UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

_____________________

No

 07 Civ. 3345 (RJS)

_____________________

NATIONAL UTILITY SERVICE, INC.,

Plaintiff,

VERSUS

TIFFANY & CO. and TIFFANY AND COMPANY,

Defendants.

___________________

MEMORANDUM AND ORDER

March 20, 2009

_____________________

RICHARD J. SULLIVAN, District Judge:

Plaintiff National Utility Service, Inc.

(“NUS”) brings this diversity action alleging

breach of contract, quantum meruit, and

unjust enrichment, and seeks damages,

specific performance, and declaratory relief.

Specifically, NUS alleges that Defendants

Tiffany & Co. and Tiffany and Company

(collectively, “Tiffany”) failed to adhere to

the terms of a utility cost consulting

agreement.1

 Tiffany counterclaims for

identical causes of action.

Before the Court are the Parties’

respective cross-motions for summary

judgment. For the reasons that follow, both

motions are denied in part and granted in

part.

1

 Tiffany and Company is a subsidiary of Tiffany &

Co. (See Pl.’s 56.1 ¶ 8.) 

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 1 of 12
2

I. BACKGROUND

A. Facts2

NUS is an “energy cost consulting

service.” (Pl.’s 56.1 ¶ 2.) NUS provides

consulting services with regard to reducing

its clients’ expenditures for energy and utility

costs. (See Defs.’ 56.1 ¶ 1; Pl.’s 56.1 ¶¶ 2-

4.) Tiffany retained NUS by a written

contract (the “contract”) signed in April

1992. (Defs.’ 56.1 ¶ 2; see also Mitchell

Decl. Ex. 1 (the contract).) The contract, in

relevant part, provides that:

1. We [Tiffany] hereby authorize you

[NUS] to submit recommendations

for savings and refunds on our costs

of electricity, gas, oil and petroleum

products, water, sewerage, steam and

telecommunications. You will

analyze our costs and advise where

refunds and reductions can be

obtained. 

2. Your initial analysis will cover our

most recent twelve (12) months’ bills.

Where applicable, you will review

old bills as far back as possible for

refunds. Your continuing analysis

will cover our current bills, which we

will send to you each month during

the term of this agreement. 

3. Any recommendation you make

will be considered by us and shall be

subject to our approval. If any

recommendation made by you is

subsequently implemented, we will

pay you as outlined below after such

savings and refunds are achieved. . . .

5. We agree to pay you as follows:

a. A service fee of $12,000.00 is

due to you on acceptance of this

agreement, and is payable only

once for the term of this

agreement and all consecutive

renewals. 

b. A performance fee of: (i) fifty

(50%) percent of each refund

realized; (ii) fifty (50%) percent

of each savings realized for a

period of sixty (60) months after

which the entire savings will be

ours.

c. Payment will be made upon

receipt of your invoice showing

computation of savings and/or

refunds.

(Mitchell Decl. Ex. 1.)

For fifteen years, no dispute arose under

the contract. (Defs.’ 56.1 ¶ 5.) During that

time, Tiffany paid NUS fees for the various

services performed. (See id.; see also

Mitchell Decl. Ex. 13 (providing a

spreadsheet setting forth the history of

recommendations made by NUS to Tiffany).)

In total, NUS made approximately ninety-six

recommendations for Tiffany’s various

facilities during the course of the Parties’

relationship. (Pl.’s 56.1 ¶ 33.) 

2

 The following facts are recited for purposes of

background with respect to the summary judgment

motions only, and are taken from the pleadings, the

Parties’ respective Local Rule 56.1 statements, and

affidavits and exhibits submitted by the Parties. The

facts are undisputed unless otherwise noted. Where

only one Party’s 56.1 Statement is cited, the facts are

taken from that Party’s statement, and the other Party

does not dispute the fact asserted or has offered no

admissible evidence to refute that fact.

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 2 of 12
3

One of Tiffany’s facilities is located at

the Americana shopping center (the “mall”)

in Manhasset, New York (the “Manhasset

store”). (Defs.’ 56.1 ¶ 18.) In the “fall of

2006,” new electric meters were installed

during a renovation project in a common area

at the mall. (Id.) Tiffany was not aware of

the installation of these new meters. (Id.)

