Lopez v Platinum Volkswagen

[*1] Lopez v Platinum Volkswagen 2015 NY Slip Op 51444(U) Decided on September 25, 2015 Appellate Term, Second Department 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 25, 2015
SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 9th and 10th JUDICIAL DISTRICTS
PRESENT: : IANNACCI, J.P., MARANO and GARGUILO, JJ.
2014-206 N C

Jacqueline Inez Lopez, Respondent,

against

Platinum Volkswagen, Appellant, -and- Josh Lever, Defendant.

Appeal from a judgment of the District Court of Nassau County, First District (Eric Bjorneby, J.), entered November 12, 2013. The judgment, insofar as appealed from, after a nonjury trial, awarded plaintiff the principal sum of $2,762.34 as against defendant Platinum Volkswagen, sued herein as Platinum Volkswagon.

ORDERED that the judgment, insofar as appealed from, is reversed, without costs, and the matter is remitted to the District Court for a new trial limited to the issue of whether, in the circumstances presented, defendant's sales manager, John Morgan, obligated defendant to make the remaining lease payments on plaintiff's Infiniti vehicle; and it is further,

ORDERED that the Clerk of the District Court of Nassau County, First District, or his designee shall amend the caption of the judgment to reflect defendant Platinum Volkswagen's correct name.

In this small claims action, insofar as relevant to this appeal, plaintiff seeks to recover the principal sum of $5,000, based on the failure of Platinum Volkswagen (defendant), sued herein as Platinum Volkswagon, to make certain car lease payments to her prior lessor on her behalf. At a nonjury trial, plaintiff testified that, on July 27, 2012, shortly after her boyfriend, Michael Baker, had been hired as a salesman by defendant, she leased a Volkswagen automobile from defendant. At the time, there remained five months on plaintiff's lease of an Infiniti vehicle from a different lessor. Plaintiff turned the Infiniti over to defendant, which surrendered it on her behalf to her Infiniti lessor. Plaintiff contended that, as part of the agreement for the 36-month lease of the Volkswagen, defendant had orally undertaken to make the remaining lease payments on the Infiniti. In September 2012, however, plaintiff received a bill from her Infiniti lessor for, among other things, the remaining five payments on her lease of that vehicle.

By December 4, 2012, Baker no longer worked for defendant. That day, following work, John Morgan, who was defendant's sales manager at the time and a social acquaintance of plaintiff and Baker, went to plaintiff's home and delivered a note he had written by hand on [*2]defendant's letterhead and had signed as defendant's sales manager. The writing stated that defendant would make the remaining rental payments on plaintiff's lease of the Infiniti. Defendant failed to make any such payments.

The documents introduced into evidence concerning plaintiff's July 27, 2012 lease of the Volkswagen included a lease order, a lease agreement, and an addendum. None of those documents included an obligation for defendant to make the remaining payments on the Infiniti lease. The lease agreement included a merger provision directly above the signature line, which stated:

"Entire Agreement. Your and our entire agreement is contained in: (a) this Lease; and (b) any related agreement between you and us about conditions that must be satisfied after delivery of the Vehicle. There are no unwritten agreements regarding this Lease. Any change to this Lease must be in writing and signed by you and by us."
The addendum included a paragraph which contemplated the possibility that, where a customer of defendant had remaining obligations on a prior lease of a car from a different lessor, defendant, as part of a new lease with the customer, might assume responsibility for specific payments due to the customer's prior lessor. That paragraph had been crossed out. Plaintiff confirmed that she had signed both the lease agreement and the addendum bearing the crossed-out paragraph.

Baker and Morgan both testified on plaintiff's behalf. They stated that defendant had undertaken to make the final payments on the Infiniti lease, and disputed the authenticity of plaintiff's signature on the lease and the addendum. Morgan further testified that the documents could not be genuine because, as sales manager, he had routinely signed all lease orders, but that the lease order that had been introduced into evidence did not contain his signature. Morgan also asserted that, upon investigation, he had discovered that someone had tampered with the folder in which the contract documents had been stored. He said that he had prepared and delivered the December 4, 2012 writing because it correctly stated the parties' agreement. (It is noted that plaintiff's testimony that she had signed the documents in evidence belied Baker's and Morgan's claims concerning the inauthenticity of the lease agreement and the addendum.)

