Defendant moves this Court for an order pursuant to CPLR 3212 for partial summary judgment finding that certain correspondence did not constitute an enforceable amendment to a construction contract entered between defendant and third-party Matzen Construction Inc.^[FN1] Plaintiff opposes such relief.

In August 1999, Matzen Construction Inc. (hereinafter Matzen) entered into a construction contract with defendant to construct a multi-unit apartment complex. As a result of various disputes between these parties, in February 2001, defendant forwarded a written proposal to Matzen to resolve these difficulties. The parties exchanged multiple proposals, including correspondence dated July 18, 2001 sent by defendant to Matzen. This letter provided that it "attempts to address all outstanding disputed change order issues", and offered a resolution [*2]with respect to itemized and lump sum change orders and liquidated damages. Pursuant to the letter, Matzen would receive $443,000.00, including a $106,000.00 settlement incentive earned after execution of a settlement agreement and payable upon final completion of the project. The July 2001 letter also required a "written amendment to the parties' existing agreement" providing for, inter alia, mutual release of claims, obligations and liabilities. The letter was signed by defendant's member, Bruce A. Schnitz, and agreed and accepted by Matzen's Vice President - Anthony Miciotta. It is undisputed that no further agreements for settlement of the disputes were executed by the parties. In September 2001, plaintiff notified defendant that due to Matzen's voluntary liquidation, plaintiff would be undertaking the performance of Matzen's obligations under the performance and payment bonds naming defendant as obligee and plaintiff as surety. The parties do not dispute that all units were completed by September 27, 2001.

In October 2002, plaintiff commenced this action against defendant alleging breach of contract, recovery based on quantum meruit and unjust enrichment, and seeking recovery of the contract balance and payments pursuant to the alleged July 2001 incentive agreement. After issues was joined, the parties stipulated to submitting one issue before the Court, whether the July 18, 2001 correspondence constitutes an enforceable amendment to the contract between defendant and Matzen. Thereafter, defendant brought the instant motion for summary judgment seeking an order finding that the July 2001 letter is not an enforceable amendment. As such, the Court confines its analysis to this sole issue.

In support of its motion, defendant argues the July 18, 2001 letter is not binding because the letter was subject to a binding written amendment to the parties' construction contract and execution of a settlement agreement. In opposition, plaintiff argues that the July 2001 letter represents an offer, acceptance and contains consideration and, thus, is an enforceable contract. Plaintiff further argues that, at a minimum, the July 2001 letter constitutes a binding preliminary agreement. Either way, plaintiff contends that Matzen fully performed under the new schedule contained in the July 2001 letter and refrained from pursuing charges for itemized and lump sum change orders.

Initially, the Court observes that the issue is not whether the July 2001 letter constitutes an independent contract. Rather, the issue distills to whether the letter constitutes a modification to the Construction Contract. Accordingly, the Court looks to the language of the Construction Contract and its provisions for resolving disputes, such as amendments and change orders.

General Conditions § 1.1.1-1.2.1 of the Construction Contract provide that the contract could be amended or modified by a modification, and defines a modification as: a written amendment to the contract signed by both parties; a change order; or a construction change directive. As such, the Court turns its attention to whether the July 2001 letter constituted a modification of the Construction Contract in accordance with its terms. Inasmuch as the July 2001 letter is a writing signed by defendant and Matzen which purports to amend the construction contract with respect to change orders and liquidated damages, it facially comports with the requirements of the general conditions of the construction contract.

Likewise, the July 2001 letter arises to a modification under fundamental contract principles because the letter demonstrates proof of each element requisite to the formulation of a contract, including mutual assent to its terms (see, Beacon Terminal Corp. v Chemprene, Inc., 75 [*3]A.D2d 350, 354 [1980]).^[FN2] The terms of the July 2001 letter indicate that defendant made an offer to resolve all of the outstanding disputed change order issues, including issues related to liquidated damages, between the parties and such terms where accepted by Matzen by countersigning the offer. Further, in exchange for defendant's payment, Matzen accepted less than it demanded on the change orders. Moreover, the Court determines that the July 2001 letter manifested mutual assent to modify the Construction Contract because the letter itself required that the changes be in conformity with the "parties existing agreement", i.e. the Construction Contract.

Next, although the letter contemplates a separate settlement agreement including mutual release of claims, obligation and liabilities, the Court finds that defendant was already entitled to such releases under the Construction Contract - General Condition § 9.10.2, providing that final payment shall not be made without proof in a form acceptable to defendant that there are no claims, liens or encumbrances arising out of the contract. As such, this language reiterates what was already required under the Construction Contract and, therefore, it is redundant. In making this determination, the Court notes that General Condition § 9.10.2 of the Construction Contract was not amended by the July 2001 letter. Therefore, the Court determines not only that the July 2001 letter complies with General Conditions §§ 1.1.1-1.2.1 of the Construction Contract but, also, evidences an offer, acceptance and mutual assent. Accordingly, the July 2001 letter is an enforceable modification to the Construction Contract. As a final matter, the Court notes that in light of its determination that the July 2001 letter is an enforceable modification, it is unnecessary to address the parties' arguments with respect to preliminary agreements.

Based on the foregoing, defendant's motion for summary judgment is denied. Counsel is directed to appear in chambers on _______________________ to discuss the course of trial. This memorandum constitutes the Decision and Order of this Court. All papers including this Decision and Order are returned to plaintiff's attorney. The signing of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of this rule with regard to filing, entry and Notice of Entry

Albany, New York ______________________________

April 2, 2004Hon. Louis C. Benza, JSC