The current dispute revolves around a

“switched meter error” that occurred between

Tiffany’s Manhasset store and the

neighboring Ralph Lauren store (the “Ralph

Lauren store”) during this renovation and

installation of meters. 

During the relevant time period, pursuant

to the terms of the contract, Tiffany furnished

NUS with certain data relating to the energy

costs it incurred from both Con Edison

Solutions (“Con Ed”) and the Long Island

Power Authority (“LIPA”). (See Pl.’s 56.1

¶¶ 37-38.)3

 On November 15, 2006,

Christine Amundsen (“Amundsen”), a senior

consultant for NUS assigned to the Tiffany

account, sent an email to Bruce Mogel

(“Mogel”), Tiffany’s “contact person” with

NUS. (See Pl.’s 56.1 ¶¶ 40-42.)

Amundsen’s email advised Mogel that NUS

had reviewed the recent electric bills for the

Manhasset Store and had observed “an

unusual usage pattern for last August and

September.” (Id. ¶ 42.) Prior to Amundsen’s

email, Mogel had been unaware of any

irregularities in Tiffany’s electric bills. (Id. ¶

43.) After further investigation, Mogel

concluded that “nothing different was being

done” at the Manhasset store to explain the

unusual usage pattern. (Id. ¶¶ 44-45.) 

On November 16, 2006, Mogel sent an

email to Amundsen instructing her to proceed

with an investigation of the electric problem

at the Manhasset store and to advise him if

anything needed “to happen at the site.” (Id.

¶ 46.) Amundsen then “asked the rate

department manager [at NUS] to assign it to

someone so that if it was a recommendation

and report we need to get to the client, it

would [be] prepared by the specific analysts.”

(Amundsen Dep. Tr. at 75:4-8.) 

On December 20, 2006, Amundsen sent

an email to Mogel, with an attached “Cost

Analysis Report” (the “Report”). (See

Goodman Decl. Ex. B (the Report).) The

Report contained the following language:

As part of our analysis, we have

compared your consumption and load

profile (which we compiled from

your electricity invoices) against

other available rate options currently

being offered . . . . Our analysis,

based upon your recent consumption

patterns and load profile, reveals that

while your present rate is the most

cost effective, a billing error which

appears to be ongoing in nature, is

resulting in monthly overcharges of

approximately $31,000. Therefore, in

addition to a refund of approximately

$93,000 for past overcharges, we

project a correction of this ongoing

overcharge on your account will

result in annual savings of

approximately $372,000.

3

 Specifically, Tiffany purchased the commodity

portion of its electricity supply for the Manhasset store

from Con Ed, and incurred charges for the transmission

and distribution portion of its electricity supply for the

Manhasset store from LIPA. (See Pl.’s 56.1¶¶ 35-36.)

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 3 of 12
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(Id. (emphasis omitted).) The Report

specifically noted that the error “may be the

result of an error by the Provider (e.g., meter

reading error, meter malfunction, computer

error, administrative error, etc.).” (Id.) The

Report also contained the following language

under a subsection entitled

“Recommendation”: “NUS Consulting Group

recommends investigating this potential

ongoing overcharge. As detailed above, we

estimate that in addition to a refund of

approximately $93,000 for past overcharges,

a correction of this ongoing overcharge will

result in annual savings of approximately

$372,000.” (Id. (emphasis omitted).) Under

a final subheading entitled “Suggested

Action,” the Report provides that “NUS will

initiate action to investigate potential

overcharge as detailed above. We will

initially approach the Provider to review this

matter and correct your billings. We will

then also contact your Marketer to adjust

their invoices and rebill you based on the

corrected usage as well.” (Id.) 

On December 22, 2006, Mogel and

Amundsen discussed the Report during a

telephone conversation. (Pl.’s 56.1 ¶ 64;

Goodman Decl. Ex. I.) During this

conversation, Mogel commented that the

recommendation was a “great catch,” but

questioned the significantly large estimated

savings of $372,000. (Pl.’s 56.1 ¶ 64;

Goodman Decl. Ex. I.) Despite this

reservation, Mogel “did not want [NUS] to

delay contacting the utility suppliers and

getting the problem corrected.” (Goodman

Decl. Ex. I; see also Pl.’s 56.1 ¶¶ 64-65.)

