Greens at Half Hollow Home Owners Assoc., Inc. v Greens at Half Hollow LLC

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Greens at Half Hollow Home Owners Assoc., Inc. v Greens at Half Hollow LLC 2012 NY Slip Op 32911(U) December 5, 2012 Supreme Court, Suffolk County Docket Number: 14273-2011 Judge: Emily Pines Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] h n ~ N r w i m t : 14273-201 I x SHORT FOliM ORDER SUPREME COURT - STATE NEW YORK OF COMMERCIAL DIVISION, PART 46, SUFFOLK COUNTY Original Motion Dates: Motion Submit Date: Motion Sequence No.: Preserzt: HON. EMILY PINES J . S. C. 05-08-12; 07-17-12 09-25-2012 003 MD 004 MD I 1 FINAL [ s 1 NON FINAL GREENS AT HALF HOLLOW HOME OWNERS ASSOCIATION, INC., for itself and on behalf of the Residents of The Greens at Half Hollow, Plaintiff, -againstGREENS AT HALF HOLLOW LLC., SUFFOLK COUNTY SEWER AGENCY, COUNTY OF SUFFOLK, TOWN BOARD OF THE TOWN OF HUNTINGTON and THE TOWN OF HUNTINGTON, Defendants. Attorney for Plaintiff Richard Hainburger, Esq. Hamburger. Maxson, Yaffe. Knauer & McNally, LLI 225 Broadhollow Road. Ste 301E Melville. New York 11747 Attorney for Defendant The Greens Ronald Rosenberg. Esq. Rosenberg, Calia & Birney. LLP 100 Garden City Plaza, Suite 408 Garden City. New York 11530-3200 Attorney for DefiResp. SCSA and C o u n t m f Suffolk Suffolk County Attorney s Office Attn: Jacqueline Caputi, ACA PO Box 6 IO0 Hauppauge. New York 1 1788 Attorney for DefiResp. Town of Hunting= John Bennett Special Assistant Town Atlorney Gathnian & Bennett, LLP 191 New York Avenue Huntington. New Yoih I 1743 ORDERED that the motion for summary judgment by defendant Greens at Half Hollow 1,LC (Mot. Seq. # 003) is denied; and it is further ORDERED that the cross-motion to modify the preliminary injunction granted by this Court on October 19. 20 1 1, is denied as moot. Fclctunl and Procedural Background On May 15, 2002, in connection with the development ofcondoiiiiiiiuiiis kiiowii as the Greens at Hall Hollow ( The Greens ), S.B.J. Associates, LLC ( SBJ ) and the Suffolk County Department of Public Works, Suffolk County Sewer Agency, Suffolk County Department of Health Services, and the [* 2] ( ouiit). of Suffolk entered into a Sewage Treatment Plant Agreement ( 3 T P Agreement ). The STP Agreement recites. among other things, that SBJ is the owner of the premises on which the Greens was to be developed and that it had previously made an application to the County to construct a sewage collection, treatment and disposal facility for the Greens, which application was approved by the County. I he STI Agreement further provides, in relevant part: WHEREAS, the OWNER is desirous ofconstructing a SYSTEM . . . upon the PREMISES . . . to serve the sewage collection, treatment and disposal needs of the COMMUNITY (as defined in Article 1 of this Agreement); and * * * WHEREAS, this Agreement . . . is for the benefit of the COUNTY, the COMMUNITY and the OWNER; COMMUNITY is defined in the STP Agreement as [tlhe development consisting of 1,250 townhouse condominium units, a golf course with a club house to be constructed. The STP Agreement also states that the Whereas clauses are an integral part of the STP Agreement and shall have meaning and effect as though they were set forth at length in numbered paragraphs herein. Article 19 of the STP Agreement, provides, in relevant part: 19. Connection. A. No properties, parties, persons, corporations or other entities shall be permitted to connect to any sewerage facilities of the OWNER . . . nor to the SYSTEM . . . without the prior written consent of the COUNTY . . . The provisions of this paragraph do not pertain to the individual units which comprise the PREMISES. * * * C. In addition to any consideration paid to the OWNER for thc connection of off-site additional facilities in accordance with paragraph ( H ) above, the OWNER shall be entitled to receive from any connecting Page 2 of 13 [* 3] entity a fair and reasonable charge for the entity s proportionate share of the operation and maintenance costs of the SYSTEM. This charge shall be subject to the approval of the COUNTY. The OWNER covenants, warrants and represents that any fees, excluding that part reasonably attributable to the value of sewer line easements. collected by the OWNER pursuant to this paragraph shall be applied for the benefit of all users of the SYSTEM. D. The OWNER shall have the right to charge all users of the SYSTEM reasonable expenses for the operation and maintenance of same. The OWNER covenants, warrants and represents that such charges shall be for the benefit of all users of the SYSTEM and shall be subject to prior written approval by the COUNTY. The OWNER S right to collect such charges shall terminate at such time, if ever, as the