Opinion
38387/07
11-13-2012
T.H. Cheshire & Sons, Inc., Plaintiff, v. Glynis M. Berry, Defendant.
Wickham, Bressler, Gordon & Geasa, P.C. Attorneys for Plaintiff Glynis M. Berry Self Represented
Wickham, Bressler, Gordon & Geasa, P.C.
Attorneys for Plaintiff
Glynis M. Berry
Self Represented
, J.
HISTORY
Plaintiff, T.H. Cheshire & Sons, Inc., commenced this action on December 11, 2007, seeking payment for materials and labor provided to Defendant, Glynis Berry. Plaintiff seeks payment of $9,798.45, representing the balance due on what it purported to be a total project cost of $23,148.45. Plaintiff alleged that it had initially estimated the total project to cost $13,350.00. However, because the Defendant did not accept the "fixed cost" proposal within 20 days, the Plaintiff considered the project to be a "time and materials" job which significantly increased the cost. Defendant argued that she did accept the proposal timely, and that she never consented to a "time and materials" arrangement. Defendant maintained that the Plaintiff's "extras" exceeded all reasonable practicality in that it doubled the original proposal by adding an additional $13,000.00 to the total cost of the project. Defendant also asserted that some of Plaintiff's "extras" were either prerequisites of the initial proposal, or were unnecessary and excessive. The matter was transferred, pursuant to Civ. Pract. Law & Rules §325(d), to this Court on April 26, 2012. A trial without jury was conducted on September 4, 2012.
TESTIMONY
Donald Cheshire [hereinafter referred to as Plaintiff] first testified. Cheshire was the principle and owner of T.H. Cheshire and Sons, Inc. Cheshire testified that the corporation had been in business since 1927, and that he has owned it for the past 20 to 25 years. Cheshire testified that Defendant was a licensed architect, and that she acted as the general contractor for the project. Using the architectural plans drawn up by Defendant, Cheshire prepared a written proposal, dated February 4, 2005, which was as follows:
2/4/2005
Replace existing trough on existing service. Install new panel on 1st floor$13,350.00T and wiring as per plans
NO HEADS ON TRACK LIGHTS - EXTRA ELECTRICAL INSPECTION EXTRA
WE ESTIMATE hereby to furnish material and labor - complete in accordance with above specifications for the sum of $13,350.00. Payments to be made as follows: $7,000.00 upon signing of contract balance due upon completion.
CAPITAL IMPROVEMENT CERTIFICATE MUST BE PRODUCE[D] IN ORDER TO ELIMINATE SALES TAX.
Sales Tax$1,168.13
WE PROPOSE hereby to furnish material and labor — complete in accordance with above specifications.
Catherine Allen [s]
Authorized Signature
Note: this proposal may be withdrawn by us if not accepted within 20 days.
ACCEPTANCE OF PROPOSAL - The above prices, specifications and conditions are satisfactory and are hereby accepted. You are authorized to do the work as specified. Payment will be made as outlined above.
Glynis M Berry [s]
Signature
Cheshire stated that Defendant did not deliver the signed proposal until almost a year later. Therefore, he considered the proposal to be null and void, and proceeded with the project as "time and materials." Cheshire then testified that he began the project in March 2005 when he applied for the necessary electrical building permits. He designated the corporation as the electrical contractor ion the application. After several delays, construction began on October 3, 2005.In February 2006, the removal of all wiring and "rough-in" took place and was completed on March 16, 2006. Then, until June, carpenters worked at the site installing sheet rock and ceilings. Plaintiff then returned to the site on June 2, 2006, and completed the work on June 27, 2006. Cheshire did not personally perform the work, but he visited the site every two-to-three days.
Plaintiff stated that he discussed with Defendant the nature of the agreement, defining it as a "time and materials" contract because he had not received the signed proposal within the twenty days. He also acknowledged that Defendant continually countered that it was a "lump sum" agreement pursuant to the initial proposal.
Plaintiff testified that Defendant made modifications to the plans which caused additional expenses. For example, Defendant was able to reduce her expenses by $3,000.00 by purchasing her own fixtures. But as a result, Plaintiff had to install an unanticipated $1,500.00 low voltage transformer. As the project progressed, Defendant requested an itemization of any "extras" incurred by Plaintiff. Plaintiff provided Defendant with monthly invoices. The invoices were prepared by his office manager. Plaintiff stated that the final total for the project was $23,148.45. He surmised that $9,000.00 was incurred for materials and $14,000.00 for labor. He estimated that $13,213.20 was for "extras," stating that the "time and materials" contract allowed him to make the billing modifications.