Mogel subsequently signed a letter written on

Tiffany’s letterhead, which was to be

submitted to the utility companies for the

purpose of giving them permission to work

with NUS on Tiffany’s behalf. (Pl.’s 56.1 ¶

72; Goodman Decl. Ex. P.) NUS was

authorized to use the letter in connection with

its efforts to correct the electric service

billing error at the Manhasset store. (Pl.’s

56.1 ¶ 73.) 

On December 22, 2006, Amundsen sent a

letter to LIPA by facsimile in which she

informed LIPA about the elevated

consumption and demand readings on

Tiffany’s account at the Manhasset store, and

requested that LIPA (1) investigate whether

an error had occurred, (2) correct the meter

so that it properly recorded all future usage,

and (3) credit the account for all past

overcharges. (Pl.’s 56.1 ¶ 75.) Amundsen

also included a copy of the letter of

authorization signed by Mogel. (Id.). On that

same day, Amundsen attempted to contact

LIPA, but it was closed for the Christmas

holiday. (Id. ¶ 76.) 

 On December 26, 2006, Amundsen spoke

with LIPA’s billing supervisor, Kathleen

Schwarting (“Schwarting”), about the

potential error at the Manhasset store. (Id. ¶

77.) During this conversation, Schwarting

conveyed that the billing for the Ralph

Lauren store, located next to Tiffany’s

Manhasset store, seemed “unusually low,”

while the billing for Tiffany’s Manhasset

store seemed “unusually high.” (Goodman

Decl. Ex. O.) As a result, Schwarting put a

hold on both accounts. (Id.) Schwarting also

indicated that LIPA would need to verify the

information via a field investigation, which

she estimated would take two to three weeks

to complete. (Id.) However, Schwarting put

a “rush” on the request, and indicated that

LIPA might be able to resolve the problem in

one or two weeks. (Id.) All of this

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 4 of 12
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information was conveyed by Amundsen to

her superiors in an email. (See id.) Under an

entry dated December 26, 2006 in NUS’s

notes for the Tiffany account, NUS wrote:

“correct possible switched meter with R.

Lauren Polo account.” (Mitchell Decl. Ex.

16.) 

Later that same day, on December 26,

2006, Amundsen sent an email to Mogel.

(See Defs.’ 56.1 ¶ 49; Mitchell Decl. Ex. 8.)

Amundsen informed Mogel that she spoke to

Schwarting, and that Schwarting “definitely

saw that a possible billing error exists, but

said they would have to do a field

investigation in order to get the details.”

(Mitchell Decl. Ex. 8.) Amundsen further

relayed that the results from such an

investigation could take one or two weeks to

receive, that for the time being a hold was

being put on Tiffany’s account, and that no

further payments should be made. (Id.)

However, Amundsen did not convey to

Mogel the possibility of meter confusion

between Tiffany’s Manhasset store and the

neighboring Ralph Lauren store. (See Defs.’

56.1 ¶ 49; Mitchell Decl. Ex. 8.) 

On January 2, 2007, Amundsen informed

Mogel via email that LIPA was sending an

investigator to determine the source of the

“problem” with the electric meter for

Tiffany’s Manhasset store. (See Goodman

Decl. Ex. OO.) On January 3, 2007, LIPA’s

investigator, James Espy (“Espy”), performed

a field investigation and concluded that the

high electric bill at the Manhasset store was

the result of an incorrect “meter multiplier.”

(Pl.’s 56.1 ¶ 79.)4

 Specifically, Espy noted

on his report that the meter multiplier listed

on Tiffany’s bill history was 180, while the

correct multiplier was 80. (See id.; see also

Goodman Decl. Ex. Q.) 

On January 11, 2007, Amundsen sent

Mogel an email regarding Espy’s field

investigation. (See Goodman Decl. Ex. S.)

The email stated that the “investigation of the

meter issue revealed that the wrong meter

constant was being applied to the calculation

of the bill each month, subsequent to the

installation of the new meter in September.”

(Id.) Amundsen also represented that NUS

was “not yet convinced that the matter has

been totally resolved. Specifically, although

there will be a significant reduction in the

charges as a result of the initial investigation,

based on your bills prior to the changeover,

the readings (i.e., kWh and KW) still seem

high.” (Id.) Amundsen asked for Tiffany to

send her the “load data” from the Manhasset

store, which Mogel faxed to Amundsen later

that same day. (See id.; see also id. Ex. T.)

