New York State Court of Claims

New York State Court of Claims

HORNELL WASTE v. STATE OF NEW YORK, #2007-039-028, Claim No. 108932, Motion No. M-72481


Synopsis


Claimant successfully bid on one lot of scrap metal that was offered by the New York State Department of Transportation. Following purchase of the lot, claimant commenced the instant claim against the State of New York for breach of contract and/or reformation of contract on the ground that defendant misrepresented the weight of the miscellaneous scrap metal. Thereafter, claimant sought summary judgment. The Court now denies claimant’s request and finds that defendant has offered sufficient evidence in opposition to the motion to raise a triable issue of fact as to whether claimant was justified in relying upon defendant’s representation regarding the weight of the lot.

Case Information

UID:
2007-039-028
Claimant(s):
HORNELL WASTE MATERIAL COMPANY, INC.
Claimant short name:
HORNELL WASTE
Footnote (claimant name) :

Defendant(s):
STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
108932
Motion number(s):
M-72481
Cross-motion number(s):

Judge:
JAMES H. FERREIRA
Claimant’s attorney:
Paul A. Argentieri, Esq.
Defendant’s attorney:
Hon. Andrew M. Cuomo
Attorney General of the State of New York
By: Geoffrey B. RossiAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
July 24, 2007
City:
Albany
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

In December 2003, Hornell Waste Material Company, Inc. (hereinafter “claimant”) successfully bid on one lot of scrap metal that was offered by the New York State Department of Transportation (hereinafter “DOT”) through ebay.com (hereinafter “ebay”). Claimant subsequently purchased the lot for the sum of $7,500.00. In February 2004, claimant brought the instant claim against the State of New York (hereinafter “defendant”) for breach of contract and/or reformation of contract and alleged, among other things, that defendant had misrepresented a material term of the contract for the purchase of the lot. More specifically, claimant alleged that defendant advertised an offer to accept bids for the purchase of approximately 250 tons of miscellaneous scrap metal and that, after claimant won the bid and took possession of the lot, it discovered that the material weighed only 183.31 tons, 10 of which consisted of dirt. Claimant now moves the Court for an order awarding summary judgment and defendant opposes the motion.

It is well settled that “[a] motion for summary judgment should be entertained only after the moving party has established, by competent admissible evidence, that it is entitled to judgment as a matter of law” (Ware v Baxter Health Care Corp., 25 AD3d 863, 864 [2006]). “If the movant meets this initial burden, the opposing party is required to submit evidence which raises a material issue of fact to preclude an award of summary judgment” (id.). “ ‘[H]earsay evidence that is excludable at trial may be presented in opposition to a motion for summary judgment, so long as it is not the only proof submitted’ ” (Pelkey v Viger, 289 AD2d 899, 900 [2001], lv dismissed 98 NY2d 707 [2002], quoting Murray v North Country Ins. Co., 277 AD2d 847, 850 [2000]).

Pursuant to § 164 (1) of the Restatement (Second) of Contracts, “[i]f a party’s manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient.” Certainly, “[a] representation need not be fraudulent in order to make a contract voidable” (Restatement [Second] of Contracts § 164, Comment b). “However, a non-fraudulent misrepresentation does not make the contract voidable unless it is material” (id.).

Based upon a review of the claim and the movant’s papers, the Court notes that claimant does not allege that defendant knowingly misrepresented the weight of the lot, thereby eliminating any consideration of whether claimant is entitled to judgment as a matter of law on the ground of fraud (see Urquhart v Philbor Motors, Inc., 9 AD3d 458, 458-459 [2004]). The Court also notes that “the underlying transaction is a sale of goods controlled by Uniform Commercial Code article 2, and [claimant] seek[s] to recover damages solely for [its] economic loss” (EIFS, Inc. v Morie Co., 298 AD2d 551 [2002]). Thus, “their remedies against the defendant are limited to contractual remedies, and [claimant] may not maintain a tort cause of action to recover damages for negligence” (id. at 551-552). Accordingly, the Court’s analysis is confined to a determination of whether claimant is entitled to judgment as a matter of law for breach of contract and/or reformation of the contract.