On cross examination, Plaintiff stated he initially spoke with Defendant on January 17, 2005. He acknowledged that on February 22, 2005, Defendant verbally accepted the February 4, 2005 proposal. Based on that approval Plaintiff then applied for an electrical permit as early as March 2005 to commence the project. The electrical permit was ultimately issued on April 6, 2005. LIPA then determined that the project had to use the existing overhead wiring. However, this modification did not reduce the cost of the work, and it did not warrant any credit to Defendant. The initial proposal was created before LIPA informed Plaintiff of the need to change from underground to overhead plans, and as a result, he had to relocate a door and the architectural drawings were revised.Regarding billing, he asserted that his bookkeeper reviewed invoices received from his supplier, then added time and labor before mailing invoices to the Defendant. Plaintiff said that it was after receipt of Defendant's initial check many months later that he informed her that the estimate had expired. He said he told Defendant that because his costs had increased he would now charge Defendant "time and materials" for the project. For example, the cost of materials from his supplier increased $763.53 because of the increase in copper costs. He admitted that he never discussed with Defendant "markups" made by his office manager. Plaintiff's cross examination continued concerning items charged as "extras." His testimony was sometimes uncertain when he could not explain whether an "extra" was the result of a change made by Defendant, or due to a cost increase. One item was added because it made Plaintiff's job easier. Plaintiff could not say whether several items on the "extras" list were installed, nor why the "extras" were on the list.Sometimes, he just had no explanation. The only "extras" Plaintiff testified about, which were agreed upon by Defendant or were necessary, were drilling holes in cement ($738.16), installing a geothermo [sic] system ($510.39), and an additional hole for an "A" type fixture ($92.27)
Plaintiff's next witness was his office manager, Catherine Allen. Allen worked for the corporation once a week. Despite the Defendant not bringing the signed proposal to the office until about a year later, Allen conceded that she countersigned the proposal and accepted Defendant's $7,000.00 deposit.
On cross examination, Allen testified that she never mailed the signed contract back to Defendant. Because Defendant did not return the estimate until almost a year later, Allen stated that the estimate was no longer valid because prices had increased. She did acknowledge that she received a call from Defendant in February 2005, that Defendant accepted the proposal, but that the payment was not received until one year later.
Defendant proceeded with her case and called as her first witness, Robert Schneider, Jr. Schneider was a residential and commercial electrician who worked for T.H. Cheshire & Sons, Inc. for eleven years. He stated that he no longer worked for Plaintiff, although he did not leave the corporation under bad circumstances. He described the scope of the project. He testified that Defendant requested that all electrical work be completed cost efficiently. He also characterized the work crew which he supervised. Schneider supervised Scott, his main assistant, and two others. Schneider instructed trainees and conceded that a trainee could not work at his pace. His assistant, Scott's, previous experience was unrelated to electrical contracting. Schneider admitted that it was necessary to redo some of Scott's work, but that was common for a trainee's work. Schneider's assistant, Danny, occasionally left to go work at another site, when the workload was light. Schneider was responsible for completion of time cards, but a dollar amount would be affixed to the time card at the office. He could not recall whether he was at the site every day, but, if not, then a trainee would complete his own time card. He dropped off all paper work at the office. He testified that Donald Cheshire had knee replacement surgery in November, 2005, and that as a result the firm was short handed and extremely busy.
Schneider continued his testimony focusing on "extras." Items he installed which were not part of the original plan were a cooling system upgraded to a 150 amp circuit, requiring a lot of extra time and labor; drilling holes in cement, which was unusual and extremely expensive; a geo-thermostat system, a low volt transformer; a floating canopy, with a power attachment which transfers electric to track lighting: track light drops; a GHT receptacle, and T.V. connections. He did not remember installation of additional receptacles, additional switches or installation of a fixture for the parking area. He stated that outside stair lighting was not capable of installation because the stairs had not yet been built. He also recalled that a 3/4 compressor originally intended to be installed under stairs was never placed there.
Defendant then called her husband, Hideaki Ariizumi, to testify. He was an architect licensed in the United States and Japan for the past 30 years. Ariizumi testified that because the original architectural drawing was completed months before construction, he amended it to create a "current" plan after walking through the project site. He walked through the site counting all fixtures, outlets, switches, and telephone outlets. He stated that his drawing illustrated current electrical conditions at the site, "as built" or "as is." He compared the original drawing with the actual, current, "as is" plan, providing analysis of "extras." Based on his "current" drawing a spreadsheet was presented to the Court reflecting "credits" and "extras" incurred during the project. Based upon his calculations, Defendant was due a credit of $3,960.23, and incurred "extras" totaling $1,987.01.