COUNTY accepts dedication of the SYSTEM. Thereafter. SBJ sold that portion of the premises covering The Greens, including the sewage treatment plant, to Defendant Greens at Half Hollow, LLC ( GHH ). The Plaintiff/Petitioner, Greens at Half Hollow Home Owners Association, Inc. ( HOA ) commenced this hybrid actiodproceeding in 201 1, in its own capacity and in a representative capacity on behalf of all the residents and unit owners in The Greens, against GHH and Defendants/Respondents Suffolk County Sewer Agency, County of Suffolk (collectively The County ) and Town Board of the Town of Huntington and Town of Huntington (collectively The Town ). The members of the IHOA are homeowners whose homes are connected to the sewage treatment plant. The HOA seeks a declaration of the parties rights and obligations under the STP Agreement and various staitutes governing the operation of a sewage treatment plant, including the Transportation Corporations Law ( TCL ). Specifically, the HOA seeks a declaration that GHH may not impose or collect sewer charges until it complies with the requirements ofregulatory authorities, including the requirement to secure rate approval. as well as injunctive relief directing GHH to apply for rate approval. The HOA also seeks dainagcs from GHH for alleged past unlawful charges and overcharges. The Article 78 proceeding against the County and the Town seeks to compel the County and Town to approve a rate for sewer charges. 7 he Verified Amended Complaint dated July 7, 20 1 1. alleges, among other things, that the Page 3 of 13 [* 4] oLbncrship and operation ofthe sewage treatment plant by GHH violates TCL $5 2-5. 116, and 12 1 and that pursuant to article 10 of the TCL. the County and the Town are obligated to set a rate for the provision of sewage treatment and disposal services by GHH which is fair, reasonable and adequate. It is further alleged that from the time that the HOA commenced operations in 2002, GHH tendered periodic bills. without any itemization, back-up information or calculation, to the HOA for seTwage services provided to the condominium units and residents of Ihe Greens. The HOA alleges that it paid in full, on behalf of its members, all sewer charges invoiced to it by GHH for the sole purpose of covering GHH s maintenance and operating costs of the sewage treatment plant. Additionally, it is alleged that GHH, through the appointment of a majority of the IHOA board members, was in control ofthe HOA f rom 2002 until December 2009. As of July 20 1 1, the sewer charges from GHH to the HOA were $55,106.55 per month. The HOA alleges, among other things, that GHH breached: (1) paragraphs I9(C) and 19(D) of the STP Agreement, and violated TCL 2 12, by billing and collecting for sewage services without obtaining approval of its rate from the County or the Town, (2) paragraph 19(C) of the STP Agreement by charging a rate in excess of a fair and reasonable charge for the [HOAI s proportionate share of the operation and maintenance costs of the system, (3) paragraph 19(D) of the STP Agreement by charging the users of the system more than its reasonable expenses for the operation and maintenance of the SYSTEM, and (4) that GHH violated TCL 5 121 by providing sewage-works facilities at a rate in excess of that which is fair, reasonable and adequate. The Verified Amended Complaint contains five causes of action and one cause for proceeding. The first cause of action is asserted against GHH, the County and the Town, and seeks a declaration that GHH violated various provisions of the TCL, Limited Liability Corporations Law 4 201, and various paragraphs of the STP Agreement, as well as a declaration that GHH . . . may neither discontinue the operation ofthe sewage treatment plant, nor reduce or otherwise diminish its level of service for so long as GHH . . . owns the sewage treatment plant and that [the HOA] has no obligation to pay sewer charges to GHH until: (a) GHH obtains approvals from the Town . . . and [the County] to own and operate the private sewer treatment plant and serve the premises; (b) GHH has reorganized as a sewageworks corporation under Article X of the [TCL]; (c) GHH s sewer rates are duly approved by the Town . . . and the [the County]; and (d) GMH places its stock in escrow with [the County]). The second cause of action is asserted against GHH for monies had and received and seeks restitution from GHH in an amount q u a l to the total of all sewer rates previously paid by the HOA to GHH, alleged to be in excess of $3,000,000. The third cause of action is asserted against GHH for breach of contract (STP Agreemciit). and alleges that the HOA has been damaged, as a third-party beneficiary, in an amount equal to the difference between the total sum that the HOA