On January 12, 2007, Amundsen sent an

email to Diane Hoffman (“Hoffman”),

Tiffany’s landlord’s representative for the

Manhasset store. (See Pl.’s 56.1 ¶ 86; see

also Goodman Decl. Ex. U.) Amundsen

informed Hoffman of the potential billing

error, and that “LIPA’s investigation of the

meter problem revealed that the wrong meter

4

 The “meter multiplier” is used in conjunction with

the actual meter readings to calculate the monthly

demand kW and energy kWh used for billing purposes.

(Pl.’s 56.1 ¶ 81.) Specifically, electric meters for

commercial customers track energy usage by showing

a numeric value for a time period, which is then

multiplied by a figure (the “meter multiplier”) unique to

that particular meter. (Defs.’ 56.1 ¶ 53.) 

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 5 of 12
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constant was being applied to the calculation

of the bills each month.” (Goodman Decl.

Ex. U.) The email also stated that “in

addition to the billing errors, there appears to

also be a meter wiring error,” and that NUS

wanted “to insure [sic] that Tiffany and Co. is

wired for their usage only and not being

charged for any usage of their neighboring

stores. (LIPA advised that the usage for the

Ralph Lauren store was lower than usual for

the same time periods in question.)” (Id.) 

In an email dated January 16, 2007,

David Brown (“Brown”), a vice president of

NUS who temporarily took over Amundsen’s

responsibilities, sent an email to Mogel.

(Goodman Decl. Ex. V.) In that email,

Brown conveyed the substance of a telephone

conversation that he had with a representative

of the electrical contractor for the mall (the

“contractor”) the previous day, on January

15, 2007. (See Pl.’s 56.1 ¶ 87; see also

Goodman Decl. Ex. V.) Specifically, the

contractor “indicated that it appeared that

LIPA had ‘mis-tagged or mis-labeled’ the

newly installed electricity meters for

[Tiffany’s Manhasset] store and the

neighboring [Ralph Lauren] store,” and that

“[a]ccordingly, the recorded usage/demand

for Polo had been placed on the Tiffany bills

and vice versa.” (Id.) 

On January 16, 2007, Brown called LIPA

and provided the billing supervisor with the

name and telephone number of the electrical

contractor for the mall. (See Goodman Decl.

Ex. W.) The billing supervisor indicated that

LIPA’s investigator, Espy, would contact the

contractor and arrange a day and time for the

inspection. (See id.) On January 19, 2007,

Espy performed another field inspection,

together with the contractor. (Schwarting

Dep. Tr. at 101:5-102:8.) During this

inspection, Espy discovered that, although

the meters for Tiffany’s Manhasset store and

the neighboring Ralph Lauren store were

wired correctly on location, the meters were

switched in LIPA’s computer system. (See

Goodman Decl. Ex. R; see also Schwarting

Dep. Tr. at 83:21-85:6.)5

 LIPA subsequently

fixed the error in its computer system, and, as

a result, Tiffany’s utility bills were accurate

after March 27, 2007. (See Pl.’s 56.1 ¶ 94.) 

In February 2007, NUS made its demand

for a fee of approximately $1 million in

connection with correcting the switched

meter error. (See Frankel Dep. Tr. at 33:4-

11.) In response, Tiffany terminated the

contract with NUS. (See id.)

B. Procedural History

 Shortly thereafter, on April 26, 2007, NUS

filed its Complaint in this action. Tiffany

field its Answer with counterclaims on June

6, 2007. On September 4, 2007, the case was

reassigned to the undersigned from the

Honorable Kenneth M. Karas, District Judge.

Following discovery, on July 31, 2008,

Tiffany filed its motion for summary

judgment and an accompanying

memorandum of law. On September 5, 2008,

NUS filed a cross-motion for summary

judgment, and a memorandum of law in

support of its motion and in opposition to

Tiffany’s. On September 25, 2008, Tiffany

5

 Specifically, when the meters were installed, they

were put into a “meter pan,” which signifies the meter

that services each store. There was apparently a “mislabeling,” resulting in the meter for Tiffany’s

Manhasset store being associated with the Ralph

Lauren store, and vice versa. (See Schwarting Dep. Tr.

at 83:21-85:6.) 

