ORDERED, that the motion (motion sequence number 005) by defendants for summary judgment dismissing the complaint and for partial summary judgment on their first counterclaim [*2]against plaintiff is determined to the extent indicated below. Oral argument was held before the Court on January 26, 2009.

BACKGROUND

This is an action arising out of the relationship between the parties wherein plaintiff East Hampton Union Free School District, purportedly retained the services of defendant, Sandpebble Builders, Inc. ("Sandpebble"), in conjunction with a certain construction project involving renovation to the schools in the district. Defendant Victor Canseco ("Canseco") is the principal of Sandpebble. Plaintiff seeks a declaratory judgment that an agreement, dated April 2002, between plaintiff and Sandpebble is void and seeks damages against Sandpebble and Canseco for breach of duty of good faith and fair dealing, and breach of an alleged oral estimating services contract. Previously, Canseco moved, pursuant to CPLR §§3211(a)(1) and/or 3211(a)(7) to dismiss the case against him individually on the ground that the complaint was insufficient on its face to find liability on a piercing the corporate veil theory. By Order (BAISLEY, J.) dated July 18, 2007, the Court denied the motion to dismiss and Canseco appealed. The appeal is currently pending before the Second Department. Defendants have interposed a counterclaim for breach of contract.

In April of 2002, plaintiff and Sandpebble entered into a "Standard Form of Agreement between Owner and Construction Manager", for a project denoted "Renovations and Additions to the High School, Middle School and John Marshall Elementary School". This Agreement provided that the construction manager would provide the School District pre-construction and construction management services and may be terminated upon 7 days written notice if the construction project is permanently abandoned (Agreement at ¶9.3). The Agreement contained a merger clause and provided that it may only be amended or modified by written instrument (Agreement at ¶10.6). As relevant to the motion sub judice, the Agreement provided that compensation to Sandpebble would be in accordance with an attached Schedule A. Schedule A contained the following provisions:

Compensation and payments for Basic Services as per Paragraph 13.2 shall be calculated as follows:

Based on a project duration not to exceed thirty (36) months, total compensation shall be Five Per Cent (5%) of the total project cost as defined in Article 5.

Regardless of the duration of each phase listed below, if the total project duration does not exceed thirty-six (36) months, the total compensation for Basic Services shall be Five Per Cent (5%) of the total project cost.

This total compensation shall be based on a pre construction phase duration not to exceed eighteen (18) months and a construction phase duration not to exceed eighteen (18) months. [*3]

Should the duration of either the pre construction or construction phase of the project extend past the eighteen months allocated for each of these two phases, additional compensation shall be considered earned and additional payments to the Construction Manager shall be made on a monthly basis (pro rated for part of a month) as follows:

.0833% of the total project cost per month during the pre construction phase

.194% of the total project cost per month during the construction phase.

Since the exact total project cost is not known at the time of the execution of this contract, it shall be assumed to be eighteen million dollars ($18,000,000).

For billing purposes, monthly compensation for Basic Services shall be billed at this assumed figure of eighteen million dollars ($18,000,000) until the referendum. At that point, the assumed total project cost shall be changed to 80% of the referendum amount and monthly billing amounts past and future shall be adjusted accordingly.

Defendant, Sandpebble, now seeks summary judgment dismissing plaintiff's complaint, and partial summary judgment on its first counterclaim for breach of contract. Defendant Canseco also seeks summary judgment on the piercing the corporate veil claim asserted against him individually. According to defendants, the parties entered into the April 2002 Agreement, under which Sandpebble was to provide construction management services for the plaintiff relating to renovations to the high school, middle school and an elementary school. Sandpebble claims it provided such services through 2005 and then in 2006, after the voters approved a bond resolution relating to new renovations to these schools, plaintiff terminated its services. According to Sandpebble, the termination was not in accordance with the provisions of the April 2002 Agreement. Defendants argue that the April 2002 Agreement was a clear, valid and enforceable contract, under which plaintiff is obligated to pay Sandpebble for the services it rendered. Defendants assert that there were no oral agreements as alleged by plaintiff but rather all of the items to be performed were part of the original April 2002 Agreement.