has paid to GHH in sewer rates, and the 1 IOA s proportionate share or the actual verified and approved operational and maintenance costs for the sewage treatment plant for that same period, alleged to be in excess of$1,500,000. The HOA also Page 4 of 13 [* 5] scchs an injunction restraining GNI1 from transferring the sewage treatment plant prior to the issuance ofappro\rals by the County and DEC, as per the STP Agreement. The fourth cause of action, pled iin the altcrnati\)c to the third cause of action for breach of contract, is asserted against GHH for unjust enrichment based upon GHH s collection of sewer charges from the HOA without lawful authority. T h e fifth cause ofaction is asserted against GHH for unjust enrichment by the HOA s payments to the South I Iuntington Water District for charges and services relating to accounts which exclusively serve the sewage treatment plant. The cause for proceeding is asserted against the County and the Town as mandamus to coinpel the County and the Town to perform duties enjoined upon them by law under the TCL, and STP by setting a rate for the sewage treatment and removal services provided by GHH to the MOA. GHH served an Answer and Counterclaim seeking injunctive relief. The HOA served a Verified Reply to the counterclaim. GI I14 moved for a preliminary injunction and separately made a pre-answer motion pursuant t o CPLR 321 l(a)(l) and (7) to dismiss the complaint as asserted against it. In support of its motion to dismiss. GHH argued, among other things, that there is no private right of action under the TCL and that the third cause of action must fail since HOA is not a third-party beneficiary of the STP Agreeineint as a matter of law and cannot state a claim for breach of that agreement, but is merely an incidental beneficiary of the Agreement. GHH contended that the paragraphs 19(C) and (D) of the STP Agreement do not confer any benefit on the HOA or its residents. The foregoing issues were raised extensively at oral argument on the motions before the Court on October 19, 20 1 1, at which time the I-IOA voluntarily discontinued the fifth cause of action without prejudice. At oral argument, the County took the position that the unit owners are third-party beneficiaries of the STP Agreement. I n its decision and order, placed on the record following oral argument, the Court granted GHH s motion for a preliminary injunction and denied GHH s motion to dismiss stating, in relevant part: So I am granting the preliminary injunction pending what happens with the [County]. I am also denying the motion to dismiss. I do believe based upon everything that I have read and heard that the [HOA] has standing to bring this action based upon its demonstration that it is a third-party beneficiary of the agreement. And I have to say that I also am very influenced in this decision by the statement of Suffolk County and the Town, who are not interested parties in this dispute. They are neutral with regard to this issue, and that is very significant to the Court. Page 5 of 13 [* 6] * * * I wish to say here that the Wild Oaks case that was cited in [GIItI's] brief, I agree with [HOA's counsel]. is inapplicable because there was in that case a gap in the legislation and. again, a statement that summary judgment was denied, and I don't - I think it's a distinction without a difference with regard to the connection in that case and the long-standing rates in this case. Obviously, there was implied in the denial of summary judgment a determination by that Court that the plaintiff in that case did have standing because - and state that there was a private right of action with regard to, in that case, the connection rate absent a municipal rate. And, in this case, it sounds like the County, which is in charge of these rates, agrees with the Court. This Court issued a short form order dated October 24,20 1 1, reflecting its decision grantin,pthe preliminary injunction and denying the motion to dismiss. GHH served and filed a notice of appeal from this Court's order dated October 24,201 1, but subsequently withdrew the appeal in May 2012. GHH now moves for (1) summary judgment dismissing the complaint as asserted against it, (2) staying this action pending a determination by the County of its approval or disapproval of the sewer rate charged by GHH, and (3) alternatively, for aprotective order limiting the scope of discovery. In support ofthe motion GHH submits, among other things, an affidavit from Steven Kaplan, a member of GHH. In his affidavit, Icaplan recites the factual background of the Greens development pro-ject. Additionally hc states, among other things, that each of the offering plans for the condominiums disclosed the anticipated sewer rates to be charged for each