EVENTS COMPANY LLC v. MATURANA RAPT LLC (2021)

This action arises out of a large themed corporate party for which plaintiff, J Events Company, hired defendants, chef Andrew Maturana and his catering company Rapt LLC. Plaintiff, dissatisfied with defendants’ work (and billing) on the party, brought this action, asserting claims sounding in contract, deceptive practices, and fraud. Defendants counterclaimed on breach-of-contract and promissory-estoppel grounds, and also for alleged defamation.

In motion sequence 006, plaintiff moves for summary judgment dismissing defendants’ contract-related counterclaims, and for sanctions. In motion sequence 007, plaintiff moves for summary judgment in its favor on plaintiff's own claims. The two motions are consolidated here for disposition. Motion 006 is granted only to the extent of dismissing defendants’ promissory-counterclaim, and otherwise denied. Motion 007 is denied in its entirety.

BACKGROUND

Plaintiff is an event-production company that hosts a variety of events, including celebrity parties. Rapt is a catering company that offers tailored menus for these events. Maturana owns Rapt. Plaintiff initially contacted defendants in October 2017 for work on a celebrity event scheduled for December 19, 2017. Plaintiff and defendants negotiated the number of chefs, menu specifics, and final pricing. A November 5, 2017 email from Maturana to plaintiff laid out the culinary dishes that defendants would provide and how many of their chefs would attend. Maturana sent an initial pricing estimate of $46,141 to plaintiff. (See NYSCEF No. 93 at 1.) Negotiations continued, and the parties eventually agreed on a price of $42,921.

Plaintiff contends that these emails and the accompanying invoice (the “First Invoice”)—dated November 5 and accepted on November 10—included edible balloons as part of the event's menu. (See NYSCEF No. 87 at 2; NYSCEF No. 92.) Maturana's affirmation, by contrast, states that plaintiff reached out to him on November 18 to add the balloons to the menu. (See NYSCEF No. 116 at ¶ 15.) To provide the edible balloons for the event, defendants contracted with Mike Bagale, a chef who specializes in this type of arrangement. In an email sent to plaintiff on November 18, 2017, defendants indicated—based on Bagale's estimate—that the 400 edible balloons requested would cost them another $10,000, totaling $13,500. Defendants sent plaintiff an additional invoice (the “Final Invoice”) reflecting these changes. Defendant alleges that plaintiff accepted the increased budget at an in-person walkthrough on November 26. (NYSCEF No. 170.)

On December 11, plaintiff texted Maturana as follows: the client “isn't going to go for $13,500. I clearly looked at the wrong number ․ as I just saw the additional cost this morning․ I thought it was going to be $1350.” (NYSCEF No. 124.) Plaintiff decided that $13,500 for edible balloons was too expensive and told defendants to cancel the balloon deal. With only one week before the event, defendants informed plaintiff they had already made payments toward the balloons and that it was too late to cancel the balloons.

On December 18, the night before the event, plaintiff sent Maturana an email expressing its desire to continue with the preparations minus the balloons. (NYSCEF No. 154 at 3.) Later that same night, Maturana reached out to plaintiff's client and received a text message stating, “Good to go on the balloons.” (NYSCEF No. 178.) At the event, defendants displayed the balloons.

Plaintiff has also expressed dissatisfaction with how defendants put on the event. According to plaintiffs, defendants hired inexperienced non-chef staffers, who disrupted a pre-arranged activities schedule and frustrated interactive dishes; they offered guests substandard food prepared by fast-food chains; they promoted, advertised, and took credit for the event, both with plaintiff's client and on social media, contravening the parties’ arrangement; and they intentionally interfered with plaintiff's relationship with its client.

