Sandya Shetty, Respondent, v. ACEA LLC (2026)

ORDERED that the judgment is reversed, without costs, and the matter is remitted to the District Court for the entry of a judgment in favor of defendants dismissing the action.

In this small claims action, plaintiff seeks to recover the principal sum of $5,000 based on defendant's alleged breach of a contract to write grant proposals for plaintiff's nonprofit organization.

At a nonjury trial, plaintiff testified that, in August 2022, defendants were hired to write three grant proposals for her nonprofit organization, Alert Inc. (Alert), for $6,000. Plaintiff's husband and partner in the nonprofit organization, John, initially dealt with defendants, but after her husband passed away in August of 2023, plaintiff followed up with defendants. Defendants kept requesting additional information from plaintiff along with more money before they would complete the grant proposals. Plaintiff further testified that she had provided defendants with all necessary and requested information from Alert in order to complete the grant proposals, including information regarding a project at a local school for the installation of security cameras and bulletproof doors, but defendants never produced the grant proposals. Plaintiff submitted into evidence various emails and text messages between the parties which show that plaintiff provided defendants with a general response as to the cost to install bulletproof doors at the school and one estimate from a security company for the installation of a security camera system at the school. With respect to damages, plaintiff testified that she would have wanted a full refund of the $6,000 that had been paid, but understood that the monetary jurisdictional limit of the court was $5,000 (see UDCA 1801).

Defendant Kaufman, testifying on behalf of both defendants, testified that, at his first meeting with John, he had explained to John that there was a $17,000 retainer fee for work to be conducted at $170 per hour. John offered to increase the retainer fee to $18,000, payable in three installments of $6,000 with no set amount of grant proposals to be completed. Kaufman agreed and defendants were subsequently paid $6,000. Kaufman began working on the grant writing process, although Kaufman had informed John, in conversations and emails, that he would need detailed budget information for the potential school safety project, along with budget and financial information for the nonprofit organization itself, in order to complete the grant proposal writing process. John did not provide this information and no additional payments were received. In August 2023, after John's death, plaintiff recommenced discussions regarding the grant writing process, and Kaufman and his partners met with her to discuss payment and going forward with the grant writing process. After this meeting, Kaufman sent her the emails and materials he had sent to John previously, along with a summary of the work that he had already completed and of work he intended to do. As to damages, Kaufman testified that, over 18 months, he did work worth the entire $6,000 retainer and was not willing to pay back any amount thereof to plaintiff. Kaufman also attached three emails that he had sent to John which explained in detail the grant proposal process, grant proposal requirements, and a sample project budget, and follow-up emails with John requesting the required information. Kaufman also requested this information from plaintiff and proposed several payment options in order to continue the grant writing process. Defendant submitted into evidence the unsigned engagement letter along with copies of several emails with John and later with plaintiff. The record does not indicate that plaintiff ever provided all of the requested information.

Following the trial, a judgment was entered on March 7, 2025 in the District Court (Lisa A. LoCurto, J.) awarding plaintiff the principal sum of $3,000. The court did not make any findings or explain how it arrived at the amount awarded.

In a small 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; see UDCA 1804; Ross v Friedman, 269 AD2d 584 [2000]; Williams v Roper, 269 AD2d 125 [2000]). Furthermore, the determination of a trier of fact as to issues of credibility is given substantial deference, as a trial court's opportunity to observe and evaluate the testimony and demeanor of the witnesses affords it a better perspective from which to assess their credibility (see Vizzari v State of New York, 184 AD2d 564 [1992]; Kincade v Kincade, 178 AD2d 510 [1991]). This deference applies with greater force to judgments rendered in the Small Claims Part of the court (see Williams v Roper, 269 AD2d at 126).

The elements of a cause of action to recover damages for breach of contract include the existence of a contract, the plaintiff's performance under the contract, and the defendant's breach (see New York State Workers' Compensation Bd. v SGRisk, LLC, 116 AD3d 1148, 1153 [2014]; JP Morgan Chase v J.H. Elec. of NY, Inc., 69 AD3d 802, 803 [2010]). Here, the parties did not dispute that an agreement had been reached whereby defendants would complete grant proposals for the nonprofit organization, but did disagree as to the amount of grant proposals to be written and the amount of compensation defendants would be paid.

As noted, the court gave no explanation for its award of $3,000 in favor of plaintiff and we cannot discern any basis in the record for said sum. Plaintiff was not seeking this amount in damages; indeed, she testified that she was seeking a full refund of the $6,000 paid but limited the action to $5,000 due to the Small Claims Part's monetary jurisdictional limit. Further, there was no testimony from defendants that they conducted work warranting their retention of only $3,000 of the $6,000 paid. Rather, the testimony was to the effect that defendants had exhausted the retainer. Thus, the judgment in favor of plaintiff in the sum of $3,000 cannot be sustained. Moreover, upon a review of the record, we find that plaintiff failed to establish her performance under the contract, namely, that she had provided defendants with the specific project budget details and financial information for Alert which defendants had indicated was necessary in order to complete the grant proposals. Consequently, the judgment in favor of plaintiff failed to provide the parties with substantial justice according to the rules and principles of substantive law (see UDCA 1804, 1807; Ross v Friedman, 269 AD2d 584; Williams v Roper, 269 AD2d 125).

Accordingly, the judgment is reversed and the matter is remitted to the District Court for the entry of a judgment in favor of defendants dismissing the action.

DRISCOLL, P.J., WALSH and VAZQUEZ-DOLES, JJ., concur.

ENTER:

Jennifer Chan

Chief Clerk

Decision Date: September 17, 2026