With these principles in mind, the Court finds in the first instance that claimant made a prima facie showing of entitlement to judgment as a matter of law for breach of contract and/or reformation of contract. In support of its motion, claimant offers the affidavit of its owner/president, Daniel J. Spitulnik, who states, in relevant part, that “[b]efore the [b]id process began, it was represented in writing by [DOT] that scrap metal lot # 2571403464 had approximately 250 tons worth of marketable scrap[1] [and that] [t]he lot was sold in an ‘AS IS’ basis.” Spitulnik submits that after claimant won the bid and transported the lot to its yard, it was discovered that the lot actually weighed 183.31 tons and that 10 of those tons consisted of dirt. Spitulnik avers that “the State failed to represent in their bid proposition that the lot was never weighed and that the true weight was unknown.” Thus, he concludes that “DOT materially misrepresented the amount [of] scrap that was actually in the lot, and owed a duty to either weigh the lot, or disclose they had no knowledge of its true weight.” Claimant also offers, among other documents, a copy of the ebay web page containing DOT’s offer, a copy of the notification from ebay, on behalf of defendant, that claimant’s bid was accepted and a copy of the bill of sale.

DOT’s advertisement to accept bids for the purchase of the lot establishes that defendant made an offer to accept bids on the sale of one lot of miscellaneous scrap metal that it represented as weighing “approximately 250 tons.” This document, together with defendant’s subsequent notification to claimant that its bid was accepted, the copy of the bill of sale and Spitulnik’s acknowledgment that the goods were delivered, establish that a contract for the sale of the lot was formed and subsequently performed by the parties. The averments of Spitulnik that he relied upon defendant’s representation that the lot weighed approximately 250 tons, and that, upon receipt of the lot, claimant discovered that it actually weighed 183.31 tons, 10 of which consisted of dirt, establish that a breach of the contract occurred when claimant received less than the amount of scrap metal that was offered. Finally, Spitulnik attested that it is “common practice in the industry to forgive approximately [five] tons of scrap metal one way or the other,” thereby offering competent proof, in admissible form, to establish that the disparity in weight of 65 to 75 tons was a material deviation from the weight of the lot offered by defendant (compare Cohen v Cerier, 243 AD2d 670, 671 [1997]; see Restatement [Second] of Contracts § 162 [2]).

However, the Court further finds that defendant has offered sufficient evidence in opposition to the motion which raises a triable issue of fact as to whether claimant was justified in relying upon defendant’s representation regarding the weight of the lot. Defendant offers the affidavit of Joseph T. Miletti, a Resident Engineer with DOT. Miletti states, among other things, that Spitulnik won the preceding bid to remove scrap metal that was offered by defendant in December 2000. During that transaction, defendant estimated that the weight of the lot was 200 tons, and it was subsequently determined that the amount actually removed by claimant was approximately 300 tons. Miletti further provides that Bob Cracknell, an Assistant Resident Engineer who was under Miletti’s supervision at the time of the sale, informed Spitulnik that he could personally inspect the lot prior to bidding, but that Spitulnik declined to do so since he had driven past the lot on numerous prior occasions. According to Miletti, Spitulnik also informed Cracknell that he was aware that the 250 tons was an estimate and not the actual weight of the lot offered for bid.

The foregoing proof offered in opposition to the motion raises a material issue of fact as to whether claimant knew, at the time it purchased the lot, about defendant’s less-than-accurate methodology for determining the weight of scrap metal that it offers for bid and, in turn, whether claimant’s reliance upon defendant’s representation regarding the weight of the lot was justified. The proof before the Court also calls into question defendant’s ability to devise a more accurate method of determining the weight of scrap metal that is offered to prospective buyers.

Accordingly, it is hereby ordered that M-72481 is denied.


July 24, 2007
Albany, New York

HON. JAMES H. FERREIRA
Judge of the Court of Claims


Papers Considered
:
  1. Notice of Motion for Summary Judgment;
  2. Affidavit in Support of Motion for Summary Judgment sworn to on October 18, 2006 with exhibits;
  3. Affirmation in Opposition to Motion for Summary Judgment dated on December 1, 2006 with exhibits; and
  4. Responding Affidavit sworn to on January 25, 2007.

[1]. The content of the lot is described as “miscellaneous scrap metal” on the DOT web page.