Universal Eng'g Servs., P.C. v. Indus. Dev. Agency of Mount Vernon, 69254/2019

CourtUnited States State Supreme Court (New York)
Writing for the CourtGretchen Walsh, J.
Citation68 Misc.3d 1225 (A),130 N.Y.S.3d 647 (Table)
Docket Number69254/2019
Decision Date22 September 2020
Parties UNIVERSAL ENGINEERING SERVICES, P.C., Plaintiff, v. INDUSTRIAL DEVELOPMENT AGENCY OF MOUNT VERNON, New York and City of Mount Vernon, New York, Defendants.

68 Misc.3d 1225 (A)
130 N.Y.S.3d 647 (Table)

INDUSTRIAL DEVELOPMENT AGENCY OF MOUNT VERNON, New York and City of Mount Vernon, New York, Defendants.


Supreme Court, Westchester County, New York.

Decided September 22, 2020

PECKAR & ABRAMSON, P.C., By: Kevin O'Connor, Esq. and Douglas A. Franklin, Esq., 1325 Avenue of the Americas, 10th Floor, New York, New York 10019, for Plaintiff.

HARRIS BEACH PLLC, By: Darious P. Chafizadeh, Esq. and Doreen Klein, Esq., 445 Hamilton Avenue, Suite 1206, White Plains, New York 10601, for Defendants.

Gretchen Walsh, J.

The e-filed documents listed in NYSCEF by Documents Numbers 27-48 were read on this motion by Defendants Industrial Development Agency of Mount Vernon, New York (the "MVIDA") and the City of Mount Vernon, New York (the "City," "Mount Vernon," or "Mt. Vernon") (collectively "Defendants") for an Order pursuant to CPLR 3211(a)(7) dismissing the Amended Complaint of Plaintiff Universal Engineering Services, P.C.'s ("Plaintiff" or "Universal"). Plaintiff opposes the motion.


In its Amended Complaint, Plaintiff alleges that it is a professional corporation authorized to do business in New York, MVIDA is a public benefit corporation authorized by the New York State Industrial Development Agency Act (General Municipal Law ["GML"]§§ 850 - 888 ) and GML § 902-c, and Mount Vernon is a municipal corporation of the State of New York (Amended Complaint at ¶¶ 1-3). Plaintiff contends that MVIDA is a "component unit" of the City, which at all pertinent times, was controlled by the City's Mayor (id. at ¶ 4). According to Plaintiff, as reflected in the 2017 audited financial statements of MVIDA, which were reviewed and approved by the City:

The Agency is considered a component unit of the financial reporting entity known as the City of Mount Vernon, New York. Inclusion in the financial reporting entity, City of Mount Vernon, New York (the "City"), is determined based on financial accountability as defined by GASB Statement No. 14, as amended, "The Financial Reporting Entity". Component units are legally separate entities for which the City of Mount Vernon, New York, is financially accountable. The Agency is considered a proprietary fund (id. at ¶ 5).

Plaintiff states that during the period beginning on November 6, 2016 and continuing through July 8, 2019, MVIDA's Chairman, Richard Thomas, was also the City's Mayor (id. at ¶ 6).

Plaintiff alleges that, on or about November 7, 2016, it was contracted by Defendants to "perform oversight and development of quality management systems to meet Mount Vernon's goals for economic growth and opportunity" (the "Agreement") (id. at ¶ 7, Ex. A). Specific items included in Plaintiff's scope of work were to "[m]anage the Building Department" and to "[d]irect the inspection program of buildings under construction and accessory structures with [sic ] the City limits for conformance to required codes and ordinances" (id. ).

Plaintiff further alleges that, on or about November 30, 2016, the Agreement was amended and extended by virtue of an amendment (the "Amended Agreement") (id. at ¶ 8, Ex. B). According to Plaintiff, included in the scope of duties to be performed under the Agreement and the Amended Agreement were to "[a]ssist the [MVIDA] in review of plans and drawings submitted to the agency and/or any department of the City," and to "[s]ubmit to the [MVIDA] and/or any department of [the City] recommendations for objections, conclusions and approval of said plans and drawings, including using the official forms if requested" (id. at ¶ 9).

Plaintiff contends that, pursuant to the Agreements, under general direction from the City's Mayor's Office, and under the supervision and direction of the City's Commissioner of Buildings and the City's Commissioner of Public Works, Plaintiff assisted the Department of Buildings and Department of Public Works to perform the various services set forth therein, providing substantial benefits to the City. Plaintiff further contends that the City, through its Mayor and MVIDA Chairman, and its Building Department, was fully aware of the benefits thus conferred by the work of Plaintiff (id. at ¶ 10).

