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Elizabeth Ann Blackburn, Claimant, v. Nick Rauscher d/b/a 3 Zero Creative, Defendant. (2023)

City Court, New York,

Elizabeth Ann Blackburn, Claimant, v. Nick Rauscher d/b/a 3 Zero Creative, Defendant.

Index No. SC-000205-22/LF

Decided: January 19, 2023

Elizabeth Ann Blackburn, Claimant, pro se Nick Rauscher, Defendant, pro se

Claimant filed this petition on October 24, 2022, seeking $5,000 from Defendant because he "[d]id not finish full contract / actual completed projects were late and unprofessional / damaging posts." The matter proceeding to trial on January 12, 2022, on which date the Defendant filed a counterclaim "[f]or services rendered beyond and outside scope of original estimate of projects." On consent of the parties, the Court conducted the trial on the same day.

Claimant testified that she made various partial payments totaling $13,805 to Defendant towards a contract, which as modified, called for $17,250 of services. The contract called for $300 in "rebranding" which the Claimant admits was fully performed by the Defendant. The contract called for $3,000 for label designs. The Claimant conceded the Defendant put $2,000 of work into their production. The Defendant also admitted the labels were only three quarters finished. The contract called for email marketing valued at $250 per month plus a $1,000 set up fee. It is undisputed that the Defendant sent only two emails. Claimant values the services rendered at $500. The contract valued blogging at $3,000 annually. The Claimant testified that the Defendant completed only two of the 18 contracted blog posts and assigned a value of $200 for the completed work. The contract called for Facebook advertising at $300 per month to start with $100 per campaign. Claimant testified that the Defendant only completed one- and one-half months of ads with a value of services rendered of $450. The contract called for creation of an email/mailing list valued at $250. Claimant testified that the list was completed. The contract also called for creation of a trifold branding brochure valued at $1,500. The Claimant testified that the brochure was not completed. The Claimant conflated the email list and trifold branding into a single category of "Business to Business Strategy" valued at $1,750 with services rendered valued at $750 which implies that she valued the work performed on the trifold brochure at $500. The Claimant also testified that the Defendant performed extra agreed services outside the scope of the contract valued at $700. Thus, Claimant is seeking the return of her payments totaling $13,805 less the value of services rendered of $4,900 for a return of $8,905 subject to the jurisdictional limit of this Court.

The Defendant essentially testified that the Claimant did not take into consideration the value of the time his company spent on research and development. Additionally, the Defendant testified that he spent additional time outside the scope of the contract and should be entitled to payment for those non-contracted services. The Defendant submitted a very detailed spreadsheet to that effect.

The court's duty in a small claims case is to do substantial justice between the parties according to the rules of substantive law (UCCA § 1804). "[I]n this state the sanctity of contracts in this respect at least, has been steadily maintained, and no encouragement has ever been given to that loose and dangerous doctrine which allows a person to violate his most solemn engagements and then to draw the injured party into a controversy concerning the amount and value of the benefits received. ... To hold a different doctrine would be simply to make another contract, and would be giving to parties an encouragement to violate their engagements, which the just policy of the law does not permit" (Knobel v Manuche, 137 Misc 2d 320, 324 [Sup Ct, NY County 1987], affd, 146 AD2d 528, [1st Dept 1989], citing Smith v Brady, 17 NY 173 [1858]). This means that a contractor who materially breaches a contract may not be entitled to any compensation for his partial performance.

It is well settled in New York that "[t]he doctrine of substantial performance has no application, where there is an intentional, deliberate, and willful departure from the contract. Substantial performance is performance, the deviations permitted being minor, unimportant, inadvertent, and unintentional" (Cramer v. Esswein, 220 A.D. 10, 11 [2nd Dept, 1927]; see also Novair Mech. Corp. v. Universal Mgmt. & Contracting Corp., 81 AD3d 909 [2nd Dept, 2011]).

If the Defendant were allowed to keep the benefits of the hours of labor he put into this job, then he would not suffer any loss from breaching the contract. Such an outcome would encourage contractors to leave their contracted work unfinished whenever a better opportunity comes along, knowing that they would be fully compensated for the work that they have performed. In short, it would undermine the sanctity of a contract.

The court will not allow the Defendant to draw the Claimant and the court into a controversy concerning the amount and value of the benefits received when the value of those services left her with an incomplete marketing and rebranding campaign. This Court has considered the testimony of the parties, observed their demeanor in court, and assessed their relative credibility. This Court credits the testimony of the Claimant with a couple of exceptions. The contract by its terms provided for a $1,000 initial setup fee for email marketing and finds that the Defendant provided $1,500 in services rather than the $500 as maintained by the Claimant. Also, the pro-rata share of the blogs should be $166.66 per blog which is the sum of $3,000 divided by 18 blogs. Accordingly, the proper value of services rendered should be valued at $333.32 for the two posted blogs versus $200. In any event, these points are inconsequential because after finding the Defendant properly performed $5,333.32 in services rendered, when subtracted from the total payment of $13,805 leaves an overpayment balance of $8,471. 68 — which is still over the $5,000 jurisdictional limit of this court.

With respect to the Defendant's counterclaim, he indicated on the counterclaim itself that it is for "services rendered beyond and outside the scope of original estimate of projects." The law in New York is well settled that "[w]here, as here, there is an existing contract between the parties covering the dispute in issue there can be no recovery in quantum meruit" (Tako Holdings, Inc. v. Tillman, 272 AD2d 394, 396 [2nd Dept 2000]).

The facts before the court do not establish an agreement by the Claimant to pay for the additional services. Additionally, the Court is not inclined to award the Defendant credit for additional services rendered under a theory of quantum meruit beyond the $5,333.32 discussed above because the Court finds that he did not materially perform under the contract.

Accordingly, the Defendant's counterclaim should be dismissed.

Therefore, it is hereby ordered that judgment be entered in favor of Claimant against Defendant in the amount of $5,000 plus costs. Additionally, it is hereby ordered that the Defendant's counterclaim is dismissed.

This constitutes the decision and order of the court.




DATED: January 19, 2023


Joshua Bannister, J.

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Elizabeth Ann Blackburn, Claimant, v. Nick Rauscher d/b/a 3 Zero Creative, Defendant. (2023)

Docket No: Index No. SC-000205-22/LF

Decided: January 19, 2023

Court: City Court, New York,

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