By Caroline Faughnan | Staff Writer
Contract; breach; promissory estoppel.
Defendants are the owner and developer and the on-site representative for commercial property. Plaintiff is a construction company who assumed the role of construction manager (PCPM) during the preconstruction phase of defendant’s project. There was no written and signed contract. Defendant terminated plaintiff after the preconstruction phase due to significant budgetary concerns. Plaintiff brought this action for breach of contract, alleging an agreement existed retaining plaintiff for the entire project with intentions of executing a written agreement covering their rights in depth. Plaintiff alleged the breach occurred when it was terminated without cause. Plaintiff also relied upon the doctrine of promissory estoppel alleging it reasonably relied, to its own detriment, on defendants’ unambiguous promise plaintiff would be the entire project’s construction manager. Plaintiff sought summary judgment on liability and setting the matter down for inquest on damages. Defendants cross-moved for an order of summary judgment dismissing the complaint. Defendants argued the alleged oral agreement for construction management services for the entire project is barred by the statute of frauds. Defendants contended plaintiff failed to establish the existence of an implied-in-fact contract because plaintiff’s services were related only to the preconstruction phase for which it was fully paid. Defendants further argued plaintiff did not have a claim under promissory estoppel because there was no clear agreement to hire plaintiff for the construction phase. Defendants asserted there was no unconscionable injury since the only profits sought by plaintiff were for services it never performed. The court denied plaintiff’s motion for summary judgment on liability because plaintiff failed to establish prima facie there was mutual intent to contract and an oral contract existed by which it was appointed the entire project’s construction manager. The court further held because plaintiff was fully paid for the work performed, the circumstances did not warrant the application of the promissory estoppel doctrine. Finally, the court denied defendants’ motion for summary judgment dismissing the breach of contract claim because questions existed as to whether the oral agreement by which plaintiff was appointed the PCPM was terminable by defendants without cause, and whether plaintiff suffered lost profits on the preconstruction phase work that was outstanding when it was terminated.
Richter + Ratner Contracting Corp. v. Estate 4 Capital, LLP, Index No. 112469/2011, 9/16/14 (Schweitzer, J.).