Based on its displeasure with defendants’ conduct, plaintiff has brought this action. Plaintiff asserts six claims: (1) breach of contract, for performance-related issues stemming from defendants’ outsourcing of the catered food and mismanagement of the event; (2) breach of contractual warranties, for serving low-quality food not suitable for the event; (3) fraudulent inducement, for defendants misrepresenting the services it offered to secure the contract; (4) intentional misrepresentation, for defendants indicating it would serve the specifically-prepared food itself and for defendants’ statements it would not advertise itself at the event; (5) economic duress, for wrongfully threatening to withdraw from the event in order to secure the additional money for the balloons; and (6) deceptive trade practices, for many of the above allegations.

Defendants answered and counterclaimed for $23,200, based on alternative breach-of-contract and promissory estoppel theories. Defendants seek $10,000 for the balloons and $13,200 for two alleged late payments for defendants’ services of $6,600 each.

DISCUSSION

On motion sequence 006, plaintiff moves for summary-judgment under CPLR 3212 dismissing defendants’ breach-of-contract and promissory-estoppel counterclaims. That motion is discussed in Point I. On motion sequence 007, plaintiff asks this court to grant summary judgment in plaintiff's favor on liability under CPLR 3212. That motion is discussed in Point II.

The moving party on a motion for summary judgment must “make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issue of fact.’ ” (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986].) “If the moving party produces the requisite evidence, the burden then shifts to the nonmoving party” to establish that material facts exist. (Nomura Asset Capital Corp. v Cadwalader, Wickersham, & Taft LLP, 26 NY3d 40, 49 [2015].) When considering a summary-judgment motion, the court must view “the facts in the light most favorable to the defendants.” (Ortiz v Varsity Holdings, LLC, 18 NY3d 335, 340 [2011].)

I. Plaintiff's Motion for Summary Judgment Dismissing Defendants’ Counterclaims (Mot Seq 006)

Plaintiff seeks summary judgment dismissing defendants’ counterclaims. The motion is denied as to defendants’ breach-of-contract counterclaim for the cost of the edible balloons and for late fees that plaintiff assertedly incurred.¹ The motion is granted as to defendants’ overlapping promissory-estoppel counterclaim for the edible-balloon costs.

A party asserting a claim for breach of contract must establish (1) the existence of a contract; (2) the party's own performance under the contract; (3) the other party's breach of the contract; and (4) resulting damages. (See US Bank Natl. Assn. v Lieberman, 98 AD3d 422, 423 [1st Dept 2012].)

As noted above, defendants have counterclaimed for $10,000 in charges for the edible balloons. Plaintiff argues that the First Invoice constituted an enforceable contract that encompassed the edible balloons; and that since plaintiff undisputedly paid all of the charges assessed under the First Invoice, plaintiff cannot be liable to defendants for breach of contract.

Defendants provide evidence, however, that the First Invoice did not incorporate the edible-balloon terms and that only the Final Invoice fully encompasses the parties’ agreement. Maturana's affidavit states that plaintiff first brought the edible-balloon issue to his attention on November 18—more than a week after the First Invoice was accepted by the parties. (See NYSCEF No. 116 at ¶ 18.) Maturana also states that plaintiff agreed to the additional price at an in-person walkthrough the following week. (Id.) And defendants have submitted emails sent on November 18 and November 20 reflecting the total price for the event that appears in the Final (not First) Invoice (see NYSCEF No. 176 at 2-3); and text messages from plaintiff indicating that they recognized that the balloons represented an additional expense (see NYSCEF No. 124). This evidence suffices to create a genuine factual dispute over whether the First Invoice included the cost of the edible balloons, or whether plaintiff owed defendants an additional $10,000 for the balloons as reflected in the Final Invoice.

A genuine dispute of fact also remains as to whether plaintiff's payments for the event were late so as to incur an additional $13,200 in late fees, as claimed by defendants. Plaintiff argues that although the First Invoice has language providing for a payment schedule and imposing late fees, these “boilerplate statements were not agreed to, not signed and never enforced in past dealings.” (NYSCEF No. 87 at 14.) Yet as defendants note, the First Invoice prominently features these terms, and plaintiff eventually made payments based on that invoice. (NYSCEF No. 153.) Additionally, plaintiff's argument that these provisions were unenforceable because they were unsigned contradicts its earlier contention that the First Invoice and related emails constituted a valid contract even though the invoice was not signed.² (See NYSCEF No. 87 at 12.)

