Jarg Inc. v New York Store Fronts Inc.
Annotate this CaseDecided on March 2, 2005
Civil Court, Kings County
Jarg Inc., Plaintiff,
against
New York Store Fronts Inc., Defendant.
322085/04
Loren Baily-Schiffman, J.
This matter was tried to completion on October 28, 2004. In this action for rescission of an oral contract to install a store front at a bar in Rockland County, New York, the plaintiff sues for rescission of the contract and return of the $9000.00 it paid to defendant. Defendant counterclaimed for $6000. Two principals of plaintiff corporation testified and were subject to cross-examination as was the employee of a glass fabrication company. At the close of plaintiff's case, defendant moved to dismiss the complaint. The Court reserved decision on the motion. Defendant then rested without calling any witnesses and withdrew its counterclaim. For the following reasons, judgment is granted to defendant dismissing the complaint.
It is uncontested that the parties entered into an oral contract to install the store front. The agreed upon price of the contract was $12,500 and plaintiff asserts that the contract was to be completed on or before June 1, 2003. Defendant began to perform on the contract. Demolition work was done on the existing store front and work was begun on the frames for the front and back doors of the bar. Thereafter, defendant purchased and installed the store front windows. However, the windows as installed did not function properly. Moreover, the front door was delivered but not installed and the back door was neither purchased nor installed. The work on the back door frame was not completed. Defendant last did work at the premises on May 29, 2003.
The endorsed complaint in this action states that plaintiff paid the defendant $9,000.00 to install a door at plaintiff's address. At trial the pleadings were conformed to the proof to the extent that the contract contemplated installation of a store front including windows and a door and a back door. The endorsed complaint further states that defendant failed to perform and/or return plaintiff's money despite numerous demands therefor. Plaintiff seeks damages of $9000.00 plus interest from May 28, 2003. Defendant counterclaimed for $6000.
As presented in the complaint and at trial, plaintiff's action is one for rescission of the [*2]contract.[FN1] Plaintiff seeks return of all of the monies paid to defendant and alleges in the complaint that defendant "failed to perform and/or return plaintiff's money despite numerous demands therefor." The testimony on behalf of plaintiff at trial was that even prior to the institution of this action, the only relief sought by plaintiffs from defendant was the return of the money paid to defendant. At trial it became clear that defendant partially performed the contract, but did not complete the work. It was also conceded at trial that plaintiff paid defendant $9000 towards the full contract price and that $5000 of that amount was the cost of the windows.
As indicated by the Court of Appeals in Callanan v. Powers, 199 NY 268 (1910), "[t]here is no hard and fast rule on the subject of rescission, for the right usually depends on the circumstances of the particular case". Id at 284. However, the equitable [FN2] remedy of rescission is available "only when there is lacking [a] complete and adequate remedy at law and where the status quo may be substantially restored (citation omitted)"(Rudman v. Cowles Communications, Inc., 30 NY2d 1, 13,330 NYS2d 33, 280 NE2d 867). Sokolow, Dunaud, Mercadier & Carreras LLP v. Lacher, 299 AD2d 64 at 71 (1st Dept, 2002). See also Fink v. Friedman, 78 Misc 2d 429 (Sup. Ct. Nassau Co., 1974). The theory underlying an action for rescission is to restore the parties to the status quo existing at the time the contract was made. Callanan v. Powers, supra at 287. Where it is impossible to restore the parties to the status quo at the time the contract was made, rescission is not the appropriate remedy.
At the time the plaintiff and defendant entered into their oral contract, plaintiff was in the process of leasing a store for the purpose of opening a bar and needed a new store front. Defendant at that time had not purchased any of the materials needed to replace the existing store front and had not expended any of his and/or his workers' labor to frame out and install the new store front. Thereafter, defendant obtained custom measured windows, demolished the existing store front and back door area, framed out the new front windows and door and delivered and partially installed the front windows. It is conceded that defendant did not complete the work contracted for and that plaintiff hired another company to complete the work. That company finished the installation of the front windows and door and framed out and installed a new back door. Plaintiff, through the testimony of Greg Bottoni, conceded that there was a value to the work that defendant did at the premises.
As the materials provided by defendant were used to complete the work and defendant's labor was expended to partially install the windows and door, a return of the money paid to defendant by plaintiff which is sought in this action will not return the parties to the status quo at the time the contract was made. Plaintiff seeks the return of $9000 even though $5000 of that [*3]money was the cost of materials that were installed in the premises and that plaintiff is now benefitting from.
Where the transaction between the parties involves the installation of custom made items designed for installation in a particular building, the parties cannot be restored to the status quo at the time the contract was made and rescission is unavailable. Tarleton Bldg Corp v. Spider Staging Sales Co., 26 AD2d 809 (1st Dept 1966); Sokolow, et al v. Lacher, supra. Here, the circumstances of this case do not lend themselves to restoration of the parties to the status quo at the time of the making of the contract. It would be inequitable to hold that the contract is rescinded when plaintiff has obtained the benefit of defendant's work and, in particular, plaintiff is benefitting from materials purchased by defendant with money provided by plaintiff that plaintiff is now asking the Court to order returned to them. Moreover, there exists an adequate remedy at law. As the only cause of action contained in the complaint is one for rescission, judgment is granted to the defendant dismissing the complaint as plaintiff has failed to make out its claim for rescission.[FN3]
This constitutes the Decision and Order of the Court.
DATED:March 2, 2005
___________________________
Hon. Loren Baily-Schiffman
Footnotes
Footnote 1:Defendant moved to dismiss the complaint at the end of plaintiff's case on the basis that the only cause of action asserted in the complaint is one for rescission and that plaintiff had not made out its prima facie case for rescission. The Court reserved decision on defendant's motion.
Footnote 2:This Court has jurisdiction over claims of rescission pursuant to New York City Civil Court Act §213.
Footnote 3:Approximately three (3) weeks after trial, plaintiff's counsel submitted a Post-Trial Memorandum of Law to the Court. Plaintiff had neither the permission of the Court nor consent of defendant to submit this document. Accordingly, the Court has neither read nor considered the plaintiff's Memorandum in reaching its Decision.
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