Plymouth Rock Fuel Corp. v. Leucadia, Inc.

• Citation: 100 A.D.2d 842,474 N.Y.S.2d 79
• Parties: PLYMOUTH ROCK FUEL CORP., Appellant-Respondent, v. LEUCADIA, INC., etc., Respondent-Appellant.
• Decision Date: 02 April 1984
• Court: New York Supreme Court Appellate Division

Page 79

474 N.Y.S.2d 79

100 A.D.2d 842

PLYMOUTH ROCK FUEL CORP., Appellant-Respondent, v. LEUCADIA, INC., etc., Respondent-Appellant.

Supreme Court, Appellate Division,

Second Department.

April 2, 1984.

Alfred A. Rosenberg, Brooklyn (Richard L. Koral, Brooklyn, of counsel), for appellant-respondent.

Weil, Gotshal & Manges, New York City (David M. Ledy and Suzanne Israel Tufts, New York City, of counsel), for respondent-appellant.

Before TITONE, J.P., and O'CONNOR, BROWN and EIBER, JJ.

MEMORANDUM BY THE COURT.

In an action to recover damages for breach of contract, plaintiff appeals from so much of an order of the Supreme Court, Kings County, dated August 3, 1982, as denied its motion for summary judgment and defendant cross-appeals from so much of the same order as denied its cross motion for partial summary judgment dismissing the complaint and for a severance of the counterclaims.

Order modified, on the law, by deleting the provision denying that branch of plaintiff's motion which sought summary judgment as to the issue of liability for fuel deliveries and substituting therefor a provision granting that branch of the motion. As so modified, order affirmed, with costs to plaintiff, and matter remitted to the Supreme Court, Kings County, for further proceedings consistent herewith.

Plymouth Rock Fuel Corporation (Plymouth Rock) brought this action against Leucadia, Inc., formerly known as James Talcott, Inc. (Talcott), to recover the principal sum of $18,105.38, allegedly representing the price of heating oil delivered and service repair calls made to three buildings (the buildings) located in New York City and owned and operated by Isaac Silverman (Silverman).

The undisputed facts establish that Talcott was a second mortgagee of the buildings. Harry Scharaga, Plymouth Rock's president, testified at an examination before trial that in January 1975, Silverman's manager told him that an order for fuel would be placed by Silverman and his agents and that although Silverman should be sent the invoices, they would be forwarded to Talcott for payment. Scharaga knew Talcott to be the second mortgagee, and thus agreed to this arrangement.

Talcott paid the bills for nearly three years, but ceased to do so upon sending Plymouth Rock a letter dated December 27, 1977, which indicated in pertinent part that:

"Newmark & Company Real Estate, Inc. has been appointed exclusive management agents for the above listed real estate properties as of December 15, 1977.

"In the past all contracts, work orders, supply invoices, service contracts, etc. requisitioned or ordered by Isaac Silverman's office have been honored and paid for by James Talcott, Inc.

"Effective immediately, all payments for requisitions, purchase orders, etc. on the above mentioned properties will become the responsibility of Newmark & Company and must be authorized by them".

Talcott's mortgage on Silverman's property contains an assignment of rent clause. About 10 years ago, Silverman assigned to Talcott all of the rents and profits derived from the operation of the property, following Silverman's default on a mortgage loan, and all tenants in the buildings have paid rent directly to Talcott. Although Silverman and his employees did the day to day work of managing the building, they were in constant communication with Talcott, and all of their expenditures have been subject to Talcott's approval. Talcott has drawn all checks and...