Rasmus Construction Corp. v. Nagel

*521OPINION OF THE COURT

Order entered September 27, 1994 reversed, with $10 costs, motion denied and complaint reinstated.

The facts are few and simple. Plaintiff Rasmus Construction Corporation, a licensed home improvement contractor, acting through its principal, Robert Rasmus, a licensed home improvement salesperson, was hired by defendant to renovate portions of the defendant’s cooperative apartment in premises located at 40 Sutton Place, Manhattan. The contemplated renovation work was completed in or about July 1991, with no objections made by defendant as the work progressed over the quality or timeliness of the plaintiffs services. Upon the defendant’s failure to remit any portion of the amounts specified in the plaintiffs itemized billings (totaling just over $8,000), plaintiff commenced this action in November 1991 for work, labor and services rendered.

In his amended answer dated December 17, 1991, defendant stated as an "affirmative defense” that he "hereby elects to cancel its [sic] home improvement contract with plaintiff’ based upon the absence of a "written contract” as required by administrative rules governing the execution and cancellation of home improvement contracts (see, Administrative Code of City of NY § 20-391; 6 RCNY 2-221).1 By letter of that same date (Dec. 17, 1991), roughly five months after completion of the renovation work agreed to and nearly one month after commencement of the lawsuit, defendant wrote to plaintiff echoing his intention to "cancel any home improvement contract” due to the plaintiffs failure to furnish a "written home improvement contract”.

Civil Court granted the defendant’s motion for summary judgment, finding the defendant’s postlitigation cancellation notice to be "valid and timely”. We disagree, and thus deny defendant’s motion and reinstate the complaint.

As indicated, defendant accepted the benefit of the plaintiffs full performance under the parties’ oral home improvement *522contract and unambiguously acknowledged the existence of the agreement in his amended answer to the complaint. No claim is advanced by defendant that he was induced to contract for home improvements in reliance on any fraudulent representations or other misconduct on the plaintiffs part (cf., Administrative Code § 20-396). In the circumstances, defendant may not now rely upon any administrative writing requirement as a basis to belatedly "cancel” the completed service contract or to avoid his payment obligations thereunder, any more than defendant could now assert a general Statute of Frauds defense (see, Givens, 1996 Supp Practice Commentaries, McKinney’s Cons Laws of NY, Book 23A, General Obligations Law § 5-701, 1996 Supp Pamph, at 41-42; see also, Swerdloff v Mobil Oil Corp., 74 AD2d 258, 261-262, Iv denied 50 NY2d 913). " Tf the statute [or ordinance] does not provide expressly that its violation will deprive the parties of their right to sue on the contract, and the denial of relief is wholly out of proportion to the requirements of public policy * * * the right to recover will not be denied.’ ” (Lloyd Capital Corp. v Pat Henchar, Inc., 80 NY2d 124, 127, quoting Rosasco Creameries v Cohen, 276 NY 274, 278.)

Cases such as Mortise v 55 Liberty Owners Corp. (102 AD2d 719, affd 63 NY2d 743) and Chosen Constr. Corp. v Syz (138 AD2d 284), relied upon by defendant, are inapposite, involving the situation, not here present, where a contractor or salesperson unlicensed under the Administrative Code seeks enforcement of a home improvement contract. Based upon the "public safety” concerns underlying the code licensing requirements, home improvement contracts entered into by such unlicensed entities are considered "void” (Mortise v 55 Liberty Owners Corp., supra, 102 AD2d, at 720). Inasmuch as both the plaintiff contractor in this case and its salesperson were duly licensed at all relevant times, the public safety concerns underlying Mortise and similar cases find no application here.

Nor can the administrative regulations — even if otherwise enforceable2 — reasonably be read to preclude the plaintiff’s right of recovery. To the extent 6 RCNY 2-221 (f) purports to *523grant a buyer the right to cancel a home improvement contract "at any time”, it was obviously intended to apply to executory contracts only. This interprétation not only harmonizes subdivision (f) with provisions elsewhere in the rules limiting a buyer’s cancellation right to a specified time period prior to commencement of the work (6 RCNY 2-221 [a] [10]; [b]; see, n 1, supra), but is consistent with the ordinary legal usage of the word "cancel” to mean " 'annul or destroy * * * revoke or recall’ ” (Matter of Otterbein v Babor & Comeau Co., 272 NY 149, 152), terms incompatible with a fully performed contractual agreement.

In permitting the plaintiffs action to go forward, we note that any violation of the agency rules that may have occurred may be redressed through appropriate administrative channels (see, Administrative Code § 20-392).

(concurring). The controlling issue is whether the regulation promulgated by the Department of Consumer Affairs requiring all home improvement contracts to be in writing is valid. I find that it is not because it was promulgated in excess of its authority.

The purpose for this legislation is to require persons engaged in home improvements to be licensed. (Administrative Code of City of NY § 20-385.) It delegated to the Department of Consumer Affairs the power to make "such rules and regulations not inconsistent with the provisions of this subchapter, as may be necessary with respect to the form and content of applications for licenses * * * and [for] other matters incidental or appropriate to his or her powers and duties” (Administrative Code § 20-391).

Administrative Code § 20-386 (6) defines a home improvement contract as "an agreement, whether oral or written”. Consumer Affairs enacted a regulation requiring all home improvement contracts to be in writing. (6 RCNY 2-221.)

An administrative agency "may not promulgate a regulation that adds a requirement that does not exist under the statute”. (Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v Town of Fallsburg, 78 NY2d 194, 204.) It may not use its rule-making power "as a license to correct whatever societal evils it perceives”. (Boreali v Axelrod, 71 NY2d 1, 9.) "[T]he failure of the Legislature to include a matter within a particular statute is an indication that its exclusion was intended”. (Pajak v Pajak, 56 NY2d 394, 397.)

*524Mandating a written contract added a requirement excluded by the City Council is invalid. Consumer Affairs exceeded its delegated authority to implement rules to administer the legislation and legislated in the guise of rule making.

This ground for reversal, although not previously raised, is proper since it involves a question of statutory construction which could not be countered by any factual showing. (Telaro v Telaro, 25 NY2d 433, 439.)

Parness, J. P., and Freedman, J., concur; McCooe, J., concurs in a separate memorandum.