| Clifford R. Gray, Inc. v LeChase Constr. Servs. LLC |
| 2008 NY Slip Op 04249 [51 AD3d 1169] |
| May 8, 2008 |
| Appellate Division, Third Department |
| Clifford R. Gray, Inc., Appellant, v LeChase ConstructionServices, LLC, Respondent. |
—[*1] Davidson Fink, L.L.P., Rochester (Fernando Santiago of counsel), for respondent.
Spain, J. Appeal from an order of the Supreme Court (Kramer, J.), entered May 29, 2007 inSchenectady County, which, among other things, granted defendant's motion to limit plaintiff'sproof at trial in certain aspects.
This matter has been the subject of a prior appeal before this Court (31 AD3d 983 [2006]),and involves events surrounding efforts by defendant, a general contractor, to win a contract forthe design and construction of a building at the Knolls Atomic Power Laboratory in the Town ofNiskayuna, Schenectady County. Plaintiff, an electric and teledata subcontractor, alleges that itassisted defendant in formulating a bid proposal and agreed to refrain from participating with anyother general contractors who were bidding on the project in exchange for defendant's promise touse plaintiff as the exclusive subcontractor for all electrical and teledata work should defendantbe awarded the prime contract. Defendant was ultimately successful in securing the primecontract, but declined to use plaintiff as a subcontractor. Thereafter, plaintiff commenced thisaction on the theories of breach of contract, promissory estoppel, unjust enrichment, equitableestoppel and fraud. After an unsuccessful motion for summary judgment, defendant appealed andthis Court dismissed all of plaintiff's causes of action except that based upon promissory estoppel(id. at 984, 988-989). A trial date was set for April 23, 2007 and, prior to trial, defendantmade a motion in limine seeking to limit plaintiff's proof at trial to reliance damages and topreclude plaintiff from offering evidence of expectancy or benefit-of-the-bargain [*2]damages. Supreme Court granted the motion and plaintiff nowappeals.[FN*]
The sole issue on appeal is what type of damages are potentially available to plaintiff on itspromissory estoppel cause of action. "To establish a promissory estoppel it must be shown thatthe defendant made a clear and unambiguous promise upon which the plaintiff reasonably reliedto his or her detriment" (Roufaiel v Ithaca Coll., 241 AD2d 865, 869 [1997] [citationsomitted]; see Bunkoff Gen. Contrs. v Dunham Elec., 300 AD2d 976, 978 [2002]).Although we have clearly recognized that promissory estoppel may be asserted as a viable causeof action in this type of commercial transaction (see Bunkoff Gen. Contrs. v DunhamElec., 300 AD2d at 977), it is unclear from our case law what relief is appropriate when aplaintiff succeeds under a promissory estoppel theory.
Plaintiff argues that it is entitled to the same legal damages that it would be entitled to haddefendant breached an enforceable contract; namely, it seeks expectancy damages, or the amountrequired to place it in the position as if defendant had kept its alleged promise (seeBrushton-Moira Cent. School Dist. v Thomas Assoc., 91 NY2d 256, 261 [1998]; J.R.Loftus, Inc. v White, 85 NY2d 874, 877 [1995]; Bippley v Hollenback, 228 AD2d983, 983 [1996]). In contrast, defendant argues that plaintiff is limited to equitable relief in theform of reliance damages, those necessary to restore plaintiff to the position in which it wouldhave been had it not relied on defendant's alleged promise (see Farash v SykesDatatronics, 59 NY2d 500, 504-505 [1983]; St. Lawrence Factory Stores v Ogdensburg Bridge & Port Auth., 26AD3d 700, 702 [2006]; 24 Lord, Williston on Contracts § 64:2 [4th ed]).
The doctrine of promissory estoppel may be asserted in a variety of different contexts, andthe measure of damages to be obtained may differ as well, depending on the factualunderpinnings supporting the doctrine (see e.g. Merex A.G. v Fairchild Weston Sys.,Inc., 29 F3d 821, 824 [1994], cert denied 513 US 1084 [1995] [contrasting theremedies available when the doctrine is invoked as a substitute for consideration and wheninvoked to avoid injustice where the statute of frauds bars enforcement of an oral agreement];Restatement [Second] of Contracts § 90, Comment d [noting that in promissoryestoppel cases "full-scale enforcement by normal remedies is often appropriate" but "relief maysometimes be limited to restitution or to damages or specific relief measured by the extent of thepromisee's reliance rather than by the terms of the promise"]). Here, we are called upon to decidesolely what type of damages are potentially available to plaintiff in this action, where it has beendetermined that no contract or meeting of the minds was ever formed, because the parties failedto agree to essential terms (see 31 AD3d at 985). Plaintiff is not asking Supreme Court toenforce a contract that would otherwise be enforceable but for lack of consideration (cf.Restatement [Second] of Contracts § 90, Comment a, Illustration 1]), but toprovide a remedy where the underlying agreement fails for indefiniteness (see 4 Lord,Williston on Contracts § 8:6 [4th ed]). The doctrine is not being used "defensively insupport of contract rights" but, instead, to create "a new right in the interests of justice" withrelief designed to achieve equity (Geneva Pharms. Tech. Corp. v Barr Labs., Inc., 2003WL 1345136, *4 [SD NY 2003]). Under these circumstances, plaintiff "is not entitled to thebenefit of the bargain because there was no bargain" (id.; see Restatement[Second] of Contracts § 90, Comment d, Illustrations 8, 12). Accordingly, we holdthat Supreme Court correctly limited the proof to those expenses that plaintiff incurred in relyingon defendant's alleged promise.[*3]
Cardona, P.J., Mercure, Lahtinen and Kavanagh, JJ.,concur. Ordered that the order is affirmed, with costs.
Footnote *: The trial has been stayedpending the outcome of this appeal.