type of unit, which were based on the assessed value of the units and calculations provided by SBJ's engineers, who allegedly used a formula provided by soineonc from the Suffolk County Department of Public Works Revenue Office. Kaplan states that each ol'the unit owners entered into a Purchase Agreement agreeing to be bound by the terms of the Offering Plan. including the sewer rates disclosed therein. Kaplan points out that Paragraph 7 of each Purclhase Agreements provides, in relevant part: "Purchaser Bound by Offering Plan. The Seller has exhibited and delivered to the Purchaser and the Purchaser acknowledges receipt ofthe Offering Plan at least 72 hours prior to the execution of this Purchase Page 6 of 13 [* 7] Agreement and has read and agrees to be bound by the proposed Declaration, By-Laws and Offering Plan of the said Condominium and the Declaration of Covenants, Restrictions, Easements. Charges and Liens and Association By-Laws (and the Schedules. Plans and Exhibits attached thereto) all of which are incorporated by reference and made a part ofthis agreement with the same force and effect as if set forth in full herein . . . The Purchaser acknowledges . . . that, except as stated in this agreement ( and as set forth in the Declaration, By-Laws, Exhibits and Olfering Plan), it has not relied on any representations or other statements of any kind or nature made by the Seller, and representatives of Seller, or otherwise, including but not limited to any relating to . . . the estimated common charges or other expense in connection herewith. Kaplan also cites to paragraph 39 of the Purchase Agreement which states, in relevant pai-t: 39. Entire Agreement. This agreement states the entire understanding of the parties and the Seller shall not be bound by any oral representations and/or agreements made by Seller, its agents or representatives. Based on the foregoing provisions of the Purchase Agreements, Kaplan contends that every unit owner agreed to pay the sewer rates disclosed in the Offering Plan and to be bound thereby. He states further that the sewer rates disclosed in the Offering Plans and charged to the HOA since the units were first completed are virtually the same as are still being charged today. As of June 23,2008, the estimated annual sewage disposal cost for 1,144 units was $646,100.00, amounting to a monthly cost of $53,841.67. As of March 2012, GHH charged the HOA $55,000 per month. According to Kaplan, although the STP Agreement states that the sewer rates are subject to the approval of the County, at no time did the County ever seek to review or approve the rates or object to the rates being charged or ask GHH about the cost of operating the sewage treatment plant. However, Kaplan acknowledges that after the HOA served its Verified Amended Complaint dated July 7, 201 1, the County began the process of reviewing GHH s records and other information to enable it to either approve or disapprove the rate charged by GHH. GI I1 I argues, among other things, that the entire action should be dismissed because the terms Page7of 13 [* 8] of the individual Purchase Agreements between the unit owners and GHH govern the amount of sewer rates. G ¬IHclaims that each unit owner agreed to the rates disclosed in the Offering Plans, the terms ofwhich were incorporated into the Purchase Agreements. Thus. GHH contends that the claims asserted by the HOA i n this action are barred. GHH also argues that the HOA s claim for breach of the STP Llgreement should be dismissed because the HOA is not a third-party beneficiary to the STP Agreernent and, even if it is a third-party beneficiary, language in paragraph 19 ofthe STI Agreement indicates that it does not apply to the unit owners. In any event, GHH contends that it did not have any obligation under the S IP Agreement to apply to the County for approval of the sewer rates. .4dditionally, GHH argues that New York s Transportation Corporations Law is inapplicable becausc GHH is not a transportation corporation and, even if the 1 CL is applicable, it does not permit a private right of action. Accordingly, GHH contends that the HOA s claims alleging violation of the TCL should be dismissed as a matter of law. Alternatively, GHH argues that this action should be stiiyed pending the County s review ofthe sewer rates. Alternatively, GHH asserts that the Court should issue a protective order limiting the scope of discovery to those documents and information provided to the County in connection with its review of the sewer rates. In opposition to GHH s motion, the County submits, among other things, an affidavit from John Donovan, P.E., Chief Engineer in the Sanitation Division of the County s Department of Public Works. In his affidavit Donovan states, among