Court Opinion

ID: 6027588
Source: CourtListenerOpinion
Date Created: 2022-01-13 12:30:21.689977+00
Date Added: 2024-06-11T08:51:05.014823
License: Public Domain

Tom, J.,
dissents in a memorandum as follows: Since the 1970’s, petitioner had been the lessee of premises on the ground floor of Pier 40 located at Houston and West Streets on the Hudson River. The most recent lease was due to expire in December 1996. By this time, the Department of Transportation (DOT) had promulgated a new policy pursuant to which only monthly permits would be issued for the pier. During 1996, petitioner and DOT negotiated for petitioner’s lease of the entire pier. DOT made its offer in a letter dated November 15, 1996. The letter was accompanied by four copies of a monthly permit. The permit included as terms that a security deposit would be required and that the agency could opt to remove some 70,000 square feet from the rental, subject, of course, to a proportionate reduction of rent. The letter stated that the terms and conditions provided in the permit were DOT’s final determination, and that petitioner was to sign and return the permit by November 27, 1996, if acceptable. Petitioner was also required to submit a security deposit of $291,700 to ensure faithful performance of the permit.
Petitioner returned the signed permits along with a cover letter dated November 26, 1996. However, the cover letter referred to these two issues as unresolved and still “under discussion.” The responsive letter indicated that the security deposit should be unnecessary, and that exclusion of 70,000 square feet of rental space would create a hardship for petitioner’s business operation. The permits were not executed by DOT. By letter dated December 4, 1996, DOT rejected what it construed to be a counteroffer, noting that it had received a better offer, but giving petitioner another opportunity to match the competing offer.
The existence of a binding contract centers upon the parties’ intent to be bound and whether there was a meeting of the minds regarding the material terms of the transaction (Martin Delicatessen v Schumacher, 52 NY2d 105; Central Fed. Sav. v National Westminster Bank, 176 AD2d 131). Here, the financial terms of the agreement and the provision effectively defining the extent of the premises to be rented were material and substantial terms that went to the heart of the agreement (see, Penn Palace Operating v Two Penn Plaza Assocs., 239 AD2d 155). Petitioner’s concern over DOT’s removal of certain areas from the permit was clearly manifested in its November 26th letter, which stated that exclusion of 70,000 square feet, proposed to be reduced from the truck yard, would impede *383trucks backing into the platform and adversely impact on tenants, causing a loss of prospective tenants who would require that capability. Petitioner further indicated that the security deposit should not be required insofar as DOT would be paid in advance and the money could be better utilized for pier maintenance and improvements. Petitioner had failed to tender the requisite security deposit with the signed permits. The majority reads this not to be a condition precedent to acceptance. However, paragraph 5 concludes with the statement: “[t]he state hereby acknowledges receipt” (emphasis added) of the security deposit in the amount of $291,700, “received on _, 1996.” Although no date certain is included for tender of the security deposit, as noted by the majority, the very absence of a date, in the context of the preceding language of that sentence, leads to the clear indication that delivery was to accompany the signed permit, rather than the date of delivery constituting an independent term. Until the signed permit was actually sent back for execution, with the security deposit, the date of receipt could not be actually known. I fail to see how the payment of a security deposit in this substantial amount is not a material term of the agreement, or how one could assume that the date of delivery remained open-ended.
Hence, petitioner’s responsive letter, which left open these material issues for further negotiations, cannot be construed to be an unambiguous and unequivocal acceptance of the terms contained in the offer (King v King, 208 AD2d 1143). Rather, petitioner’s response was equivalent to a rejection and counteroffer. In other settings, when a purported acceptance has been even slightly at variance with the terms of the offer, we have characterized it as only a qualified acceptance, which we have construed to be a counteroffer rejecting the initially offered terms (Homayouni v Banque Paribas, 241 AD2d 375; New York Yankees Partnership v SportsChannel Assocs., 126 AD2d 470). Here, DOT noted in its November 15th offer that the terms and conditions stated therein were DOT’s “final determination”, and thus not subject to modification or future negotiation. Nor is this a case where a possibly equivocal acceptance is salvaged by an additional assurance indicating that a term causing dissatisfaction is, nevertheless, accepted as proposed (cf., John’s Insulation v Siska Constr. Co., 671 F Supp 289).
I also reject petitioner’s argument that DOT’s December 4th letter premised its refusal to execute the permit only on the ground that another entity had made a higher bid, and not because DOT deemed petitioner’s letter to constitute a *384counteroffer. Contrary to petitioner’s contention, DOT’s letter explicitly stated that all the “terms and conditions contained within the previously tendered permit form remain the same,” thus indicating a rejection of petitioner’s counteroffer.
Since there was no meeting of the minds on material and essential provisions explicitly incorporated in the permit, there was no contract between the parties, and DOT remained free to entertain and accept competing bids.
Accordingly, I would affirm the judgment of the New York County Supreme Court dismissing the petition.