2d 12 Benjamin H. FREEDMAN, Appellant, v. CHEMICAL CONSTRUCTION CORPORATION, Respondent, et al., Defendants.

Page 176

401 N.Y.S.2d 176

43 N.Y.2d 260, 372 N.E.2d 12

Benjamin H. FREEDMAN, Appellant, v. CHEMICAL CONSTRUCTION CORPORATION, Respondent, et al., Defendants.

Court of Appeals of New York.

Dec. 15, 1977.

Gene Crescenzi, New York City, for appellant.

Donald M. Crook and Fredrick E. Sherman, New York City, for respondent.

OPINION OF THE COURT

BREITEL, Chief Judge.

In an action on an alleged oral agreement to pay plaintiff a 5% Fee for his participation in the obtaining by defendant of a $41 million construction contract, defendant moves under CPLR 3212 for summary judgment based on the Statute of Frauds (General Obligations Law, § 5-701(a), subds. 1, 10). Plaintiff's claim arises out of his asserted role, varyingly described, in procuring for defendant a contract to build a chemical plant in Saudi Arabia. Supreme Court denied the motion; a unanimous Appellate Division reversed; and plaintiff appeals.

There are two issues. The first is whether a motion for summary judgment based on the New York Statute of Frauds may be defeated by plaintiff's general averment, without more, that the parties agreed to be governed by the law of Saudi Arabia. Assuming, however, that no such agreement is properly asserted, and that New York law applies, the second issue is whether the fee agreement for obtaining the construction contract is within the Statute of Frauds (General Obligations Law, § 5-701). In particular, at issue is whether, within the meaning of subdivision 1 of the cited statute, the agreement "(b)y its terms (was) not to be performed within one year", and, whether within the meaning of subdivision 10, relating to business brokers and finders, plaintiff's alleged activities as an intermediary amounted to negotiation of a "business opportunity".

The order of the Appellate Division should be affirmed, and the complaint stand dismissed. Having failed to present any evidentiary facts that the parties manifested an intention that Saudi law would govern, plaintiff raises no triable issue of fact. Applying the New York Statute of Frauds, the suit is barred (General Obligations Law, § 5-701). Subdivision 1 of the statute does not bar the claim because the alleged agreement was "By its terms", even if not as a practical matter, performable within a year. Since, however, arranging, directly or indirectly, for defendant to negotiate with Saudi officials and to effect the Saudi contract is "negotiating * * * a business opportunity" within the meaning of subdivision 10, the claim is barred.

Some time in 1961 plaintiff, Benjamin H. Freedman, met in New York City with David Fulton, an officer of defendant Chemical Construction Corporation. Both Freedman and the corporation do business in New York, Freedman, a self-described retired industrialist, allegedly arranged the meeting to interest Chemical in constructing in Saudi Arabia a plant that would convert flared off natural gas into fertilizer. According to Freedman, after a series of meetings with Fulton in New York, Freedman and his Syrian associate, Issa Nakhleh, negotiated with Saudi officials at Chemical's request. Freedman contends that as a result of these negotiations Chemical was removed from the Arab blacklist and, in December, 1966, awarded the sought-after contract. The plant is said to have been completed in 1970. Intraoffice memoranda prepared by Fulton and correspondence between Chemical and Saudi officials included in the record supply at least some evidence of the alleged events.

At the heart of the case is Freedman's assertion, denied by Chemical, that upon completion of the proposed plant he was to be paid a 5% Fee, or $2.05 million, for his services. No one disputes that there was no writing of any kind to evidence the agreement.

Precisely what Freedman did on Chemical's behalf, other than approaching Chemical and interesting Nakhleh in the endeavor, is unclear. Freedman admitted in his examination before trial that he did not visit Saudi Arabia until 1973, at which point the plant was already operating. Although there is a general statement in his opposing affidavit that he had written letters to Saudi Arabian officials, and that he had forwarded Chemical's proposal to a member of the Saudi royal family, his testimony at the examination before trial is contradictory. The complaint supplies no additional information. Any negotiating in Saudi Arabia was apparently done by Nakhleh, a Syrian lawyer who traveled in the Middle East.

This action followed Chemical's refusal to honor the claimed fee agreement. Chemical, raising the Statute of Frauds, moved for summary judgment. Freedman, seeking to avoid the statutory bar, alleges that the purported oral agreement included an understanding that Saudi law would apply. Saudi law, presumably, has no equivalent writing requirement.

It is elementary that conclusory assertions will not defeat summary judgment. The opponent of a properly made summary judgment motion must present evidentiary facts sufficient to raise a triable issue of fact (e. g., Shaw v. Time-Life Records, 38 N.Y.2d 201, 207, 379 N.Y.S.2d 390, 395, 341 N.E.2d 817, 820; Mallad Constr. Corp. v. County Fed. Sav. & Loan Assn., 32 N.Y.2d 285, 290, 344 N.Y.S.2d 925, 929, 298 N.E.2d 96, 99; 4 Weinstein-Korn-Miller, N.Y.Civ.Prac., par. 3212.12, p. 32-173).

Supported by nothing in Freedman's affidavit in opposition to summary judgment, or in his examination before trial, the contention that the parties had intended, let alone agreed, that Saudi law would govern does not create a triable issue. The one vague reference to Saudi law in Freedman's examination before trial related only to a purported agreement between Nakhleh and Chemical, an agreement with which Freedman, again in the examination before trial, emphatically disavowed any "connection". For the same reason, it is of little persuasive value that in a separate action for another 5% Fee brought by Nakhleh in Federal court a triable issue was held to exist (Nakhleh v. Chemical Constr. Corp., D.C., 359 F.Supp. 357, 359). Summary judgment is thus a proper remedy, assuming, of course, that the New York Statute of Frauds applies. ^*

Turning, then, to section 5-701 of the General Obligations Law, the relevant Statute of Frauds, Chemical relies on subdivisions 1 and 10 to bar the claim.

Subdivision 1 renders unenforceable an oral agreement which "(b)y its terms is not to be performed within one year from the making thereof". True, as Chemical asserts, it was unlikely that Freedman's efforts to obtain the construction contract and Chemical's payment, due only upon completion of the plant, would occur within one year. In fact, Freedman admits it took over three years for his own performance and another six until the plant was built. It matters not, however, that it was unlikely or improbable that a $41 million plant would be constructed within one year. The critical test, instead, is whether "by its terms" the agreement is not to be performed within a year. (North Shore Bottling Co. v. Schmidt & Sons, 22 N.Y.2d 171, 175-176, 292 N.Y.S.2d 86, 88-89, 239 N.E.2d 189, 190-91; Nat. Nal. Serv. Stas. v. Wolf, 304 N.Y. 332, 335, 107 N.E.2d 473, 474.) Since neither party has contended that the alleged agreement contained any provision which directly or indirectly regulated the time for performance, the agreement is not within the bar of subdivision 1.

A writing is also required, under subdivision 10 of the statute, if the agreement "(i)s a contract to pay compensation for services rendered in negotiating a loan, or in negotiating the purchase, sale, exchange, renting or leasing of any real estate or interest therein, or of a business opportunity, business, its good will, inventory, fixtures or an interest therein, including a majority of the voting stock interest in a corporation and including the creating of a partnership interest. '...