According to Plaintiff, at all material times, it was an approved Special Inspection and Code Consultation Agency for the City based on relevant experience, sufficient staffing and professional engineering licensure and that this approval was confirmed in a letter from Curtis J. Woods, P.E., the City's Buildings Commissioner to Plaintiff, dated May 18, 2017 (id . at ¶ 11, Ex. C). Plaintiff alleges that, in connection with the services provided under the Agreement and Amended Agreement, Plaintiff was to be compensated in the amount of $150.00 per hour (id. at ¶ 12). Plaintiff contends that: (1) it tendered monthly invoices and reports to MVIDA in compliance with the Agreement and Amended Agreement; (2) the invoices and reports were received by MVIDA and were known to exist by the City; and (3) neither Defendant disputed or rejected any of the invoices or reports issued by Plaintiff (id. at ¶¶ 13-14).

Plaintiff further contends that the monies paid over the years to Plaintiff were included within the audited financial statements of MVIDA, which were reviewed and approved by the City (id. at ¶ 15). It states that the audited financial statement of MVIDA, approved by the City "had this to say about the integral role of consultants such as Plaintiff:"

In 2017, the Mount Vernon Industrial Development Agency (MVIDA) played a critical role in the financial prosperity and health of the city. In a year when the city's budget was starved by political infighting, the Agency provided a harbor for economic stability and growth. Things got so bad that the Mayor had to go to court, and in June of 2017 he obtained an injunction ordering the City Council and Comptroller from "disrupting, obstructing or interfering" with salaries and the provision of municipal services. During the legal wrangling, some departments did not have enough money to operate.

In the case of the Buildings Department, the Agency was able to lend assistance. In its role of promoting and safeguarding the economic wellbeing of Mount Vernon, MVIDA consultants teamed up with the Buildings Department to perform inspections and issue permits. As result of the partnership, Building Department revenues bounced back from $800,000 in 2016 to $1.1 million in 2017. Even more important, clearing the backlog in plan reviews and inspections allowed more than $380 million in capital investment to go forward - $292.7 million in projects approved by the MVIDA and $90 million for 42 Broad Street, a non-MVIDA luxury rental development.

(id. at ¶ 16).

Plaintiff alleges that Defendants continued to request services pursuant to the Agreement and Amended Agreement, and Plaintiff continued to perform them, until early October 2019, when Plaintiff received a letter dated October 4, 2019 from the City's Buildings Commissioner, Kindra C. Dolman, stating, "as of today, October 4th, 2019, the City of Mount Vernon Department of Buildings is canceling Universal Engineering Services (UES), as a consultant" (id. at ¶ 17, Ex. D). Plaintiff argues that "[t]his letter itself acknowledged the obligations of [the City] to pay Plaintiff for its services under the Agreement and Amended Agreement, and the fact that Plaintiff's contracts had been duly and lawfully approved by [the City]" (id. at ¶ 18).

Plaintiff contends that it billed a total of $1,492,468.26 to Defendants between October of 2016 and October of 2019 for services performed as per the terms of the Agreements and that Defendants MVIDA and/or the City paid Plaintiff a total of $849,976.22 for its services between December 2016 and June 2019 (id. at ¶ 19). Plaintiff alleges that, therefore, "[t]here remains a total balance of $642,484 due to Plaintiff, in accordance with its Agreements and which is the reasonable value of the work it performed and for which it has not been paid" (id. at ¶ 20). Plaintiff further alleges that, despite due demand by Plaintiff for payment on such invoices, Defendants have failed and refused to pay Plaintiff for services performed in accordance with the terms and conditions of the Agreement and Amended Agreement, and that, to date, the total outstanding balance due and owing to Plaintiff by Defendants is $642,484.04, excluding statutory interest.

Plaintiff asserts seven causes of action (the first four against MVIDA, and the next three against the City). For its First Cause of Action for breach of contract against MVIDA, Plaintiff alleges that it "has duly performed all of the services required to be performed by it under the Agreement and Amended Agreement with Defendant, [MVIDA]" but that, "[d]espite due demand, Defendant [MVIDA] has failed and refused to make payment to Plaintiff for the balance due and owing for services rendered by Plaintiff" (id. at ¶¶ 23-27). In its Second Cause of Action, Plaintiff alleges that MVIDA was unjustly enriched in that "Plaintiff furnished services to Defendant under circumstances in which Plaintiff reasonably expected payment, those services were accepted by Defendant, and a benefit was therefore conferred upon Defendant" and that, "[a]s a result of Defendant's failure and refusal to make payment to Plaintiff for the balance due and owing on the Agreement and Amended Agreement,...

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