other things, that the County was in the process of reviewing the sewer rates charged by GHH. He further states, in contradiction to Kaplan s assertion, that DPW does not give developers a formula to calculate sewer rates and that DPW records do not show that any [ormula was given to GHH. Donovan adds that a final determination of the reasonableness of the rates charged by GHH cannot be made until the County s review is complete. The Town joined in the opposition to GHH s motion for summaryjudgment submitted by the County. The TIOA opposes GHH s motion for summary judgment and cross-moves for an order modi tying the preliminary injunction by reducing the amount of the HOA s monthly payment to GHH for sewer chargcs and increasing the amount of the undertaking posted by GHH. The HOA argues, among other things, that the Offering Plans specifically state that the sewer rates disclosed therein were estimates subject to review and approval by the County in accordance with the STP Agreement, of which the unit owners are third-party beneficiaries. Additionally, the HOA contends that GHH is now inaking many oftlie same legal arguments that it made in support ofits prior motion to dismiss, which were ruled on by this Court and are now law of the case sincc GHH withdrew its appeal. Specifically, the HOA argues that in denying GHH s motion to dismiss, this Court held that the HOA has standing to maintain this action as a third-party beneficiary of the STP Agreement and that the HOA can maintain a private right of action under the TCL. In any event, the HOA argues that its members are Page 8 of 13 [* 9] expressly identified in the STP Agreement as third-party beneficiaries and that a private action can be maintained under the TCL. Additionally, the HOA asserts that, on its face, paragraph 19(C) ofthe S TP Agreement applies to the unit owners of the Greens and that the provision in paragraph 19(A) stating that . [t]he provisions of this paragraph do not pertain to the individual units which comprise the PIIEMISES only applies to paragraph 19(A) and in no way affects the application of paragraph 19. With regard to GHH s argument that the HOA s claims are barred by the terms ofthe Offering points out that its claims are based on GHH s breach of the STP Agreement, not the Plans, the ¬10.4 Offcring Plans, and that the rates disclosed in the Offering Plans were only estimates. With regard to the fourth cause of action for unjust enrichment, the HOA recognizes that it cannot recover on both the breach of contract and unjust enrichment claims but it states that the unjust enrichment cause of action is explicitly pled in the alternative to the breach of contract claim and, therefore, should not be dismissed. Additionally, the HOA argues that there is no basis for a stay pending a determination by the County and that the branch of GHH s motion seeking a protective order should be referred to a conference before the Court. TheHOA makes numerous arguments in support of its cross-motion to modify the preliminary inunction and increase the undertaking posted by GHH and GHH makes numerous arguments in opposition thereto. Nevertheless, by letter dated October 17, 2012, approximately three weeks after the instant motion and cross-motion were marked submitted on this Court s calendar, counsel for the IHOA advised the Court that (1) the County had issued a sewer rate determination on October 12,2012, (2) that the HOA believed that the preliminary injunction automatically dissolved upon the issuance of the County s determination, and (3) the County s rate determination moots the HOA cross-motion and that it therefore has no objection to the denial ofits cross-motion as moot. Attached to the October 1 71hletter is a copy of a letter dated October 12, 2012, from Gilbert Anderson, P.E. Commissioner of the County s DPW and Chairman of the Suffolk County Sewer Agency, to counsel for the HOA and GHH stating, in relevant part: After an examination of documentation provided by the STP operator, relating to operation and maintenance of the Greens at Half I Iollow Sewage Treatment Plant from the years 2004 through 20 1 1, the Suffolk County Department of Public Works determines that the charges presently attributed to the Greens at Half Hollow Homeowner s Association are not fair and reasonable. Therefore, this Department does not approve the current charges. Based on this Department s analysis, a rate of $270 (per SFE Page 9 of 13 [* 10] [Single Family Equivalent. (225 GPD per unit)] annually for entities connected to the sewage treatment plant has been determined to be fair and reasonable. ln response to the letter from the HOA s counsel, counsel for GHH subniitted a letter to the Court dated Novcmber 5, 2012, stating, among other things. that