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 6 of 12
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filed a reply memorandum, in further support

of its motion and in opposition to NUS’s

motion. Finally, on October 16, 2008, NUS

filed its reply memorandum. 

II. DISCUSSION

The standards for summary judgment are

well settled. The moving party bears the

burden of showing that he or she is entitled to

summary judgment. See Huminski v.

Corsones, 396 F.3d 53, 69 (2d Cir. 2005).

Pursuant to Rule 56(c), summary judgment is

appropriate “if the pleadings, depositions,

answers to interrogatories, and admissions on

file, together with affidavits, if any, show that

there is no genuine issue as to any material

fact and that the moving party is entitled to

judgment as a matter of law.” Fed. R. Civ. P.

56(c); Matican v. City of New York, 524 F.3d

151, 154 (2d Cir. 2008). “A dispute about a

‘genuine issue’ exists for summary judgment

purposes where the evidence is such that a

reasonable jury could decide in the

non-movant’s favor.” Beyer v. County of

Nassau, 524 F.3d 160, 163 (2d Cir. 2008)

(quoting Guilbert v. Gardner, 480 F.3d 140,

145 (2d Cir. 2007)); see also Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)

(noting that summary judgment is

unwarranted if “the evidence is such that a

reasonable jury could return a verdict for the

nonmoving party”).

A. Breach of Contract Claim

1. Legal Standard

There are four elements to a claim for

breach of contract under New York state law:

“(1) the existence of an agreement, (2)

adequate performance of the contract by the

plaintiff, (3) breach of contract by the

defendant, and (4) damages.” Harsco Corp.

v. Segui, 91 F.3d 337, 348 (2d Cir. 1996).6

In determining a party’s obligations under

a contract, “the initial interpretation of a

contract ‘is a matter of law for the court to

decide.’” K. Bell & Assocs., Inc. v. Lloyd’s

Underwriters, 97 F.3d 632, 637 (2d Cir.

1996) (quoting Readco, Inc. v. Marine

Midland Bank, 81 F.3d 295, 299 (2d Cir.

1996)). “Included in this initial interpretation

is the threshold question of whether the terms

of the contract are ambiguous.” Alexander &

Alexander Servs., Inc. v. These Certain

Underwriters at Lloyd’s, London, 136 F.3d

82, 86 (2d Cir. 1998). “[T]he presence or

absence of ambiguity is determined by

looking within the four corners of the

document, without reference to extrinsic

evidence.” Chapman v. New York State Div.

for Youth, 546 F.3d 230, 236 (2d Cir. 2008)

(citing Kass v. Kass, 91 N.Y.2d 554 (N.Y.

1998)). “Ambiguity in a contract is the

inadequacy of the wording to classify or

characterize something that has potential

significance.” Eternity Global Master Fund

Ltd. v. Morgan Guar. Trust Co. of New York,

375 F.3d 168, 178 (2d Cir. 2004).

“Ambiguity with respect to the meaning of

contract terms can arise either from the

language itself or from inferences that can be

drawn from this language.” Alexander &

Alexander, 136 F.3d at 86. 

 “Summary judgment is generally proper

in a contract dispute only if the language of

6

 “The parties’ briefs assume that New York law

controls, and such ‘implied consent . . . is sufficient to

establish choice of law.’” Krumme v. WestPoint

Stevens, Inc., 238 F.3d 133, 138 (2d Cir. 2000) (quoting

Tehran-Berkeley Civil & Envt’l Eng’rs v.

Tippetts-Abbett-McCarthy-Stratton, 888 F.2d 239, 242

(2d Cir. 1989)) (alteration in original).

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 7 of 12
8

the contract is wholly unambiguous.”

Compagnie Financiere de CIC et de L’Union

Europeenne v. Merrill Lynch, Pierce, Fenner

& Smith Inc., 232 F.3d 153, 157-58 (2d Cir.

2000) (citing Mellon Bank, N.A. v. United

Bank Corp. of New York, 31 F.3d 113, 115

(2d Cir. 1994)). However, “[w]here the

resolution of the ambiguity hinges on such

extrinsic matters as the credibility of

witnesses or documents or upon choosing

one among several reasonable inferences that

may be drawn from such extrinsic evidence,

a jury, and not a court, should decide what

meaning is to be ascribed to the contract.”