On cross examination, Ariizumi testified that he did not prepare the chart, that he only corrected it and verified the numbers. He stated that he only counted items for his amended drawing, and that the chart listed only some of the costs of the "extras." He testified that his amendments did not reflect completed work or what was billed. He asserted that there was no architectural contract involved in this project, that he only helped to provide the drawings. He stated that the original contract with Plaintiff was a fixed price, lump sum contract.
Defendant next testified by narrative. Defendant stated that the building permit was issued on July 29, 2005. Because LIPA required the electrical service to remain above ground, she had to reapply for her permits which delayed the project an additional couple of months. She stated that the sheet rock was finished on May 6, 2006, that everything was ready for Cheshire's crew by the end of May. Defendant stated that she had compiled a chart of all hours and charges on time cards, which revealed that excessive hours had been charged, and that she had been billed actual hours in contravention of a "lump sum" contact. She surmised that her purchase of fixtures "A" and "B" entitled her to a credit of $3,150.00 for "A," and $684.91 for "B," totaling $3,834.95.
On cross examination, Defendant stated that she verbally accepted the estimate in February 2005. When she asked Plaintiff if he wanted a check he responded no. Defendant stated that it was in December 2005 that Plaintiff asked for the first payment, so she signed the acceptance and delivered it with the check to Plaintiff's office. Defendant acknowledged receiving itemized invoices, and that she telephoned Kathy Allen each time to inquire why she had received them because the agreement was a "lump sum" proposal. Defendant stated that she repeatedly asked for change orders, although as an architect she had never before received itemized invoices with a "fixed cost" contract. Defendant mailed Cheshire a letter and expected to receive proposed "change orders" to the initial proposal subject to her approval. She met Cheshire at the site and discussed prices, but never said that she was at her maximum, or that Plaintiff needed to stop work.
ANALYSIS
The Court sees the following issues presented:
1) Whether the Plaintiff had the capacity to enforce any contract with Defendant?
2) Whether the Plaintiff proved that Defendant did not timely accept the initial proposal thereby allowing the Plaintiff to bill for "time and materials?"
3) Whether the Plaintiff proved that there was an agreement for "time and materials?"
4) Whether Plaintiff established the value of any "extras" incurred during the project?
In a matter such as this, it is the province and indeed the obligation of the trial court to assess and determine matters of credibility. Morgan v. McCaffrey , 14 AD3d 670, 789 N.Y.S.2d 274 (2d Dept 2005); Matter of Liccione v. Michael A ., 65 NY2d 826, 493 N.Y.S.2d 121 (1985). The burden is upon Plaintiff to plead and prove its direct case by a fair preponderance of the credible evidence. Prince—Richardson on Evidence, § 3-210; Torem v. Central Avenue Rest , 133 AD2d 25, 518 N.Y.S.2d 620 [1st Dept 1987]. Credible evidence has been defined as evidence that proceeds from a credible source and reasonably tends to support the proposition for which it is offered and is evidentiary in nature and not merely a conclusion of law, nor mere conjecture. Dille v. Kelly , 31 Misc 3d 1232(A) (NY Supreme, NY County, 2011). The burden of proving the existence of a contract and performance according to its terms is upon the party suing for damages for its breach. Fisch on New York Evidence, Second Edition, § 1098, Lond Publications 1977/2008.
Suffolk County Code, Chapter 563, sets forth licensing requirements for electricians within the County. Section 563-3 states that "it is unlawful for any person to engage in any business in the County... without obtaining a license." Section 563—8 states that
"a contract entered into [...] by a person or entity [...] who on the date of contract does not possess a valid license to engage in such business, is unenforceable by him and voidable at the option of any other party to the contract."The elements of a cause of action for breach of contract are: (1) formation of a contract between the parties: (2) performance by plaintiff; (3) defendant's failure to perform; and (4) resulting damage. Furia v. Furia , 116 AD2d 694, 498 N.Y.S.2d 12 (2d Dept 1986). A contract is formed when there are at least two parties with legal capacity to enter into a contract who give their mutual assent to the terms of a contract and there is consideration. 2 PJI 3d 4:1 at 638 (2011); see, Maas v. Cornell University , 94 NY2d 87, 93, 699 N.Y.S.2d 716 (1999). Mutual assent is often referred to as "a meeting of the minds" of the parties on all essential terms of the contract. 2 PJI 4:1 3d at 639 (2010); Matter of Express Industries and Terminal Corp. v. New York State Dept. of Transportation , 93 NY2d 584, 693 N.Y.S.2d 857 [1999]; Farago v. Burke , 262 NY 229 (1933), Arliss v. Herbert Brenon Film Corporation , 230 NY 390 (1921). The manifestation of mutual assent must be sufficiently definite to assure that the parties are truly in agreement with respect to all material terms. New York Matter of Express Industries and Terminal Pt. of Transportation v. New York State Department Transportation , supra. The central issues regarding whether the parties had entered into a binding contract are: (1) meeting of the minds (mutual assent to the terms of the agreement by the parties); (2) definiteness (does the agreement establish the intention of the parties with sufficiently certainty as to be enforceable by a court); and (3) consideration (was there a bargained for exchange of something of value between the parties). 28 New York Practice Series, Contract Law § 2:1.