Given these clear factual disputes about whether plaintiff met its obligations under the parties’ contract, summary judgment on defendants’ breach-of-contract counterclaim is denied.³

II. Plaintiff's Motion for Summary Judgment in its Favor on Liability on Plaintiff's Own Claims (Mot Seq 007)

Plaintiff also moves for summary judgment on its own claims against defendants. The motion is denied.

A. Plaintiff's Breach-of-Contract Claim

Plaintiff seeks summary judgment on its claim that defendants breached the contract between the parties by assertedly failing to provide the “bargained-for ․ artisanal culinary products and services.” (NYSCEF No. 140 at 10.)

Plaintiff's position is that the parties bargained for defendants’ artisanal dishes. Plaintiff contends that the contract called for defendants to “actually source, prepare, create, and provide the goods by its own skilled artisanal chefs.” (NYSCEF No. 140 at 10 [emphasis added].) According to plaintiff, defendants breached these terms by hiring non-chefs as event staffers; by using third-party vendors, as opposed to defendants’ own culinary chefs, to supply some of the food stations; and by removing some of the menu's dishes from the event. (See NYSCEF No. 146.)

In contrast, defendants contend that the contractual terms included only specific dishes listed on the agreed-upon menu and the number of chefs. (NYSCEF No. 172 at 4.) In his affirmation, Maturana states that he never made any representations to the plaintiff about the sourcing of his chefs, how food would be served, or the quality artisanal foods. (NYSCEF No. 170 at ¶ 10.) Defendants maintain that plaintiff does not point to any specific promise, either in email exchanges or in the invoices, to substantiate its view and that the plaintiff appears to base its legal theory on language taken from defendants’ website. (Id.) Defendants also dispute plaintiff's contention that it served poor quality food. Defendants cite an email from plaintiff's client thanking them for the excellent event. (NYSCEF No. 180.) The email also contains several hundred photos from the event, which defendants argue shows that plaintiff's client was pleased with the quality of the food and how well the event was run. (Id.)

These factual disputes preclude the grant of summary judgment to plaintiff on this breach-of-contract theory. (See Nomura Asset Capital, 26 NY3d at 49).

B. Plaintiff's UCC Claims

Plaintiff alternatively argues that it is entitled to summary judgment on its breach-of-contract claim under the Uniform Commercial Code perfect-tender and breach-of-implied-warranty-of-fitness provisions governing the sale of goods (UCC §§ 2-601 and 2-315, respectively). This court concludes, however, that a factual dispute exists about whether the parties were contracting merely for goods in the form of food, or were instead contracting for a mix of goods and services with the services component predominating.

The UCC applies to contracts “involving the sale of goods.” (UCC § 2-102.) If a contract involves both the performance of services and the sale of goods, a court must decide which type of contract predominates. (See Hagman v Swensen, 149 AD3d 1, 2 [1st Dept 2017].) The UCC applies only to contracts in which the sale of goods predominates. (Amendola v Basement Waterproofing Co., 203 AD2d 403, 403 [1st Dept 1994].) The question here, therefore, is whether defendants were being contracted merely to provide food dishes (albeit “artisanal” ones), or whether that food preparation and provision was merely an aspect of a broader contract for services. This court concludes that a reasonable jury could conclude that the parties’ agreement was for services, not merely for the sale of goods in the form of food.

The most apposite decision on this issue is Fallsview Glatt Kosher Caterers, Inc. v Rosenfeld (7 Misc 3d 557 [Civ Ct, Kings County 2005]). There, a catering company—hired to serve specifically prepared food along with other entertainment options—successfully argued that the service component of the contract predominated. (Id.) The court found that the company provided an “experience,” not merely food, such that the UCC provisions at issue did not apply. (Id. at 565.) The court based its decision on the fact that the catering company marketed and sold the kosher food as part of a package including accommodations and entertainment taking place at a country club. (Id.)