Brass v. Am. Film Techs., Inc., 987 F.2d 142,

148-49 (2d Cir. 1993) (citations omitted). 

2. Analysis

In this case, there is no dispute that a

valid contract existed between the Parties.

Rather, what is at issue is the proper

interpretation of the contract, and, under that

interpretation, whether there are any disputed

issues of material fact as to the Parties’

performance. The Court will therefore

consider each of the contested contractual

terms, and the Parties’ performance as relates

to those terms. 

i. NUS’s “Recommendation”

Tiffany first argues that NUS failed to

adequately perform under the terms of the

contract, as the recommendation provided by

NUS “is simply not the kind of

recommendation contemplated by the

Contract because it is far too generic to have

any meaning.” (Defs.’ Mem. at 22.) The

Court finds no merit in this argument. The

plain and unambiguous meaning of the word

“recommend” undoubtedly encapsulates the

“recommendation” made by NUS in this

case. See Webster’s Third New Int’l

Dictionary 1897 (2002) (defining

“recommend” as “to mention or introduce as

being worthy of acceptance, use, or trial”).

Here, Tiffany admits that the

recommendation contained in the Report

“was to investigate, obtain a refund for, and

correct the error” identified by NUS in the

December 20, 2006 Report. (See Defs.’

Response to Pl.’s 56.1 ¶ 54.) The Court

finds that this language constituted a valid

“recommendation” under the contract. The

Court further finds that Tiffany “approved”

the recommendation as contemplated by the

contract, by inter alia, telling NUS that it

should not “delay contacting the utility

suppliers and getting the problem corrected,”

and by signing a letter written on Tiffany’s

letterhead giving utility companies

permission to work with NUS on Tiffany’s

behalf. 

ii. Tiffany’s “Costs”

It is undisputed that Tiffany terminated

the contract in February 2007 when NUS

made its demand for a fee of approximately

$1 million in connection with correcting the

switched meter. (See Frankel Dep. Tr. at

33:4-11.) However, Tiffany argues that,

when so doing, it was not in breach of the

contract because NUS did not save Tiffany

any “costs” under the contract. Specifically,

Tiffany argues that:

As it turned out, the “costs” for

electricity . . . were not “our costs,” as

contemplated by the Contract, but

rather, were the costs of neighbor

Polo Ralph Lauren. Providing

assistance to long-time client Tiffany

by notifying LIPA of this obvious

mistake, and assuring that the utility

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 8 of 12
9

made the necessary corrections, did

not reduce for Tiffany any of its own

costs, the only “savings”

contemplated by the Contract. 

(Defs.’ Mem. at 20.) 

The Court rejects Tiffany’s proffered

interpretation of the word “costs” as used in

the contract. Applying the plain meaning of

the word, the Court finds no ambiguity with

regard to the term’s usage in the contract.

The word “cost” is broadly defined in the

dictionary as “the amount or equivalent paid

or given or charged or engaged to be paid or

given for anything bought or taken in barter

or for services rendered.” Webster’s Third

New Int’l Dictionary 515 (2002). The

contract, considered as a whole, affirms this

broad definition. The contract clearly

contemplates that NUS will save Tiffany two

types of “costs”: savings and refunds.7

 The

contract’s explicit inclusion of refunds into

the contract’s contemplation of costs belies

Tiffany’s linguistic argument here. By

definition, any refund received by Tiffany

due to an action taken by NUS would involve

a returning of a “cost” that was not, in some

sense, Tiffany’s own. Thus, Tiffany’s

argument that the plain meaning of the word

costs requires a determination of whose

“costs” are involved is contradicted both by

the plain meaning of the word, and by

consideration of the contract as a whole.

