Pozament Corp. v AES Westover, LLC

[*1] Pozament Corp. v AES Westover, LLC 2006 NY Slip Op 52473(U) [14 Misc 3d 1210(A)] Decided on December 21, 2006 Supreme Court, Broome County Lebous, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 21, 2006
Supreme Court, Broome County

Pozament Corp., Plaintiff,

against

AES Westover, LLC, Defendant.



2001-2339



COUNSEL FOR PLAINTIFF:PATTISON, SAMPSON, GINSBERG & GRIFFIN, P.C.

BY:THOMAS E. LAVERY, ESQ., OF COUNSEL

OFFICE & POST OFFICE ADDRESS

22 FIRST STREET

P.O. BOX 208

TROY, NY 12181-0208

COUNSEL FOR DEFENDANT:HINMAN, HOWARD & KATTELL, LLP

LESLIE PRECHTL GUY, ESQ., OF COUNSEL

OFFICE & POST OFFICE ADDRESS

700 SECURITY MUTUAL BUILDING

P.O. BOX 5250

BINGHAMTON, NY 13902-5250

Ferris D. Lebous, J.

HON. FERRIS D. LEBOUS, J.S.C.

Defendant AES Westover, LLC moves for an order prohibiting plaintiff from introducing evidence of damages at trial after the original term of the contract (General Obligations Law § 5-903). Plaintiff Pozament Corp. opposes the motion. The trial of this matter is scheduled to commence on January 8, 2007.

Background

The details of this breach of contract claim need not be repeated here at length since they have been previously set forth in decisions of this court, as well as the Third Department.[FN1] Briefly, however, defendant AES operates an electrical power generating station that produces coal fly ash as a waste by-product at its plant in Johnson City, New York. The parties entered into an agreement on July 1, 2000 in which defendant AES agreed to pay plaintiff Pozament to remove coal fly ash from defendant AES' plant. The original term of this contract was from July 2000 through June 30, 2002, while the renewal term was from July 1, 2002 through December 2004.

It is undisputed that plaintiff never provided a written reminder to defendant regarding the renewal term. By way of this motion, defendant argues it was entitled to such notice under GOL § 5-903, while plaintiff argues said provision is inapplicable to this contract. More specifically, defendant AES argues that this is a service contract because it pays plaintiff Pozament for the service of removing the coal fly ash from its premises. Plaintiff Pozament argues that this is not a contract for service, maintenance or repair to or for any real or personal property, but rather an agreement involving the transfer of title to the fly ash and thus a sale of goods.

DISCUSSION

The focus of this motion is General Obligations Law ("GOL") § 5-903 (b) which states, in pertinent part, as follows:

[n]o provision of a contract for service, maintenance or repair to or for any real or personal property which states that the term of the contract shall be deemed renewed for a specified additional period unless the person receiving the service, maintenance or repair gives notice to the person furnishing such contract service, maintenance or repair of his intention to terminate the contract at the expiration of such term, shall be enforceable against the person receiving the service, maintenance or repair, unless the person furnishing the service, [*2]maintenance or repair, at least fifteen days and not more than thirty days previous to the time specified for serving such notice upon him, shall give to the person receiving the service, maintenance or repair written notice, served personally or by certified mail, calling the attention of that person to the existence of such provision in the contract.

There is no easy way to paraphrase this provision. If applicable to this case, however, it would mean that this Agreement was not automatically renewed unless the receiver of the service (defendant AES) gave notice of termination after the provider of the service (plaintiff Pozament) gave a timely written notice reminder that there was an automatic renewal clause in said Agreement.

The parties disagree whether this is a service contract. In this court's view, this Agreement is not a service-oriented contract. The garbage analogy offered by defense counsel during oral argument is tempting, but ultimately flawed upon closer examination. Defendant AES argued that this contract should be viewed as the equivalent of a standard garbage contract in which a customer - here AES - contracts with a garbage hauler - Pozament - to remove unwanted waste. Defendant AES further argued that the fact that the garbage hauler may turn around and sell said waste does not convert the nature of the contract from a service-oriented contract to a sale of goods. Thus, defendant concludes that this Agreement is no more than a service-oriented contract involving the service of removing garbage from its premises.

It is well-settled that GOL § 5-903 must be generously read as being more inclusive than not (Telephone Secretarial Service v S.R. Sherman, M.D., 49 Misc 2d 802 [1966]; Dime Laundry Service, Inc. v 230 Apartments Corp et al, 120 Misc 2d 399 [1983]). Despite the legislature's intent to have this statutory provision be read as inclusive as possible, the terms of this Agreement clearly fall outside even an expansive reading of GOL § 5-903. This Agreement is quite particular in describing defendant's obligations relative to the quality of the coal fly ash - the supposed garbage. In fact, even the required chemical composition of the coal fly ash is set forth in the Agreement. The inclusion of details regarding the chemical composition of the coal fly ash in this Agreement establishes that defendant was aware that it played an integral part in supplying raw materials to plaintiff that would be resold in the marketplace. Moreover, the purposes for which plaintiff was to use the coal fly ash were also specifically outlined in the Agreement as flowable fill, cement manufacture, and coal mine reclamation in the "Utilization" provision of said Agreement. Stated another way, the terms of this Agreement include far too many obligations on defendant's behalf relative to the quality of this product to accept the argument that the coal fly ash was mere garbage and this Agreement merely a service-oriented contract aimed at the removal of such waste. Based upon the foregoing, the court finds that this Agreement does not fall within the purview of GOL § 5-903 and, as such, defendant AES motion must be denied.

Finally, defendant AES argued that if the court were to accept plaintiff's argument that this is not a service contract - as it now has, then this Agreement is invalid pursuant to Article 2 of the UCC which requires a contract specify the quantity of goods (UCC § 2-201). Whether the [*3]court's conclusion that this is not a service contract under GOL § 5-903 warrants dismissal of this Agreement for failure to comply with UCC § 2-201 is not before the court at this time and will be addressed if and when defendant makes such a dismissal motion.

CONCLUSION

For the reasons stated, defendant's motion for an order of preclusion prohibiting plaintiff from producing certain evidence at trial pursuant to GOL § 5-903 is DENIED. No motion costs.

The foregoing constitutes an order of the court upon which judgment may be entered according to its terms.

It is so ordered.

Dated: December 21, 2006

Binghamton, New York

s/ Ferris D. Lebous

Hon. Ferris D. Lebous

Justice, Supreme Court

ALL PAPERS SUBMITTED IN CONNECTION WITH THIS MOTION HAVE BEEN FILED, ALONG WITH THE ORIGINAL DECISION AND ORDER, WITH THE BROOME COUNTY CLERK Footnotes

Footnote 1:Pozament Corp. v AES Westover, LLC, January 26, 2005, Lebous, J., Sup Ct Broome County, Index No. 2001-2339; Pozament Corp. v AES Westover, LLC, 27 AD3d 1000 [2006].

Additional Supreme Court decisions involving this matter include the following: Pozament Corp. v AES Westover, LLC., Sup Ct, Albany County, September 21, 2001, Malone, J., Index No. 1882-01; Pozament Corp. v AES Westover, LLC., Sup Ct, Broome County, November 27, 2001, Monserrate, J., Index No. 2001-2339; Pozament Corp. v AES Westover, LLC., Sup Ct, Broome County, January 25, 2002, Monserrate, J., Index No. 2001-2339.