Canseco submits an affidavit in support of the motion for summary judgment. Canseco states that in September 2001, the School Board, at a public meeting, resolved to retain Sandpebble as its construction management firm. Thereafter, Canseco asserts that the April 2002 contract retained his company as construction manager for a project to renovate the plaintiff's three(3) school buildings. This contract was signed by Deborah Mansir, then President of the School Board for plaintiff. [*4]However, at the time of the execution of the contract, the precise scope of the project had not yet been determined and therefore, Schedule A to the contract (as set forth above) specifically provided that the total project cost was not yet known but would be assumed to be eighteen million dollars ($18,000,000.00) for billing purposes only. Canseco states that noone ever advised Sandpebble of a need for the District to approve this contract at a public board meeting and this issue was not raised until some time in 2005. It was only when the parties reached an impasse in 2006 over potential revisions to the contract that the Board stated that the original April 2002 contract was invalid and further that the 2002 project had been abandoned. Defendants argue that this position is contradicted by the plaintiff's actions in continuing to pay defendant into 2005. Moreover, defendants submit documents from 2005 including a January 2005 Referendum by the School District listing Sandpebble Builders Inc. as construction managers for the project.

In support of the motion, defendants also submit an affidavit from Carey Reinhardt, former business manager of the plaintiff, who sets forth the manner in which the defendant's bills were paid. Reinhardt states that after receipt of a contract, monies were encumbered, a purchase order was created and reduced as bills were paid. Then the bill would be checked by a person with knowledge and ultimately provided to plaintiff's treasurer who would disburse a check. Notably, each payment had to be approved at plaintiff's board meetings. Reinhardt asserts that Sandpebble's bills were paid in accordance with these procedures.

As set forth above, defendants argue that the April 2002 contract provided that the exact price of the project was unknown and it would be assumed to be $18 million for billing purposes only. That contract also stated specifically it was for construction management services for renovations to the 3 schools, that once a referendum was approved, the billing would be based on 80% of the referendum amount and that upon completion of the project, payments would be recalculated. Ultimately, in 2006, the voters of the district approved a referendum for an $80 million project covering the 3 schools. From 2002 through 2005, Sandpebble argues, it performed construction management services, billed the School District and was paid. During this same period, defendants allege that plaintiff never told them that the original project had been abandoned and, in fact, there was never a referendum for an $18 million project. Instead, during that time, plaintiff was issuing publications naming Sandpebble as construction manager for the plaintiff as late as June 2005 and told voters that it had a vested interest in the proposed $80 million project.

Based on the foregoing, defendants seek summary judgment dismissing plaintiff's complaint and partial summary judgment on its counterclaim for breach of contract.

Plaintiff's counsel submits an affidavit in opposition to the motion for summary judgment wherein he initially argues the motion is premature, as no party has yet been deposed. He asserts that there is an outstanding motion to compel discovery regarding the project contemplated by the April 2002 agreement. Counsel argues that the issues extant include, inter alia, which construction management and estimating services were contemplated by the April 2002 agreement; what construction management and estimating services were actually provided by Sandpebble; and whether Sandpebble properly adhered to corporate formalities. Plaintiff asserts that the deposition [*5]of defendant Canseco especially is crucial to the determination of these issues. Additionally, plaintiff argues that Sandpebble has not produced any ledgers or financial documents indicating its job costs, nor any documents relating to the claim to pierce the corporate veil.

On the merits of the motion for summary judgment, plaintiff argues that the April 2002 Agreement was not valid, was void, ultra vires and unenforceable because the Agreement was not specifically approved by the School Board. Alternatively, plaintiff asserts that even if the Agreement is/was valid, it was terminated after the $18 million dollar project was abandoned. Additionally, plaintiff alleges that the complaint states a claim for breach of duty of good faith and fair dealing and that they have established a corporate veil piercing claim against Canseco. Plaintiff submits extensive affidavits in opposition to the motion for summary judgment, including former and current School Board members, the Superintendent of the school district, several attorney affidavits and an expert affidavit.

