Court Opinion

ID: 4082903
Source: CourtListenerOpinion
Date Created: 2016-10-07 23:39:01.990099+00
Date Added: 2024-06-11T14:27:32.025556
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

1341
CA 14-00818
PRESENT: CENTRA, J.P., FAHEY, VALENTINO, WHALEN, AND DEJOSEPH, JJ.

LITTLETON CONSTRUCTION LTD., PLAINTIFF-RESPONDENT,

                    V                                MEMORANDUM AND ORDER

HUBER CONSTRUCTION, INC. AND LITTLETON/HUBER
JOINT VENTURE, DEFENDANTS-APPELLANTS.

PHILLIPS LYTLE LLP, BUFFALO (MICHAEL B. POWERS OF COUNSEL), FOR
DEFENDANTS-APPELLANTS.

FREID AND KLAWON, WILLIAMSVILLE (WAYNE I. FREID OF COUNSEL), FOR
PLAINTIFF-RESPONDENT.

     Appeal from an order of the Supreme Court, Erie County (John A.
Michalek, J.), entered December 3, 2013. The order, insofar as
appealed from, denied in part the motion of defendants for summary
judgment dismissing the amended complaint.

     It is hereby ORDERED that the order insofar as appealed from is
reversed on the law without costs, the motion is granted in its
entirety, and the amended complaint is dismissed.

     Memorandum: Plaintiff commenced this action seeking, inter alia,
damages for a breach of contract claim. Defendants moved for summary
judgment dismissing the amended complaint, and Supreme Court granted
the motion, except with respect to plaintiff’s claim for a share of
certain management/overhead fees. We reverse the order insofar as
appealed from and grant defendants’ motion in its entirety.

     In November 2007, plaintiff and defendant Huber Construction,
Inc. (Huber) entered into a joint venture, i.e., defendant
Littleton/Huber Joint Venture, for a series of renovation projects at
the Buffalo Public Schools. The memorandum of understanding and
amending rider (collectively, MOU) governing the joint venture state
that Huber alone is entitled to a nine percent management/overhead fee
on all joint venture projects. Plaintiff claims that it is entitled
to a share of management/overhead fees proportional to the work it
performed on behalf of the joint venture, and that claim is based on a
provision in an operating agreement allegedly executed by plaintiff
and Huber, but which Huber asserts is fraudulent. Plaintiff concedes
on appeal that the operating agreement is “a cut and paste” of prior
documents executed by the parties, but asserts that the operating
agreement is nonetheless valid inasmuch as it, too, was duly executed
by plaintiff and Huber.
                                 -2-                          1341
                                                         CA 14-00818

     We agree with defendants that they met their initial burden of
establishing that the operating agreement at issue is fraudulent (see
generally Zuckerman v City of New York, 49 NY2d 557, 562). Huber’s
president tendered an affidavit in which he averred that he had never
signed or even seen the operating agreement at issue, and that Huber
had never had a copy of it. He further averred that, despite those
facts, the signatures, dates, and notary stamp on the allegedly
fraudulent operating agreement were identical to those on the MOU that
he had in fact signed. Huber also submitted copies of the MOU and the
allegedly fraudulent operating agreement in order to establish the
discrepancy in how each document treated management/overhead fees. We
conclude that defendants’ submissions were sufficient to meet their
initial burden of establishing that the operating agreement at issue
was forged and is therefore void (see Orlosky v Empire Sec. Sys., 230
AD2d 401, 403; Ticor Tit. Guar. Co. v E.F.D. Capital Group, 210 AD2d
841, 841-842, lv denied 85 NY2d 809; see also Opals on Ice Lingerie v
Body Lines, Inc., 320 F3d 362, 370). Defendants also tendered other
evidence on their motion in support of their position that the
operating agreement was forged. The bid specification sheets for each
of the school projects, which plaintiff’s owner reviewed and/or
signed, included a nine percent “[o]verhead” fee payable to Huber. In
addition, plaintiff’s owner admitted that Huber never agreed in
writing to any sharing of management/overhead fees. In opposition to
defendants’ motion, plaintiff failed to raise a triable issue of fact
either that the allegedly fraudulent operating agreement was not
forged, or that the MOU was ambiguous with respect to
management/overhead fees, thereby requiring extrinsic evidence to
determine the parties’ intentions concerning such fees (see generally
Alvarez v Prospect Hosp., 68 NY2d 320, 324; Hart v Kinney Drugs, Inc.,
67 AD3d 1154, 1157-1158). We therefore agree with Huber that it is
entitled to the management/overhead fees pursuant to the terms of the
MOU, and that plaintiff’s claim for such fees, based on the fraudulent
operating agreement, is without merit.

     In light of our decision, we do not consider defendants’
remaining contention.

     All concur except FAHEY and WHALEN, JJ., who dissent and vote to
affirm in the following Memorandum: We respectfully dissent and would
affirm. In support of their motion for summary judgment dismissing
the amended complaint, defendants submitted, inter alia, deposition
testimony from plaintiff’s owner, in which he stated that he signed
the allegedly fraudulent operating agreement. “It is not the function
of a court deciding a summary judgment motion to make credibility
determinations or findings of fact, but rather to identify material
triable issues of fact (or point to the lack thereof)” (Vega v Restani
Constr. Corp., 18 NY3d 499, 505). Consequently, we cannot conclude as
a matter of law that the operating agreement at issue is a forgery.

Entered:   February 6, 2015                     Frances E. Cafarell
                                                Clerk of the Court