it is GHH s position that the preliminary iii.junctioii did not dissolve automatically when the County rendered its determination. I n reply to the HOA s arguments in opposition to its motion for summary judgment, GHH contends. among other things, that this Court s prior order denying GHH s motion to dismiss is inot law of the case because GHH s prior motion was addressed only to the sufficiency of the pleadings and not to the merits. Thus, GHH argues that this Court s prior order did not determine that the HOA has standing as a third-party beneficiary but rather on that the HOA had sufficiently alleged it vvas a third-party beneficiary of the STP Agreement. Discussion A party moving for summary judgment has the burden of making a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence demonstrating the absence of Med. Ctr., 64 NY2d 85 [ 19851; Zuckerman any inaterial issues of fact (Winegrad v. New York Univ. v. Cily of New York, 49 NY2d 557 [1980]). Once a prima facie showing has been made by the movant, the burden shifts to the party opposing the motion to produce evidentiary proof in admissible form sufficient to establish material issues of fact which require a trial (see, Zayas v. HalfHollow Hills C ent. L ?choo/Dist., 226 AD2d 7 13 [2nd Dept. 19961). However, the movant s failure to establish prima facie entitlement to judgment as a matter of law requires the denial of the motion, regardless of the sufficiency oftlie opposition papers (see Thompson v. Horwitz, -AD3d -, 2 0 12 NY Slip Op 07983 [2d Ilept 201 21). Once a point is decided within a case, the doctrine of the law of the case makes it binding riot only on the parties, but on the court as well: no other judge of coordinate jurisdiction may undo the decision (Siegel, NY Prac tj 448 [5t ed 20121). The doctrine of law ofthe case applies only to legal determinations that were necessarily resolved on the merits in the prior decision (Gilligan I) Reers, 355 AD2d 486,487 [2d Dept 19981 quoting Baldasano v Bank qfN. Y , 199 AD2d 184, 185 [ lSfDept 1 1931). Here. in deciding GHI-1 s prior motion to dismiss, this Court specifically determined, among other things, that the HOA has standing to maintain this actiordproceeding as a third-party to the SlrP Page 10 of 13 [* 11] Agrecnient and under the Transportation Corporations Law. Therefore, GNH is precluded by the doctrine of law of the case from re-litigating these issues in the context of the instant motion for summary judgment (see ih orcin Enter , lnc. v Hurst, 96 AD3d 9 14 [2d Dept 20 121; Springwell h uv. ( or.p Sunliiis C orporucion. S A . , 99 AD3d 482 [lstDept 20121; Granu v. Security Ins. Grp., 72 Misc2d 265, 266 [Sup Ct, Monroe County 19721). GHH s contention that the doctrine of law of the case is not applicable because its prior motion was only addressed to the sufficiency ofthe pleadings is without merit. Although the law of the case doctrine is inapplicable to the denial of a motion to dismiss under CPLR 321 l(a)(7) for failure to state a cause of action (see Tenzer, Greenblatt, Fallon & Kuplcin Cupri Jewelry, Inc., 128 AD2d 467 [ lstdept 1987]), GHH s prior motion was not made only under CPLR 321 l(a)(7). Rather, GHH also moved under CPLR 321 l(a)(l) and made many of the same arguments that it now makes in support of its motion for summary judgment, including that the HOA is not a third-party beneficiary to the STP Agreement and that the I-IOA cannot maintain a private right of action under the TCL. Both ofthese arguments were specifically rejected by this Court in its decision and order on the record on October 19,2011. Therefore, the doctrine of the law of the case prevents GHH from making the same arguments in support of its subsequent motion for summary judgment. 19 19 In any event, GHH has failed to make a prima facie showing of entitlement to judgment as a matter of law dismissing the complaint as asserted against it. In support of its argument that the HOA is not a third-party beneficiary of the STP Agreement, GHH relies on, among other things, the language of the STP Agreement. However, the STP Agreement specifically states that it was entered into for the benefit of the . . . Community, which is defined in the STP Agreement as [tlhe development consisting of 1,250 townhouse condominium units, a golf course with a club house to be constructed. Thus, GHH s moving papers do not establish, as a matter of law, that the HOA is not a third-party beneficiary of the STP Agreement. Moreover, contrary to GHH s contention, the language of the Purchase Agreements does not establish. as a mattcr of law, that the HOA s third cause of action for breach of the STP Agreement lacks merit. h e elements of a cause of action for breach of contract are (1) the existence of a contract between