Ozdemir v. Caithness Corp.

• Decision Date: 04 June 2001
• Citation: 285 AD2d 961,728 N.Y.S.2d 824
• Parties: (A.D. 3 Dept. 2001) PHILIP OZDEMIR, Respondent, v CAITHNESS CORPORATION, Appellant. 89242 : THIRD JUDICIAL DEPARTMENT Calendar Date:
• Court: New York Supreme Court — Appellate Division

Page 824

728 N.Y.S.2d 824 (A.D. 3 Dept. 2001)

PHILIP OZDEMIR, Respondent, v CAITHNESS CORPORATION, Appellant.

89242

SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION: THIRD JUDICIAL DEPARTMENT

Calendar Date: June 4, 2001

Decided and Entered: July 26, 2001

Coughlin & Gerhart L.L.P. (Paul J. Sweeney of counsel), Binghamton, for appellant.

Hinman, Howard & Kattell L.L.P. (Albert J. Millus Jr. of counsel), Binghamton, for respondent.

Before: Cardona, P.J., Peters, Spain, Carpinello and Lahtinen, JJ.

Lahtinen, J.

Appeal from an order of the Supreme Court (Dowd, J.), entered June 28, 2000 in Chenango County, which denied defendant's motion to dismiss the complaint on the ground, inter alia, of documentary evidence.

Plaintiff, initially as a consultant and later as an independent contractor, has been involved with defendant or its partners since 1983. Plaintiff's relationship with defendant developed because of his knowledge and expertise regarding various aspects of the energy industry. Defendant is a part of the Caithness Group, which, along with other affiliated entities, is involved in the energy industry. As relevant here, part of the assets of the Caithness Group consisted of two natural steam fields located in Dixie Valley and Steamboat Springs, Nevada, which could be used to generate electricity.

On March 14, 1985, plaintiff and defendant entered into an agreement whereby defendant authorized plaintiff "to act to bring to the attention of [defendant] investors suitable for providing drilling or other at-risk funds to [defendant]" and agreed to pay plaintiff a finder's fee on any investment made by an investor "found" and "first introduced" by plaintiff to defendant. Plaintiff commenced this action claiming that defendant breached the March 14, 1985 contract by refusing to pay him a $1.6 million finder's fee. Plaintiff argues that he earned the finder's fee by preparing and having defendant execute six "Standard Offer Contract No. 2" (hereinafter SOC2) contracts which were tendered to Southern California Edison Company (hereinafter SCE). Each SOC2 provided, inter alia, for the delivery of 25 megawatts produced at defendant's steam fields, which SCE would be required to purchase.¹ Prior to the March 14, 1985 contract, defendant had submitted a "Standard Offer Contract No. 4" (hereinafter SOC4) to SCE in 1984. The SOC4 proposed that defendant would supply SCE with 16.5 megawatts of geothermal energy over a 30-year period.

SCE rejected both the 1984 SOC4 and the six 1986 SOC2s claiming that defendant failed to demonstrate that it could transmit any electricity produced at the steam fields to SCE. In November 1985, defendant commenced proceedings before the California Public Utilities Commission (hereinafter CPUC) seeking to compel SCE to accept the 1984 SOC4. In August 1989, defendant filed a supplemental petition seeking similar relief regarding the 1986 SOC2s and the CPUC litigation thereafter involved the propriety of SCE's refusal to accept the 1984 SOC4 and the six 1986 SOC2s.

In 1990, SCE settled with defendant with respect to the CPUC litigation and SCE agreed to enter into seven Purchase Power Agreements (hereinafter PPAs) with defendant. These seven PPAs cancelled and replaced all previous contracts. The PPAs were different from the 1984 SOC4 and the six 1986 SOC2s in that the location requirement was flexible and the megawatts that were to be provided to SCE were modified. In 1992, SCE terminated the PPAs based upon defendant's failure to demonstrate the development of necessary transmission arrangements by a set deadline.

In June 1995, a buyout agreement was entered into by SCE and defendant whereby SCE was released from its long-term obligations to purchase power from defendant pursuant to the PPAs in exchange for $82 million payable to defendant. It is this $82 million buyout, approved by the CPUC in February 1997, which provides the basis for plaintiff's claim for a finder's fee. Specifically, plaintiff alleges that he is owed a commission because it was the information he obtained relative to the viability of the use of the SOC2s and the ability to utilize existing transmission lines owned by an adjacent energy facility that ultimately led to the $82 million settlement reached by defendant and SCE. Defendant did not answer the complaint, but instead moved pursuant to CPLR 3211 (a) (1) and (5) for dismissal of the action. Supreme Court denied defendant's motion to dismiss and defendant now appeals.

Defendant contends that Supreme Court erred in denying its motion to dismiss because the documentary evidence submitted in support of the motion conclusively established that plaintiff failed to satisfy any of the conditions precedent contained in the agreement. Plaintiff counters that the court properly denied defendant's motion because the terms of the March 14, 1985 agreement were ambiguous, raising questions of fact which would preclude the granting of a motion for accelerated judgment.

The scope of review applicable to a motion to dismiss pursuant to CPLR 3211 is limited (see, Cron v Hargro Fabrics, 91 N.Y.2d 362, 366). When reviewing such a motion, a court must liberally construe the pleadings...