Accordingly, the Court finds that there is no

ambiguity in the term “costs,” and that the

“recommendation” made by NUS did not,

solely by virtue of involving the alleged costs

of the Ralph Lauren store, involve “costs”

that were outside of the scope of that term as

contemplated by the contract.

iii. “Savings” and “Refunds”

This finding brings the Court to the crux

of the dispute between NUS and Tiffany. As

noted, the contract contemplates two types of

costs: refunds and savings. The issue

presented by this case is whether NUS’s

recommendation resulted in a refund, a

savings, or both. NUS argues that, under the

terms of the contract, by correcting the

switched meter error, it is entitled not only to

fifty percent of any “refund” received by

Tiffany, but also to Tiffany’s projected

“savings” for the next sixty months. NUS

argues that the latter amount should be

calculated by computing the difference

between (1) the bills Tiffany actually

receives, paying for the proper meter, and (2)

the bills that Tiffany would have received,

had the meter error persisted.8

The Court agrees with NUS that by

investigating and identifying the overcharge

in question, NUS is entitled to half of the

amount actually returned to Tiffany. Such

returned funds constitute a “refund” as

unambiguously used in the contract, and as

7

 As noted, the contract authorizes NUS to “submit

recommendations for savings and refunds.” (Mitchell

Decl. Ex. 1. (emphasis added).) The “performance fee”

due to NUS distinguishes between refunds and savings:

“A performance fee of: (i) fifty (50%) percent of each

refund realized; (ii) fifty (50%) percent of each savings

realized for a period of sixty (60) months after which

the entire savings will be ours.” (Id. (emphasis added).)

And further: “Payment will be made upon receipt of

your invoice showing computation of savings and/or

refunds. (Id. (emphasis added).) 

8

 The total purported damages calculated under this

methodology amount to $964,906.29, plus applicable

interest. (See Brown Aff. ¶ 13) (calculating NUS’s

alleged damages).) 

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 9 of 12
10

commonly defined and understood. See

Webster’s Third New Int’l Dictionary 1910

(2002) (defining refund as “to return (money)

in restitution, repayment, or balancing of

accounts”). 

However, the Court rejects NUS’s radical

interpretation of the word “savings,” and

holds that the identification and subsequent

elimination of an improper utility overcharge

does not constitute a “savings” to Tiffany

under the contract. By correcting the

switched meter error, NUS effectuated a

return of property that was wrongly taken in

the first place. To find that such an action

yielded a “savings” to Tiffany would actually

perpetuate an unwarranted overcharge for

five more years. The fact that the overcharge

would be reduced by half, and be payable to

NUS instead of to a utility company, is of no

moment and does nothing to transform such

an overcharge into a “savings.” Only in

Wonderland could “savings” be so distorted

and divested of its plain meaning. See

Newmont Mines Ltd. v. Hanover Ins. Co., 784

F.2d 127, 135 (2d Cir. 1986) (“Unless

otherwise indicated, words should be given

the meanings ordinarily ascribed to them and

absurd results should be avoided.”); see also

Webster’s Third New Int’l Dictionary 2020

(2002) (defining “savings” as “the excess of

income over consumption expenditures”).

Put simply, the plain language of the

agreement and common sense forbid such a

strained construction.

Accordingly, the Court holds that the

only “costs” encapsulated by NUS’s

correction of the switched meter error were

the “refunds” that Tiffany received, and not

any projected “savings.” Thus, the most that

Tiffany would owe NUS under the terms of

the contract is $33,510.79, or fifty percent of

the $67,021.58 in refunds that NUS alleges

Tiffany received from LIPA and Con Ed.

(See Brown Aff. ¶ 17.) However, the Court

finds that there are disputed issues of fact that

cannot be resolved on summary judgment

with regard to whether NUS improperly

delayed in correcting the meter error, and, by

so doing, violated the covenant of good faith

and fair dealing that is implicit in all

contracts under New York law. See

Tractebel Energy Mktg, Inc. v. AEP Power

Mktg., Inc., 487 F.3d 89, 98 (2d Cir. 2007)

(citing Dalton v. Educ. Testing Serv., 87

N.Y.2d 384, 389 (N.Y. 1995)); see also

Dalton, 87 N.Y.2d at 389 (noting that the

covenant “embraces a pledge that neither

party shall do anything which will have the

effect of destroying or injuring the right of

the other party to receive the fruits of the

contract.”). Although NUS first notified

Tiffany of the potential error on November

15, 2006, NUS did not submit a

“recommendation” until more than a month

later, via the December 20, 2006 Report.