Following the trial, the District Court awarded a judgment, insofar as is relevant to this appeal, in favor of plaintiff as against defendant in the principal sum of $2,762.34.

In a small claims action, our review is limited to a determination of whether "substantial justice has . . . been done between the parties according to the rules and principles of substantive law" (UDCA 1807; see UDCA 1804; Ross v Friedman, 269 AD2d 584 [2000]; Williams v Roper, 269 AD2d 125 [2000]). Furthermore, the determination of a trier of fact as to issues of credibility is given substantial deference, as a trial court's opportunity to observe and evaluate the testimony and demeanor of the witnesses affords it a better perspective from which to assess their credibility (see Vizzari v State of New York, 184 AD2d 564 [1992]; Kincade v Kincade, 178 AD2d 510, 511 [1991]). This deference applies with greater force to judgments rendered in the Small Claims Part of the court (see Williams v Roper, 269 AD2d at 126).

"It is well settled that a contract is to be construed in accordance with the parties' intent, which is generally discerned from the four corners of the document itself. Consequently, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms' " (MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640, 645 [2009], quoting Greenfield v Philles Records, 98 NY2d 562, 569 [2002]). "[A]bsent fraud or mutual mistake, where the parties have reduced their agreement to an integrated writing, the parol evidence rule operates to exclude evidence of all prior or contemporaneous negotiations between the parties offered to contradict or modify the terms of [*3]their writing" (Marine Midland Bank-S. v Thurlow, 53 NY2d 381, 387 [1981]; see also NRT NY, LLC v Laffey, 103 AD3d 861 [2013]; Dong Won Kim v Frank H. Truck Corp., 81 AD3d 586 [2011]). We note that the parol evidence rule is one of substantive law and not a rule of evidence (see Unisys Corp. v Hercules, Inc., 224 AD2d 365, 368 [1996]), and, thus, it applies in small claims actions (see UDCA 1804; see also Locke v Nathanson, 16 Misc 3d 133[A], 2007 NY Slip Op 51500[U] [App Term, 9th & 10th Jud Dists 2007]; Yoo v Piano Post Inc., 6 Misc 3d 59 [App Term, 9th & 10th Jud Dists 2005]). Consequently, here, in light of plaintiff's admission that she signed the lease agreement and the addendum, and in view of the lease agreement's merger clause, defendant correctly argues that the testimony of plaintiff as to prior or contemporaneous negotiations, including any alleged oral promise by defendant to pay for plaintiff's remaining lease payments due to her Infiniti lessor, was not admissible to contradict or modify these documents, or to impose additional obligations on defendant.

Notwithstanding the foregoing, plaintiff argues that defendant is, in any event, bound to honor the commitment contained in the December 4, 2012 writing, executed by defendant's sales manager, which obligated defendant to pay for plaintiff's remaining Infiniti lease payments. Defendant responds that the writing dated December 4, 2012 was inadequate to impose liability on defendant because it was not supported by consideration. However, no consideration is required in order for an agreement modifying a lease contract to be binding (see UCC 2-A-208 [1]; see also Clark Oil Trading Co. v Aron & Co., 172 Misc 2d 552, 557 [Sup Ct, NY County 1997]). While the lease agreement required that any change to the lease must be in writing and signed "by you and by us" (see UCC 2-A-208 [2]), in this context defendant was, in effect, the party to be charged, and the writing was signed by Morgan, who was defendant's sales manager. Thus, the only potential bar to enforcement of the December 4, 2012 writing was the issue of whether Morgan had the express, implied or apparent authority to modify defendant's existing agreement by obligating defendant to make plaintiff's remaining lease payments on the Infiniti.

