East Hampton Union Free School District v. Sandpebble Builders, Inc.
Opinion of the Court
A contract that is not approved by a relevant municipal or governmental body, as required by law, rule, or regulation, may be ratified by the municipality or government body by subsequent conduct, such as by making payments pursuant to the contract (see JRP Old Riverhead Ltd. v Town of Southampton, 44 AD3d 905, 909 [2007]; Della Rocco v City of Schenectady, 278 AD2d 628, 630-631 [2000]; Imburgia v City of New Rochelle, 223 AD2d 44, 48 [1996]). Here, the defendants established their prima facie entitlement to judgment as a matter of law, in effect, declaring that the April 2002 contract is valid and enforceable notwithstanding the alleged absence of Board approval, by demonstrating that the Board ratified the contract by making payments to Sandpebble on the contract (see JRP Old Riverhead Ltd. v Town of Southampton, 44 AD3d at 909; Della Rocco v City of Schenectady, 278 AD2d at 630-631). Further, the defendants demonstrated that the School District referred to Sand-pebble as its construction manager in numerous publications regarding the School District’s efforts to renovate the schools. In opposition, the School District failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Accordingly, with respect to that portion of the first cause of action which sought a judgment declaring that the April 2002 contract is void and unenforceable, the defendants are entitled to a judgment declaring that the April 2002 contract is valid and enforceable.
The defendants further demonstrated their prima facie
However, in opposition to the defendants’ showing, the School District raised a triable issue of fact as to whether the project contemplated by the April 2002 contract was permanently abandoned in favor of a new and different project. The School District submitted various affidavits in which its officials averred that the project contemplated by the April 2002 contract was a small-scale, $18,000,000 project, that this project was considered abandoned once it decided not to schedule a public referendum for the issuance of a municipal bond offering to fund an $18,000,000 project, and that it instead began contemplating projects of vastly different costs and scopes. Accordingly, the Supreme Court properly denied that branch of the defendants’ motion which was for summary judgment, in effect, declaring that the April 2002 contract was not properly terminated in accordance with its terms (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d at 562; see generally TAG 380, LLC v ComMet 380, Inc., 10 NY3d 507, 512-513 [2008]). For the same reasons, the Supreme Court also properly denied that branch of the defendants’ motion which was for summary judgment on Sandpebble’s first counterclaim to recover damages for breach of the April 2002 contract (see Alvarez v Prospect Hosp., 68 NY2d at 324; Zuckerman v City of New York, 49 NY2d at 562; see generally TAG 380, LLC v ComMet 380, Inc., 10 NY3d at 512-513).
With respect to the third cause of action, the School District
The Supreme Court erred, however, in denying that branch of the defendants’ motion which was for summary judgment dismissing the second cause of action, which sought to recover damages for breach of the duty of good faith and fair dealing. This cause of action was not predicated upon the April 2002 contract but, rather, the implied covenant of good faith and fair dealing was alleged to have arisen from a purported preliminary agreement reached by the parties during negotiations of an allegedly new contract for construction management services. Although the parties orally agreed to many of the terms of an allegedly new contract, Sandpebble demonstrated, prima facie, that it did not intend, or manifest any intention, to be bound to such a contract. Therefore, no preliminary agreement was formed, from which a duty to negotiate in good faith could arise (see Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475 [1989], cert denied 498 US 816 [1990]; Rivera v Alaimo, 54 AD3d 325 [2008]; Carmon v Soleh Boneh Ltd., 206 AD2d 450 [1994]; cf. SNC, Ltd. v Kamine Eng’g & Mech. Contr. Co., 238 AD2d 146 [1997]; Brown v Cara, 420 F3d 148, 153 [2005]; Teachers Ins. & Annuity Assn. of Am. v Tribune Co., 670 F Supp 491, 497-498 [1987]; see generally IDT Corp. v Tyco Group, S.A.R.L., 13 NY3d 209, 213 n 2 [2009]). In opposition, the School District, pointing only to the parties’ oral negotiations and Sandpebble’s acknowledgment that the parties had reached an agreement with respect to most of the terms of an allegedly new contract, failed to raise a triable issue of fact. Ac
The parties’ remaining contentions are either without merit or not properly before this Court.
Since this is, in part, a declaratory judgment action, the matter must be remitted to the Supreme Court, Suffolk County, for further proceedings on so much of the first cause of action as sought a judgment declaring that the School District properly terminated the contract in accordance with its terms, the third cause of action, and the counterclaims and, thereafter, for the entry of a judgment, inter alia, declaring that the April 2002 contract is valid and enforceable (see Lanza v Wagner, 11 NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]), and dismissing the second cause of action. Skelos, J.E, Hall, Lott and Roman, JJ., concur. [Prior Case History: 23 Misc 3d 1104(A), 2009 NY Slip Op 50572(U).]
Case-law data current through December 31, 2025. Source: CourtListener bulk data.