plaintiff and defendant, (2) performance by the plaintiff, (3) defendant s failure to perform, and (4) damages resulting from such failure to perform (see Fuviu v. Furicr, 116 AD2d 694 [2d Dept. 19861). The STP Agreement clearly imposes additional obligations on GHH with regard to the operation of the sewage treat plant. GHH has not made a prima facie showing that it complied with its obligations under the STP Agreement. Moreover, as repeatedly pointed out by the HOA, the Purchase Agreements and Offering Plans specifically state that the sewer rates disclosed therein are estimates. Contrary to GHH s contention, the fact that each unit owner agreed to the estimated sewer r a t a disclosed in the Offering Plans does not negate GHH s obligations under the STP Agreement. Page 11 of 13 [* 12] ikklitionally. GI111 has not established, as a matter of law. that paragraph 19 of the STP Agreement, in its entirety. does not apply to the HOA. Rather, on its face. the exclusion contained in paragraph 19(iZ) 0 1 ~ STP Agreement appears to be limited in its applicability to the provisions of paragraph the 19(A). and not the remainder of paragraph 19. Therefore. GHH has not established entitlement to s~inimary judgment . Similarly. GHH has not made a prima facie showing of entitlement to summary judgment dismissing thc second cause of action for money had and received or the fourth cause of action for imjust enrichment. The essential elements o f a claim for money had and received are: (1) defendant received money that belongs to plaintiff; (2) from which defendant received a benefit; (3) which in equity and good conscience defendant should not be permitted to keep (Aaron Ferer & Sons Ltd. v ( hu.ce Munha/lun Bank Nat. ASSM., 1 F2d 1 12, 125 [2d Cir 19841). The action depends upon 73 cquitable principles in the sense that broad considerations ofright, justice and morality apply to it, but it has long been considered an action at law (Board o Educ. of the Cold Spring Harbor Cent. Schiool f Dist 17 Rettuliata, 78 NY2d 128, 138 [1991]). TOprevail on a claim of unjust enrichment, a party must show that (1) the other party was enriched, (2) at that party s expense, and ( 3 ) that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered (Anesthesia Assocs. ofMount Kisco, LLP v Northern Westchester Hosp. Ctr., 59 AD3d 473,481 1-2d Dept 20091, quoting Citibank, N.A. v Walker, 12 AD3d 480,481 [2d Dept 20041, quoting Paramount Filnz Distrih Cory. vState ofNew York, 30NY2d 415,421 [1972], cert denied414 US 829 [1973]). Where there is a bona fide dispute as to the existence of a contract governing the dispute in question, a party is not precluded from proceeding on both breach of contract and quasi-contractual theories (see Plwnitallo \ Hudson Atlantic Land Co., LLC, 74 AD3d 1038, 1039 [2d Dept 20101; AHA Sales, Inc. C rea/ii.e Bath Products, Inc., 58 AD3d 6, 20 [2d Dept 20081). 19 Here, there is a bona fide dispute between the parties as to whether the sewer rates charged by GHT-I to the HOA are governed by the terms of the Purchase Agreements alone or whether the STP Agreement obligated GHH to apply to the County for approval ofthe sewer rates. Accordingly, ithe I IOA is not precluded from proceeding with its causes of action based on the quasi-contract theories of moncy had and received and unjust enrichment. Ultimately, the HOA cannot recover on both its breach of contract claim and its quasi-contractual claims but, at this point, it has not been demonstra1.ed hy GHtl. as a matter of law, that there is a valid enforceable contract between the parties that governs the dispute over the sewer rates. Thus, summary judgment dismissing the second and fourth causes ol action is not appropriate. Tliat branch of GHH s motion seeking a stay of this action pending a determination by the County of its approval or disapproval of the sewer rate charged by GHH is denied as moot, since the Page 12 of 13 [* 13] Count) madc such a determination on October 12, 2012. Pursuant to Rule 1 l(c) of the Rules of the Commercial Division of the Supreme Court (22 NYCRR $ 202.70), that branch of GHH's motion seeking a protective order limiting the scope of discovery is referred to a preliminary conference before the Court to be held on December 10,2012. Finally, the HOA's cross-motion for an order modifying the preliminary injunction is denied as moot since the preliminary injunction, which was granted "pending what happens with the [County]." automatically expired, by its terms, when the County issued its determination on October 12.2012. This constitutes the DECISION and ORDER of the Court. c + Dated: December 5,2012 Riverhead, New York XMILY PINES J. S. C. [ ]FINAL [ x ] NON FINAL Page 13 of 13

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