Looks Great Servs., Inc. v. Nat'l Grid Elec. Servs., LLC
| Decision Date | 22 April 2015 |
| Docket Number | INDEX NO. 601012/2014 |
| Court | New York Supreme Court |
| Parties | LOOKS GREAT SERVICES, INC., Plaintiff, v. NATIONAL GRID ELECTRIC SERVICES, LLC and LONG ISLAND POWER AUTHORITY, Defendants. |
ORIGINAL
Present: HON. TIMOTHY S. DRISCOLL Justice Supreme Court
Papers Read on this Motion:
This matter is before the court on the motion filed by Defendant Long Island Power Authority ("LIPA") on November 25, 2014 and submitted on March 27, 2015. For the reasons set forth below, the Court 1) grants the motion to the extent that the Court a) dismisses the fourth cause of action in the Amended Complaint alleging bad faith breach of contract; and b) dismisses Plaintiff's claims for consequential damages, punitive damages and attorney's fees; and 2) denies LIPA's motion to dismiss the first cause of action in the Amended Complaint alleging account stated.
LIPA moves, pursuant to CPLR § 3211(a)(7), for an Order dismissing, with prejudice, the first and fourth causes of action and demand for consequential damages, punitive damages and attorney's fees contained in the Amended Complaint of Plaintiff Looks Great Services, Inc. ("Plaintiff").
Plaintiff opposes the motion.
The parties' history is set forth in detail in a prior Order ("Prior Order") of the Court dated February 24, 2015 in which the Court directed that the motion would be the subject of oral argument and/or a conference in aid of disposition. The Court conducted that conference on March 27, 2015 and the motion was submitted on that date.
As noted in the Prior Order, the Amended Complaint (Ex. B to Versichelli Aff. in Supp.) alleges as follows:
Plaintiff provides a variety of services, including disaster relief cleanup services, such as debris removal and disposal. In this action, Plaintiff seeks payment from Defendants National Grid Electric Services, LLC ("National Grid") and LIPA for emergency debris removal services completed in the aftermath of Superstorm Sandy.
Plaintiff alleges that in 2011, at a time when no emergency was present, Nassau County, with the assistance of Plaintiff, developed an emergency management plan. As part of its emergency preparedness, Nassau County requested competitive proposals for emergency management, debris removal and debris disposal services. As a result of this competition, Nassau County awarded Looks Great a pre-event Professional Services Agreement ("Agreement") (Ex. 1 to Am. Compl.) which was executed by the Nassau County Department of Public Works ("DPW") on August 26, 2011.
Pursuant to the Agreement, in return for performing debris removal services, Looks Great was to receive payment within ten (10) days of submitting an invoice for completed services at contract rates listed in Exhibit A to the Agreement ("Exhibit A"). For services within Plaintiff's scope of work, but not covered by the fee schedule in Exhibit A, Looks Great would perform the work according to Supplemental Agreements or on a negotiated lump sump or not-to-exceed amount. Invoices submitted by Looks Great to Defendants for services rendered also stated that payment was to be made "net 10" (Amended Complaint at ¶ 14), meaning ten (10) days from the date of the invoice.
As a result of damage caused by Superstorm Sandy ("Storm") in late October 2012, the DPW activated the Agreement and began directing Looks Great to begin disaster relief services. The Long Island Railroad, Town of Huntington, City of Long Beach, Town of Hempstead, Freeport Electric and Garden City also requested services under the Agreement and paid Plaintiff at the rates provided in the Agreement for all services provided. None of these entities ever disputed Looks Great's rates. In a press release dated May 7, 2013, the Nassau County Comptroller's Office "touted" (Am. Compl. at ¶ 17) the cost savings realized from services provided under the Agreement, including the fact that Nassau County had paid up to 32% less than New York City for the Storm debris removal.
