MOGHUL PROPERTIES LLC v. SCHINDLER ELEVATOR CORPORATION (2024)

ORDERED that the judgment is affirmed, without costs.

Plaintiff commenced this commercial claims action to recover the principal sum of $5,000 for breach of contract, representing the amount of plaintiff's deposit that was not refunded by defendant following defendant's cancellation of the contract. At a nonjury trial, plaintiff's owner testified that the parties executed a contract in March 2016 for defendant to install an elevator for the price of $82,900 at a brand new building that plaintiff was constructing. The contract, which was admitted into evidence, stated that, in the event the project was not completed by September 30, 2016, defendant would “be entitled to an equitable adjustment in price.” The contract also provided that “[i]f the start of the work is delayed by more than four months from the scheduled project start date, or cancelled or abandoned for any reason, [plaintiff] agree[s] to pay charges for preliminary costs which include but may not be limited to labor, materials, administration, engineering, project consulting, collection fees, interest and insurance costs, plus a cancellation fee of not less than 5% of [defendant's] price,” and that plaintiff would “pay any such charges upon presentation of [defendant's] invoice.” Paragraph 7 of a terms and conditions attachment to the contract, which attachment was “incorporated by reference” into the contract, stated that “[i]f either party shall default in the performance of its obligations hereunder, the nondefaulting party may send written notice reasonably describing the default,” and that, in the event the “defaulting party does not commence to take reasonable steps to cure the default, within 10 days of the date of such notice, the nondefaulting party may terminate upon 10 days further notice.”

Plaintiff's owner indicated that the project was repeatedly delayed because defendant needed electricity at the subject building to install the elevator. Plaintiff's owner testified that he agreed to multiple increases in the contract price requested by defendant in 2017 and 2018 due to increased costs as a result of continued delays in the project. During both parties' testimony, various “change orders” signed by both parties were admitted into evidence listing the increased costs. Plaintiff's owner confirmed that, after execution of the “change orders,” the new contract price was $100,685. Plaintiff's owner submitted various emails sent by defendant in March, April and May 2018 requesting payment of the amounts listed in the change orders or defendant would cancel the contract. He also provided a letter from defendant dated May 31, 2018 stating that defendant was cancelling the contract due to plaintiff's failure to pay the amounts listed in the “change orders.” Plaintiff's owner argued that defendant was not entitled to cancel the contract, and that plaintiff was not required to pay the amounts listed in the change orders before the project commenced. Following the trial, the District Court (Geoffrey N. Prime, J.) dismissed the action.

In a commercial claims action, our review is limited to a determination of whether “substantial justice has ․ been done between the parties according to the rules and principles of substantive law” (UDCA 1807-A [a]; see UDCA 1804-A; Ross v Friedman, 269 AD2d 584 [2000]; Williams v Roper, 269 AD2d 125 [2000]).

To prevail on a breach of contract claim, the plaintiff must establish “the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of his or her contractual obligations, and damages resulting from the breach” (Dee v Rakower, 112 AD3d 204, 208-209 [2013]; see Elisa Dreier Reporting Corp. v Global NAPS Networks, Inc., 84 AD3d 122, 127 [2011]). “The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent” (Greenfield v Philles Records, 98 NY2d 562, 569 [2002]; see PSCW, Inc. v Monaco, 216 AD3d 820, 821 [2023]). “The best evidence of what parties to a written agreement intend is what they say in their writing” (Greenfield v Philles Records, 98 NY2d at 569 [internal quotation marks omitted]; see Donohue v Cuomo, 38 NY3d 1, 12 [2022]). Therefore, “a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” (Greenfield v Philles Records, 98 NY2d at 569; see NRT NY, LLC v Harding, 131 AD3d 952, 954 [2015]; Schonfeld v Saucedo, 159 AD3d 756, 758 [2018]). “Where a contract was negotiated between sophisticated, counseled business people negotiating at arm's length, courts should be especially reluctant to interpret an agreement as impliedly stating something which the parties specifically did not include” (PSCW, Inc. v Monaco, 216 AD3d at 822 [internal quotation marks and alterations omitted]; see Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]; Schonfeld v Saucedo, 159 AD3d at 758).

Upon a review of the record, we find that the judgment rendered substantial justice between the parties according to the rules and principles of substantive law (see UDCA 1804-A, 1807-A [a]), as plaintiff failed to meet its prima facie burden. The provisions of the contract pertaining to cancellation are “clear and unambiguous,” and, therefore, should be “enforced according to the plain meaning of [their] terms” (Greenfield v Philles Records, 98 NY2d at 569). Plaintiff did not prove by a preponderance of the evidence that it fulfilled all of its obligations under the contract, and, thus, that defendant was not entitled to cancel the contract and retain a cancellation fee of $5,034, i.e., 5% of the contract price of $100,685. Further, paragraph 7 of the terms and conditions provides that defendant could cancel the contract if (1) plaintiff defaulted, (2) defendant provided written notice of the default, (3) plaintiff failed to cure the default within 10 days of the notice, and (4) defendant provided 10 days further notice that it would be cancelling the contract. The emails submitted at trial do not demonstrate that defendant failed to comply with this provision. Consequently, plaintiff did not establish that it was entitled to a return of the full amount of its deposit.

Accordingly, the judgment is affirmed.

GARGUILO, P.J., WALSH and GOLDBERG-VELAZQUEZ, JJ., concur.