Genesco Entertainment, A Div. of Lymutt v. Koch

• Decision Date: 17 August 1984
• Docket Number: No. 83 Civ. 1977.,83 Civ. 1977.
• Citation: 593 F. Supp. 743
• Parties: GENESCO ENTERTAINMENT, A DIVISION OF LYMUTT INDUSTRIES, INC., Plaintiff, v. Edward KOCH, the City of New York, the Department of Parks and Recreation of the City of New York, New York National League Baseball Club, and Ticketron, a Division of Control Data Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

593 F. Supp. 743

GENESCO ENTERTAINMENT, A DIVISION OF LYMUTT INDUSTRIES, INC., Plaintiff, v. Edward KOCH, the City of New York, the Department of Parks and Recreation of the City of New York, New York National League Baseball Club, and Ticketron, a Division of Control Data Corporation, Defendants.

No. 83 Civ. 1977.

United States District Court, S.D. New York.

August 17, 1984.

COPYRIGHT MATERIAL OMITTED

Giamboi, Reiss & Squitieri, New York City, for plaintiff; Sigmund Geronimo, of counsel.

Frederick A.O. Schwarz, Jr., Corp. Counsel, New York City, for Municipal defendants; Christopher R. Gette, Asst. Corp. Counsel, New York City, of counsel.

Conway, Farrell, Maloney, Stern, O'Conor & Duignan, New York City, for defendant Ticketron; Michael E. Curan, New York City, of counsel.

OPINION

EDWARD WEINFELD, District Judge.

Plaintiff, a concert promoter, sought to lease Shea Stadium, New York City, for the production of a country and western music concert on August 22, 1981. After extensive negotiations, the relationship between the City negotiators and plaintiff's representatives broke down a few days before August 22 and the concert was cancelled. Thereupon, plaintiff commenced this action seeking damages for the cancellation, asserting various claims against combinations of defendants, including Edward R. Koch, the Mayor of the City of New York ("Mayor"), the City of New York ("City"), the Department of Parks and Recreation of the City of New York ("Department"), and Ticketron, a division of Control Data Corporation ("Ticketron").

SUMMARY OF THE CLAIMS

Plaintiff's first cause of action against the City and the Department (collectively "municipal defendants") and the Mayor alleges that the plaintiff entered into an oral contract with the municipal defendants whereby plaintiff would pay the City and the Department $40,000 and the New York National League Baseball Club ("the Mets")¹ $35,000 for the use of Shea Stadium for a one-day concert on August 22, 1981; that this oral contract was amended twice, first on August 18, 1981, when the price was increased to an additional $35,000 for the City and an additional $40,000 for the Mets, and again on August 19, when the municipal defendants stated that the aforesaid $75,000 would not suffice and that $121,000 was required. On August 20 the municipal defendants refused to accept the amended and agreed upon $121,000, demanding instead $131,000 for the City and the Department and an additional $50,000 for the Mets; that by their refusal to accept $121,000 and instead demanding the $131,000 for the City and the Department, the defendants breached an oral agreement for the use of Shea Stadium, causing damages of $10,500,000.

The second cause of action names only the Mayor as a defendant and alleges that the demands for the increased fees referred to in the first cause of action were made with his consent, and that he ratified and approved the acts constituting the alleged breach of the oral agreement.

The third cause of action alleges that the Mayor, the municipal defendants and Ticketron committed deceptive acts and trade practices in violation of the New York General Business Law, section 349.

The fourth claim charges that the Mayor and the municipal defendants, through their conduct and representations, sought to convey to the plaintiff the impression that a contract was in effect for plaintiff's use of Shea Stadium on August 22, 1981; that plaintiff relied on such conduct and representations to its detriment; and that thereby an "estoppel in favor of the plaintiff" was created.

Plaintiff's fifth claim alleges that the municipal defendants acted under color of state law in revoking the contract between plaintiff and the defendants, thereby depriving plaintiff of property without due process of law in violation of 42 U.S.C., section 1983.

Koch, the City and the Department move for summary judgment on each of the causes of action alleged against them. The motion is based upon affidavits of various participants in the negotiations, extensive pre-trial discovery of such persons and a statement by the movants pursuant to Local Rule 3(g). Initially it is noted that the plaintiff has failed to controvert the statements in the defendants' 3(g) notice as required by the Rule.

