Richardson & Lucas, Inc. v. New York Athletic Club of the City of New York

• Decision Date: 24 April 2003
• Citation: 758 N.Y.S.2d 321,304 A.D.2d 462
• Parties: RICHARDSON & LUCAS, INC., Appellant,<BR>v.<BR>NEW YORK ATHLETIC CLUB OF THE CITY OF NEW YORK, Respondent.
• Court: New York Supreme Court — Appellate Division

304 A.D.2d 462

758 N.Y.S.2d 321

RICHARDSON & LUCAS, INC., Appellant,

v.NEW YORK ATHLETIC CLUB OF THE CITY OF NEW YORK, Respondent.

Decided April 24, 2003.

Concur — Buckley, P.J., Nardelli, Andrias, Ellerin and Friedman, JJ.

Plaintiff, a contractor specializing in roofing and facade work, entered into a contract with defendant which included a standard provision requiring that all modifications be in writing and signed by the parties. One month later, defendant wrote to plaintiff by letter dated July 28, 1998 and terminated the contract "for owner's convenience."

The original contract entitled plaintiff to recover for work executed, certain proven losses and reasonable profit if defendant terminated for owner's convenience. Subsequently, when plaintiff submitted schedules to defendant for payment of costs and expenses, defendant refused to pay any sums based on future profits or overhead.

Defendant alleged that the July 28 letter was used as a means to implement the parties' oral agreement, reached in a meeting the day before, that defendant would not terminate for cause and that plaintiff would waive any future expenses or profits. Defendant thus claimed that the oral agreement of July 27 modified the express terms of the original contract.

In this action for breach of a construction contract, the IAS court granted defendant's motion for summary judgment, holding that defendant had issued a notice of termination without cause, that this was consistent with the alleged oral modification, that the notice was unequivocally referable to the oral agreement and that the oral agreement modified the express terms of the original contract. Since the parties' written contract provided that it could only be modified by a writing signed by both parties and the oral agreement does not fall within any exception to the statute of frauds, we reverse and remand for further proceedings.

The statute of frauds, General Obligations Law § 15-301 (1), provides that a contract with a written modification clause "cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement * * * is sought." While the IAS court held that the oral agreement was partially performed by defendant's issuance of the written termination notice which was also "unequivocally referable" to the oral agreement, defendant has argued on this appeal that the oral modification is enforceable because parties to a contract generally...