Case law abounds with examples of contract actions concerning actual versus estimated costs. In Depot Construction Corporation v. State , 19 NY2d 109, 278 N.Y.S.2d 363 (1967) the Court determined that a contractor was not entitled to additional money because actual costs exceeded estimated costs, that the contractor was obligated at its own risk. In order for a contractor to be compensated for "extras" he or she is required to provide sufficient documentary evidence, demonstrating which work was completed pursuant to the original "fixed price" contract, and which was performed in addition thereto. Ludemann Elec., Inc. v. Dickran , 74 AD3d 1155, 903 N.Y.S.2d 532 (2d Dept 2010). NY JUR Contracts §291.
The fact that this dispute exists does not mean that the parties have not told the truth. Frankly, the Court finds that both parties testified truthfully about what they believed to be the circumstances. It is in the legal interpretation of the circumstances that the disposition of this matter rests.
As to the first issue, the Court first finds that the Plaintiff lacked the capacity to enforce this agreement. The Suffolk County Code clearly states that a person who on the date of contract does not possess a valid license to engage in such business, is unenforceable by him. This provision places an affirmative burden on Plaintiff to prove its licensing compliance. The Court reviewed the record and documents and, except for the statement that Plaintiff has been in business since 1927, found no evidence that the necessary license was obtained. Neither the initial proposal, nor any invoice, reflected the existence of any county license. The Plaintiff's failure to provide testimony or documentary evidence on the existence of the required license was a fatal defect. The complaint must be dismissed.
Although the Court need not proceed further, it will assume arguendo that Plaintiff was duly licensed and will examine the remaining issues.
Did the Defendant timely accept the proposal? Plaintiff's evidence unequivocally established that Defendant did. Both Cheshire and Allen acknowledged that Defendant verbally accepted the proposal in February 2005. And it was based upon that acceptance that Plaintiff proceeded with the permitting process. The proposal did not require that the acceptance be written, nor did it set forth when a deposit was to be paid. According to Defendant, she paid $7,000.00 when Plaintiff requested it, and signed the acceptance at that time. Having accepted the proposal in February 2005, the cost of the project should have been $13,350.00 as initially proposed.
Next, did the Plaintiff prove that the project cost was converted from a "fixed cost" to a "time and materials" cost? On this issue Plaintiff did not prove that there was a meeting of the minds. Plaintiff testified that each time he told Defendant that he was billing for "time and materials" she refuted it. And the testimony showed that Defendant refuted each monthly invoice by informing the Plaintiff's office manager. The fact that the project may have been delayed because of LIPA involvement, etc., and Plaintiff costs increased as a result, is not a basis to charge the Defendant "time and materials." As noted in the decisional law, even though Plaintiff's actual cost did not match its estimate, it is still obligated to complete the work at its own risk as agreed. Depot Construction Corp. v. New York State Dept. Of Transportation , supra.
Lastly, as to the "extras," Plaintiff only established the value of three items, that is: for drilling holes in cement ($738.16), installation of the geothermo [sic] system ($510.39), and an additional hole for an "A" type fixture ($92.27). Although Plaintiff provided an itemized list of "extras" totaling $9,935.25, he could not explain the "extras." For many he did not know why they were on the list; for some he could not say whether they were actually installed by him; for a few he acknowledged that the original plan should have had the item included in the initial proposal . If the action was not dismissed for failing to establish licensing compliance, evidence could only support an award of $1,340.82 to Plaintiff for "extras."
By reason of the foregoing, it is hereby
ADJUDGED, that Plaintiff failed to plead and prove that it possessed the required license in order to maintain this action; and it is further
ORDERED, that the action is dismissed.
This constitutes the decision and Order of the Court.
Andrew G. Tarantino, Jr.
J.C.C.