In considering a motion under Rule 56, this Court "cannot try issues of fact but can only determine whether there are issues of fact to be tried."² Our Court of Appeals has cautioned that Rule 56 should be applied "rigidly" and has recognized that it has at times been applied with "some timidity" to avoid substituting trial by affidavit for trial by jury.³ However, when properly applied, Rule 56 provides a "valuable tool for piercing conclusory allegations and disposing of unsupportable claims prior to trial."⁴ The moving party bears the burden of establishing the absence of any material issue of fact.⁵ The Court must resolve "all ambiguities and draw all reasonable inferences in favor of the party against whom summary judgment is sought."⁶ Nevertheless, to defeat a motion for summary judgment, the opposing party may not rest on conclusory allegations or denials, but must set forth, by competent evidence, specific facts showing that there is a genuine issue of material fact.⁷ Applying these principles to the present case, the Court is persuaded that the City, the Department and the Mayor have borne their burden with respect to all causes of action and are entitled to summary judgment.

BACKGROUND

Plaintiff's allegations describe a series of negotiations for the use of Shea Stadium carried on by Genesco principals, Anthony Scotti and Gene Richards, and Wendell Levister, Deputy Commissioner of the Department of Parks and Recreation. Also present or participating in the negotiations were Rudolph Taylor, General Counsel of the Department of Parks and Recreation, and Diana Ortiz, Deputy General Counsel for the Department of Parks and Recreation. Plaintiff claims that "sometime prior to the 8th day of August, 1981,"⁸ plaintiff entered into an oral contract with the City and the Department for the presentation of the concert at Shea Stadium on August 22. While Genesco's principals have not consistently described their understanding of each of the terms of the oral contract,⁹ they most consistently set a total fee for the use of Shea Stadium at $75,000. Plaintiff asserts that two or three days prior to the actual date of the concert, the City and the Department breached the oral contract by demanding and then failing to accept a $121,000 fee, by subsequently demanding a $181,000 fee, and finally by publicly announcing the cancellation of the concert. Plaintiff does not dispute the fact that no written agreement was ever consummated, although it claims that City officers represented to it that a duly executed written contract would be forthcoming as a matter of course.

DISCUSSION

Breach of Contract Claim

The municipal defendants first argue that they are entitled to summary judgment on the breach of contract claim as a matter of law because the alleged oral contract is invalid and unenforceable, since it fails to conform to the statutory prerequisites required of contracts for the lease of Shea Stadium. The movants here emphasize that the alleged contract was not in writing; that it had never been agreed to by the authorized officer of the Department; and that it had never been approved as to form by the City Corporation Counsel. Second, defendants argue that the plaintiff has admitted that the parties did not intend to be bound until the execution of a written contract, pointing to portions of the deposition of Gene Richards, one of the partners of Genesco.¹⁰ The Court does not reach the defendants' second argument because the first is dispositive of plaintiff's breach of contract claim.

When acting in its corporate capacity, a municipality is held as accountable for its obligations as are individuals and corporations in the conduct of business.¹¹ Unlike individuals and private corporations, however, a municipality's power to contract is statutorily restricted for the benefit of the public.¹² Statutory restrictions on a municipal corporation's power to contract protect the public from the corrupt or ill-considered actions of municipal officials.¹³ To allow recovery under a contract which contravenes such restrictions gives vitality to an illegal act and grants the municipality power which it does not possess "to waive or disregard requirements which have been properly determined to be in the interest of the whole."¹⁴

Hence, while a municipal corporation must honor its authorized commitments, it is not bound to contracts entered into by employees outside their authority.¹⁵

It is established law in New York that where there is a lack of authority on the part of agents of a municipal corporation to create a liability, except by compliance with well-established regulations, no liability can result unless the prescribed procedure is complied with and followed.¹⁶

None of the parties with whom plaintiff claims to have negotiated, Deputy Commissioner Levister,¹⁷ General Counsel Taylor, or Deputy General Counsel Ortiz, were statutorily authorized to enter into an agreement for the lease of Shea Stadium. Gordon Davis, the Commissioner of the Parks and Recreation Department, is the only city official authorized under the Administrative Code to enter into such a contract. The New York City Charter grants the Commissioner power to enter into contracts for recreational purposes subject to the approval of the Mayor.¹⁸ With respect to the use of Shea Stadium, the Commissioner, alone, may enter into a binding contract. Section 532-15.0(d) of the New York Administrative Code provides for the rental of Shea Stadium.¹⁹ The provision states:

Notwithstanding the foregoing provisions ... or the provisions of any other law, general, special or local, the commissioner, acting in behalf of the city, is hereby

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