Plaintiff seeks to distinguish Fallsview, arguing that the additional services provided by the catering company in that case “stand[ ] in marked contrast to Rapt's role as its sole purpose for the event was to provide and serve food at the event.” (NYSCEF No. 170 at 5.) This court concludes that a reasonable jury could disagree with plaintiff. As plaintiff notes elsewhere in its summary-judgment papers, defendants’ menu was based around interactive food stations in which guests could pick and choose unique items created in front of them by the chefs. (NYSCEF No. 108 at ¶¶ 15, 19, and 32.) At one such station, a specially hired chef offered guests festive balloons that could be consumed—at a charge to plaintiffs that (according to defendant) was alone 20% of the total cost of the event. (Id. at ¶ 42.) That defendants supplied on-site chefs and were responsible for those chefs’ performance in front of the event's guests (including in the production of novelty items like edible balloons) raises a factual dispute about whether defendants were merely caterers responsible for providing food, or were instead predominantly serving as part of the evening's entertainment.

Given that a material dispute of fact exists about whether UCC §§ 2-601 and 2-315 would even apply to this contract—much less about whether defendants breached their obligations under those provisions if they did apply—plaintiff's motion for summary judgment on its UCC theory of recovery is denied.

C. Plaintiff's Economic Duress and Fraudulent Inducement/Misrepresentation Claims

Plaintiff's economic-duress and fraudulent inducement/misrepresentation claims are based on the edible-balloons transaction. In moving for summary judgment on those claims, plaintiff relies on arguments similar to ones it made in seeking dismissal of the balloon aspect of defendants’ counterclaims. Here, as in motion sequence 006, plaintiff is not entitled to summary judgment.

As to economic duress, plaintiff asserts that defendants’ threats to withdraw from the event unless it received an additional $10,000 for the balloons constitutes economic duress. (NYSCEF No. 146 at ¶ 161.) Yet these threats could constitute improper duress only if defendants were not entitled to this additional money. (See Beltway 7 Props., Ltd. v Blackrock Realty Advisers, Inc., 167 AD3d 100, 105 [1st Dept 2018].) If, as defendants assert, plaintiff agreed to the modification and promised to pay, defendants’ threatened withdrawal would instead be a legitimate attempt to obtain plaintiff's performance. Thus, because factual issues remain outstanding about whether defendants had a right to the $10,000, plaintiff is not entitled to summary judgment on its economic-duress claim.

As to fraudulent inducement and intentional misrepresentation, plaintiff asserts that defendants knowingly made various false statement regarding its capacity to put on the event and whether the edible balloons were included in the First Invoice. (See NYSCEF No. 140 at 18-19.) Plaintiff contends that defendants (1) did not intend on servicing the event with their own culinary foods as called for in the contract, (2) misrepresented the cost of hiring Bagale as a chef, and (3) improperly tried to put the costs of the edible balloons on plaintiff. These contentions, too, are all factually contested and require a jury's determination.

D. Plaintiff's General Business Law § 349 Claim

Plaintiff also seeks summary judgment on its deceptive-practices claim under General Business Law (GBL) § 349. Plaintiff has not shown an entitlement to judgment as a matter of law. To the contrary, on searching the record this court grants defendants summary judgment dismissing plaintiff's GBL § 349 claim. (See CPLR 3212 [b].)

