| M/A-Com, Inc. v State of New York |
| 2010 NY Slip Op 07851 [78 AD3d 1293] |
| November 4, 2010 |
| Appellate Division, Third Department |
| M/A-Com, Inc. et al., Appellants, v State of New York et al.,Respondents. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Robert M. Goldfarb of counsel), forrespondents.
McCarthy, J. Appeal from an order of the Court of Claims (Collins, J.), entered September 25,2009, which partially granted defendants' motion to partially dismiss the claim.
Claimant M/A-Com, Inc. (hereinafter claimant) entered into a master agreement with defendantState of New York for claimant to create a statewide wireless network that would facilitate bettercommunication for public safety and public service agencies. The agreement stated that the projectwould begin with claimant establishing the network in two counties in western New York, referred to asthe primary regional build. After the State approved of the network in that region, the State would payclaimant for the completed work and claimant would begin expanding the network throughout NewYork. During the initial phase, a change order was apparently issued wherein claimant agreed to updatea communications system in New York City, known as the Metro 21 system, while continuing to workon the primary regional build. Claimant alleges that it has spent $15 million on the Metro 21 system.
The State terminated the contract due to alleged deficiencies within the network. Claimantscommenced this action claiming, as relevant on this appeal, that the State breached the contract andwas unjustly enriched by claimant's work on the Metro 21 system. Defendants moved to dismiss all ofthe causes of action except for breach of contract. With one exception not relevant to this appeal, theCourt of Claims granted defendants' motion. Claimants appeal, [*2]limiting their argument to the court's dismissal of the unjust enrichmentclaim regarding work done on the Metro 21 system. We affirm.
"The existence of a valid and enforceable written contract governing a particular subject matterordinarily precludes recovery in quasi contract for events arising out of the same subject matter"(Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 388 [1987] [citations omitted]).If, however, there is a bona fide dispute as to the existence of a contract or whether the scope of anexisting contract covers the disagreement between the parties, a party will not be required to elect hisor her remedies and may proceed on both quasi contract and breach of contract theories (see Plumitallo v Hudson Atl. Land Co.,LLC, 74 AD3d 1038, 1039 [2010]; Goldman v Simon Prop. Group, Inc., 58 AD3d 208, 220 [2008]; Schwartz v Pierce, 57 AD3d 1348,1353 [2008], lv denied 12 NY3d 707 [2009]). Here, there is no dispute that a contract exists;the master agreement is included in the record and the parties acknowledge that a change order relatingto work in New York City was signed by the parties' agents and approved by the Comptroller.However, as this amendment to the contract was not presented to the Court of Claims and is notincluded in the record, we cannot determine whether the contract covers the work on the Metro 21system. Accordingly, under the general rule, claimants would be permitted to proceed on alternativetheories at this pre-answer stage of the action (see Foster v Kovner, 44 AD3d 23, 29 [2007]).
The result here is different than under the general rule, however, because claimant was dealing withthe State. Any contract with a state agency above a monetary threshold must be approved by theComptroller (see State Finance Law § 112 [2] [a]).[FN*]If a change order that addresses the Metro 21 system was approved by the Comptroller, then claimantcan proceed under a breach of contract theory and may not recover for unjust enrichment. On the otherhand, if no change order addresses the Metro 21 system, and there is thus no written contractconcerning that system approved by the Comptroller, then the statute bars claimant from recovering forwork done on that system (see Parsa v State of New York, 64 NY2d 143, 147 [1984]).Unlike a private party, the State's acceptance of benefits furnished under a contract made without theproper authorization cannot "estop [the State] from challenging the validity of the contract or fromdenying liability pursuant to it" (id. at 147; see Hamlin Beach Camping, Catering, &Concessions Corp. v State of New York, 303 AD2d 849, 853 [2003]; Rosefsky v State ofNew York, 205 AD2d 120, 124 [1994]). While State Finance Law § 112 does notprevent recovery under a quasi contract theory where a contract is implied-in-law to restore money toits rightful owner (see Parsa v State of New York, 64 NY2d at 148-149; Rosefsky v Stateof New York, 205 AD2d at 123-124), claimant here is attempting to recover on a contractimplied-in-fact through the parties' negotiations and course of conduct. Under such circumstances, "acontract between them may not be implied to provide 'rough justice' and fasten liability on the Statewhen applicable statutes expressly prohibit it" (Parsa v State of New York, 64 NY2d at 147).Because State Finance Law § 112 bars claimants from recovering on a quasi contract theory ifno contract exists, the unjust enrichment claim was properly dismissed.
Peters, J.P., Rose, Lahtinen and Garry, JJ., concur. Ordered that the order is affirmed, withoutcosts.
Footnote *: Claimant alleges that it spent $15million on the Metro 21 system. That amount exceeds the statute's monetary threshold, which was$15,000 at the relevant time (see State Finance Law former § 112 [2] [a]).