There is no apparent explanation for this

delay on the record; Amundsen testified at

her deposition that she was not aware of any

investigation that had been conducted

between November 15, 2006 and December

19, 2006 by NUS regarding the potential

error at Tiffany’s Manhasset store. (See

Amundsen Dep. Tr. at 114:19-25.) It then

took almost another month to actually fix the

error identified in the Report. NUS argues, in

its motion papers, that “[i]n light of the fact

that this period included numerous holidays,

and that NUS consultants manage multiple

accounts, [this delay] was neither excessive

nor unreasonable.” (Pl.’s Mem. at 22.)

While this may be true, the Court is not able

to resolve this disputed issue of material fact

on the record currently before it. 

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 10 of 12
11

There are also disputed issues

surrounding NUS’s delay in conveying the

source of the actual error to Tiffany. When

Amundsen first spoke to LIPA’s billing

supervisor Schwarting about the potential

overcharge at the Manhasset store on

December 26, 2006, she learned that there

was potential meter confusion between

Tiffany’s Manhasset store and the

neighboring Ralph Lauren store.9

 Despite

this knowledge, Amundsen did not mention

the potential switched meter error in the

email she sent later that same day to

Tiffany’s contact person, Mogel. In fact, on

the current record, it does not appear that

NUS expressly informed Tiffany about the

“switched meter error” until Brown sent an

email to Mogel on January 16, 2007,

notwithstanding the many communications

between NUS and Tiffany during that period,

which, as detailed above, included a request

for “load data.”10 The current record

provides no explanation for (1) these delays,

(2) the failure to communicate immediately

the potential “switched meter error,” or (3)

the necessity of requesting “load data.” 

“‘[W]hether particular conduct violates or

is consistent with the duty of good faith and

fair dealing necessarily depends upon the

facts of the particular case, and is ordinarily a

question of fact to be determined by the jury

or other finder of fact.’” Tractebel Energy

Mktg., 487 F.3d at 98 (quoting 23 Williston

on Contracts § 63:22 (4th ed. 2006)). The

Court finds that in this case, there are

disputed issues of material fact as to whether

NUS’s performance under the contract

violated the duty of good faith and fair

dealing, and accordingly, whether NUS is

entitled to fifty percent of any “refund”

received by Tiffany.11 Accordingly, both

Parties’ motions for summary judgment on

their respective breach of contract claims are

denied. The Court likewise denies both

Parties’ motions for summary judgment on

their respective claims for declaratory

judgment and specific performance.

B. Unjust Enrichment and Quantum Meruit

Claims

 

Under New York law, quantum meruit

and unjust enrichment claims are analyzed

together as a single quasi-contract claim. See

Mid-Hudson Catskill Rural Migrant Ministry,

Inc. v. Fine Host Corp., 418 F.3d 168, 175

(2d Cir. 2005). In this case, the undisputed

existence of a valid contract precludes any

claims under these quasi contractual theories.

See, e.g., Clark Fitzpatrick, Inc. v. Long

Island R.R. Co., 70 N.Y.2d 382, 388 (N.Y. 9

 As noted, Schwarting conveyed to Amundsen that the

billing for the neighboring Ralph Lauren store seemed

“unusually low,” while the billing for Tiffany’s

Manhasset store seemed “unusually high.” (Goodman

Decl. Ex. O.) Further, under an entry dated December

26, 2006 in NUS’s account notes for Tiffany, NUS

wrote: “correct possible switched meter with R. Lauren

Polo account.” (Mitchell Decl. Ex. 16.) 

10 Mogel was also sent a copy of the email from

Amundsen to Hoffman on January 12, 2007, which

makes reference to the possibility of a “meter wiring

error” between the Ralph Lauren store and Tiffany’s

Manhasset store. 

11 NUS argues that, since Tiffany received $67,021.58

in “refunds,” it is owed fifty percent of that amount, or

$33,510.79, under the contract. (See Brown Aff. ¶ 17.)

Tiffany responds that, “[a]t most, NUS could possibly

claim entitlement to whatever refund was due for the 9

day period reflected on the first erroneous bill, which it

identified to Tiffany on November 16, 2006.” (Defs.’

Mem. at 23-34.). The resolution of this dispute requires

a determination by the fact finder as to whether NUS

properly performed under the contract in identifying

and correcting the switched meter error. 

Case 1:07-cv-03345-RJS Document 52 Filed 03/20/09 Page 11 of 12