A party asserting a GBL § 349 claim must prove that the challenged acts or practices were (1) consumer oriented, (2) materially misleading, and (3) harmful to plaintiff. (See Stutman v Chemical Bank, 95 NY2d 24, 29 [2000].) The record establishes as a matter of law that the assertedly deceptive practices at issue here were not consumer-oriented conduct for GBL § 349 purposes. Rather, the practices all related to a “single shot transaction[ ]” between the parties relating to the production of one event with specific and individualized requirements. (New York Univ. v Const'l Ins. Co., 87 NY2d 308, 321 [1995].) Defendants’ alleged deceptive conduct thus lacked “a broad impact on consumers at large.” (North State Autobahn Inc. v Progressive Ins. Group Co., 102 AD3d 5, 12 [2d Dept 2010].)

Plaintiff argues that because “[d]efendants’ business practices are a routine bait and switch for which other similarly situated consumers have and could be affected in the future,” defendants’ conduct should be regarded as consumer-oriented. (NYSCEF No. 140 at 27.) This court disagrees. It is unclear that an event-production company like plaintiff even qualifies as a consumer for GBL § 349 purposes at all. (Cf. Cruz v NYNEX Information Resources, 263 AD2d 285, 290-291 [1st Dept 2000] [holding that GBL § 349 did not apply to assertedly deceptive practices relating to businesses’ purchase of advertisement space in the Yellow Pages].) In any event, the possibility that defendants could engage in repeated transactions with similar clients (or the same client) does not alter the fact that these transactions by their nature would involve defendants’ tailoring their “unique and bespoke culinary creations” to the particular needs of a given client. (NYSCEF No. 182 at 10.) Such individualized business dealings are quite different from the kind of standardized transactions involving form documents that have been found to be consumer-oriented. (See Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 25, 26 [1995].)

This court concludes that plaintiff has not established—and cannot establish—an entitlement to relief on its GBL § 349 claim. Defendants are entitled to summary judgment in their favor dismissing this claim. (See Preston v Northside Collision-Dewitt, LLC, 158 AD3d, 1127 [4th Dept 2018] [granting summary judgment where the gravamen of plaintiff's claim was that the shop breached a contract outside § 349’s purview]; Kaufman v Medical Liab. Mut. Ins. Co., 92 AD3d 1057 [3d Dept 2012] [holding summary judgment appropriate where “nothing suggested a pattern of consumer-oriented behavior”].)

Accordingly, for the foregoing reasons it is hereby

ORDERED that the branch of plaintiff's motion under CPLR 3212 seeking summary judgment dismissing defendants’ breach-of-contract counterclaim (mot seq 006) is denied; and it is further

ORDERED that the branch of plaintiff's motion under CPLR 3212 seeking summary judgment dismissing defendants’ promissory-estoppel counterclaim (mot seq 006) is granted; and it is further

ORDERED that the branch of plaintiff's motion under CPLR 3212 seeking the grant of summary judgment in its favor on plaintiff's breach-of-contract, UCC, economic duress, and fraudulent inducement/misrepresentation claims (mot seq 007) is denied; and it is further

ORDERED that the branch of plaintiff's motion under CPLR 3212 seeking the grant of summary judgment in its favor on plaintiff's GBL § 349 claim (mot seq 007) is denied, and summary judgment is granted to defendants dismissing this claim.

FOOTNOTES

1.   Plaintiff's request for sanctions on the ground that the late-fee component of this counterclaim is (assertedly) frivolous also is denied. (See NYSCEF No. 87 at 14.)

2.   To the extent that plaintiff also is contending that its event payments were timely under that payment schedule regardless (see NYSCEF No. 87 at 14 [“at no point in time was there a past due amount”]), this court does not agree that plaintiff has established this contention as a matter of law.

3.   Defendants’ promissory-estoppel counterclaim relating to the edible-balloon charges is based on the same facts and seeks the same damages as the edible-balloon aspect of the breach-of-contract counterclaim; and it does not allege any duty independent of the contract. The promissory-estoppel counterclaim is therefore dismissed as duplicative. (See Kim v Francis, 184 AD3d 413, 414 [1st Dept 2020]; Brown v Brown, 12 AD3d 176, 177 [1st Dept 2004].)

Gerald Lebovits, J.