Plaintiff alleges that Defendants, however, did not have emergency debris removal contracts in place and, therefore, any trucks available to Defendants were idle because Defendants had failed to obtain a temporary debris disposal site. Defendants contacted Plaintiff on November 17, 2012 seeking emergency debris removal services. That same day, representatives of Plaintiff met with representatives of Defendants' management teams and advised Defendants that Plaintiff was prepared to perform the work needed at the same rates ("Standard Rates") that it charged other customers in Nassau and Suffolk Counties pursuant to the Agreement. At Defendants' request, Looks Great provided Defendants with a copy of the Agreement and the Standard Rates. Upon information and belief, Defendants confirmed with representatives of the Federal Emergency Management Agency ("FEMA") that FEMA had previously approved and reimbursed applicants at the Standard Rates in response to Hurricane Irene the prior year. Plaintiff alleges that during the November 17, 2012 meeting, Defendants clearly agreed to the terms of the Agreement and to pay for the emergency services provided by Looks Great at its Standard Rates.
Plaintiff alleges that it documented the services that it performed at Defendants' direction in daily work tickets, all of which were signed and approved by field representatives of National Grid at or near the time that the services were rendered, and provides a sample of these daily work tickets (Ex. 3 to Am. Compl.). Plaintiff also periodically submitted detailed invoices ("Invoices") to National Grid that were prepared using and identifying each daily work ticket, and the services were billed at Standard Rates, which Defendants accepted without complaint.The Invoices provided by Looks Great from November 17, 2012 through December 8, 2012 were submitted to National Grid on December 12, 2012 (Ex. 4 to Am. Compl.) and National Grid did not object to the Invoices or Standard Rates. Accordingly, Looks Great continued its work, in reasonable reliance on Defendants' failure to object to the Invoices and Defendants' prior commitment to pay for the services provided at the Standard Rates, and continued to periodically submit Invoices requesting payment for services performed.
Plaintiff alleges that it successfully completed all services requested by Defendants on or about March 21, 2013, and all of the Invoices that had been periodically submitted while the work was being performed were submitted as a group to National Grid again on April 1, 2013 (see, e.g., Ex. 4 to Am. Compl. at p. 2). Defendants accepted and held all of the Invoices without reservation, and never notified Plaintiff of any deficiencies in its work. Plaintiff did not receive payment and, accordingly, sent a letter to National Grid dated May 22, 2013 demanding payment (Ex. 5 to Am. Compl.). National Grid responded by letter dated June 17, 2013 (Ex. 6 to Am. Compl.) in which it acknowledged receipt of some of the Invoices in February 2013, and acknowledged that there was a balance due to Plaintiff. National Grid also, for the first time, 1) disputed the Standard Rates and advised Plaintiff of "a lengthy and cumbersome procedure that Looks Great putatively was to follow to obtain the late payments" (Am. Compl. at ¶ 35); and 2) advised Plaintiff that it would have to enter into an emergency restoration services agreement with National Grid, although National Grid never provided Plaintiff with any such agreement.
Plaintiff met with National Grid in an effort to resolve their disputes, at which time National Grid made partial payments. After Defendants made their final partial payment on September 25, 2013, a balance remained in the total principal amount of $844,740.75. By letter dated October 18, 2013 (Ex. 7 to Am. Compl.), Plaintiff demanded payment of the balance. Plaintiff also provided additional information substantiating the reasonableness of the Standard Rates and invited Defendants to contact Nassau County to confirm that it paid the Standard Rates. Plaintiff also alleges that the governmental entities to which Plaintiff provided services were reimbursed by FEMA at the Standard Rates and submits that is evidence of their reasonableness.
Defendants have advised Plaintiff that the emergency services rates billed by Looks Great for three specific pieces of equipment were too high. Plaintiff alleges that the principal amountwithheld by Defendants is not directly and solely related to the rates charged for the services provided by this equipment, and that one or more of the unpaid Invoices do not contain charges for any of this equipment. Looks Great has asked Defendants to provide support for their position as to the rates that should have been charged, which Defendants have failed to do. Looks Great sent additional demand letters in November and December of 2013 (Exs. 8-11 to Am. Compl.). Plaintiff alleges that, as a result of Defendants' improper withholding of payment, Plaintiff suffered incidental and consequential damages including, but not limited to, foregone interest and the need to finance ongoing services provided by Plaintiff from its own working capital line of credit, which damages were allegedly objectively foreseeable.
The instant motion is addressed to the first and fourth causes of action in the Amended Complaint, and to Plaintiff's demand for...
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