Court Opinion

ID: 5862182
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:22:10.63284+00
Date Added: 2024-06-11T08:44:27.977436
License: Public Domain

Kupferman, J. P.
(dissenting in part). Although I agree with the majority that the breach of contract cause of action alleging miscalculation of escalation charges should be remanded for a new trial, I would affirm the dismissal by Trial Term of the cause of action alleging fraudulent inducement of the entire contract.
The facts are well stated in the majority opinion. The central issue is construction of an ambiguous escalation clause in the cleaning service contract executed by the parties. That clause provides: “(ii) the Labor Cost of Full Regular Services shall be deemed to be the Labor Cost for the average number of employees, determined by the average number in each job category, actually engaged over the period of three months preceding the determination date; or the Labor Cost as of such date for the number of employees and [sic] in the respective job categories listed in the Full Personnel Complement annexed hereto as Exhibit D.” The immediately preceding paragraph 8 (c) (i) in the contract, which governed escalation during the period when the building was not yet fully occupied, was phrased identically to paragraph 8 (c) (ii) quoted above, except it ended with the words, “whichever is the lesser”. Clearly, paragraph 8 (c) (ii) as written is incomplete.
The “Full Personnel Complement” referred to above lists the requirements of personnel to serve the entire building at 113V2 people. It is conceded that the actual number of personnel employed to service the building was substantially lower.
However, the estimate of 113V2 people was not a fraudulent misrepresentation made to induce plaintiff to enter the contract. Rather, it was an approximate figure. The building was not even fully occupied when the USti estimate was given, and defendant had never before serviced a building so large.
In my view, the only logical construction to be given to the ambiguous clause is that the words “whichever is lesser” were inadvertently omitted. Applying this interpretation, the 113V2 figure becomes the maximum number of employees on which defendant can charge escalation under the terms of the contract, with the actual escalation *231charges to be based on the actual number of personnel employed. It was perfectly reasonable for plaintiff to assume that defendant was actually using more than 113Vz employees when the bills came in year after year charging escalation on the basis of llSVz. It is inconceivable that a landlord would agree that escalation charges in a service contract would be based on the salaries of nonexistent employees.