The testimony of defendant's owner was uncontroverted, that Morgan had lacked the actual authority, either express or implied, to enter into the December 4, 2012 written promise. Nevertheless, Morgan, as defendant's "sales manager," had the actual authority to enter into original contracts and, clearly, under the circumstances presented, at the very least had the apparent authority to modify contracts on behalf of defendant. However, "[a]n agent's power to bind his principal is coextensive with the principal's grant of authority. One who deals with an agent does so at his peril, and must make the necessary effort to discover the actual scope of authority" (Ford v Unity Hosp., 32 NY2d 464, 472 [1973]; accord ER Holdings, LLC v 122 W.P.R. Corp., 65 AD3d 1275, 1277 [2009]; Fitzgibbon v Abatelli Real Estate, 214 AD2d 642 [1995]). Thus, plaintiff was entitled to rely on Morgan's apparent authority to modify the existing lease agreement by executing the December 4, 2012 written promise only to the extent that such reliance was reasonable under the circumstances (see Hallock v State of New York, 64 NY2d 224, 231 [1984]; see also Marshall v Marshall, 73 AD3d 870, 871 [2010]).

Whereas plaintiff had received all the prior documents respecting the lease agreement at defendant's dealership, and the documents employed printed forms, the December 4th writing was scrawled in handwriting and was delivered to plaintiff's residence. Moreover, it had been established at trial that Morgan was a social acquaintance of plaintiff.

These circumstances raise a question of fact as to whether plaintiff was entitled to rely on the December 4th written promise, and as to whether defendant, consequently, had any enforceable obligation to make the final five lease payments on the Infiniti vehicle. As the District Court did not issue a written decision, it cannot be determined whether the court addressed or resolved this question. We therefore find that so much of the judgment as is in favor of plaintiff and against defendant failed to render substantial justice between the parties according to the rules and principles of substantive law (see UDCA 1804, 1807), and that a new trial is required, limited to the issue of whether, in the circumstances presented, plaintiff was entitled to rely on Morgan's apparent authority to bind defendant to make the remaining [*4]payments on the Infiniti.

Accordingly, the judgment, insofar as appealed from, is reversed, and the matter is remitted to the District Court for a new trial, limited to the issue of whether, in the circumstances presented, Morgan obligated defendant to make the remaining payments on the Infiniti to plaintiff's prior lessor.

We note that the caption of the judgment and the other court papers do not correctly state defendant's name. The Clerk of the District Court of Nassau County, First District, or his designee is directed to amend the caption of the judgment and theother papers to reflect defendant's name as Platinum Volkswagen (see CPLR 5019 [a]; see also UDCA 1814), and the caption of the appeal has been so amended.

Marano and Garguilo, JJ., concur.

Iannacci, J.P., dissents in a separate memorandum.

SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE TERM : 9th and 10th JUDICIAL DISTRICTS
PRESENT : IANNACCI, J.P., MARANO and GARGUILO, JJ.
JACQUELINE INEZ LOPEZ,

Respondent,

against-

NO. 2014-206 N C

DECIDED

PLATINUM VOLKSWAGEN,

Appellant,

and-

JOSH LEVER,

Defendant.

Iannacci, J.P., dissents and votes to affirm the judgment in the following memorandum:

I agree with the majority's analysis that the December 4, 2012 writing would be effective to obligate defendant to make the final payments on plaintiff's lease of the Infiniti so long as plaintiff could reasonably rely on Morgan's apparent authority, as sales manager, to modify the parties' existing written agreement and to incur such

obligation on defendant's behalf. I disagree, however, with the majority's conclusion that the issue of whether plaintiff was reasonably entitled to rely on Morgan's apparent authority was unresolved, and that a new trial is therefore required. In my view, by its judgment in favor of plaintiff, the District Court implicitly found that, in the circumstances presented, plaintiff's reliance on Morgan's apparent authority was reasonable. As I am further of the opinion that this conclusion was supported by a fair interpretation of the evidence and, thus, that the judgment rendered substantial justice between the parties according to the rules and principles of substantive law (see UDCA 1804, 1807), I do not believe that the judgment should be disturbed.

Accordingly, I vote to affirm the judgment.

Decision Date: September 25, 2015