Raymond Gualtieri ("Gualtieri"), Superintendent of Schools, submits an affidavit in opposition to Sandpebble's motion for summary judgment. Gualtieri joined the School District in 2003 and states that he understood at that time a previously contemplated $18 million project had been abandoned, and based on a poll of public opinion, a $45 million renovation had also been abandoned. He states that he retained new architects who conceived a major renovation (the "$90 million project") and then spoke to the architect and Sandpebble in 2004 to tell them that they needed new contracts if a $90 million project was to proceed. Gualtieri states he told Canseco repeatedly in 2004 that the 2002 agreement had been terminated and also claims he asked Sandpebble for back up on some of its bills and failed to get adequate responses. Gualtieri alleges that the School District business manager at the time had only a high school education and was incapable of overseeing such a large project. The referendum on the $90 million project failed in mid-2005 and was considered abandoned. Thereafter, the School District began considering a different $80 million project, for which he asked Sandpebble to perform certain estimating services. He states that it was understood that the estimating fees would be based on Sandpebble's new contract, to be entered into, with the School District based on the $80 million project.

The $80 million project was approved in March 2006 and Canseco asked to meet with the Board in executive session. However, Canseco had not provided the new contract yet and would not provide the District with his estimating work until he ironed out his contractual dispute with the School District. At this time the School District, through Gualtieri began negotiating Sandpebble's new agreement but the negotiations fell through due, in his opinion, to Sandpebble's unreasonable demands regarding the cost of an on site superintendent for the project. Thus, the School District was forced to hire a new estimator in June 2006. Despite continued negotiations however, in September 2006, Sandpebble declared it would only operate under the terms of the April 2002 agreement as construction manager. The School Board then issued a request for proposals (" RFP") and in October 2006, hired another construction manager. It formally informed Sandpebble in September 2006 that the April 2002 contract had been terminated. Gualtieri asserts that Canseco's bad faith delayed the construction project, Sandpebble never had any intention of negotiating and acted in bad faith causing the School District to expend unnecessary legal fees. [*6]

Plaintiff's opposition is further supported by an affidavit of John Tanzi ("Tanzi") , an employee of the School District's architect, ("BHA"), familiar with the facts from 2001 through 2007. Tanzi essentially reiterates the superintendent's affidavit and concludes that Canseco's failure to enter into a new contract with the School District caused a delay in the construction project and an increase in costs of 15%. He says the architect understood that a new contract was needed for services for the $80 million project and entered into such contract in April 2005.

Michael Peters, a former attorney with Morgan Lewis who was involved between 2004 and 2007 in the renegotiations of the contracts between his client, the School District and Sandpebble and BHA (architect), also submits an affidavit in opposition to the motion. Peters was engaged to negotiate the new contracts. The April 2002 contract provided that Sandpebble was to be paid 5% of the total project cost plus expense reimbursements. Neither this agreement nor the original BHA agreement were based on construction costs as is typical and due to the large difference in the projects, there was a need for new agreements. BHA understood this and so agreed. BHA's new contract was based on 6% of the construction costs, not based on total costs. Peters states he wrote to Sandpebble in April and May 2005 giving them formal, written notice that the April 2002 agreement had been terminated because the $18 million project had been terminated. The May, 2005 letter also informed Sandpebble that the April 2002 Agreement had not been formally authorized and he wrote the same to Sandpebble's counsel, Stephen Angel ("Angel") in November 2005. He learned after the $80 million bond issue was passed that Canseco was holding up certain estimates he had performed for the project until he could get his new contact approved. On June 9, 2006, in meeting with attorneys, a basic agreement was reached, basing Sandpebble's fee on 4% of construction costs. However, Sandpebble refused to provide a second superintendent on the job for a reasonable cost, the relationship deteriorated again and the School Board was forced to hire another estimator, although negotiations continued throughout July and August 2006. On September 15, 2006, Angel wrote to Peters rejecting the contract the parties had spent over 2 years negotiating. The School District then issued an RFP and hired another Construction manager in October 2006. Based on the foregoing, Peters concludes that Canseco and Angel were negotiating in bad faith.

Another of plaintiff's counsel, Shana Cappell, also submits an affidavit in opposition in which she states there was never a resolution by the School Board approving the April 2002 Agreement with Sandpebble. She also attaches School District documents demonstrating that the $18 million project was a completely different one from those later contemplated and ultimately approved by the voters.

Plaintiff also submits an affidavit from Robert Lewis P.E., ("Lewis"), hired consultant, in opposition to the motion. Lewis states that he is the Associate Director of Navigant Consulting, Inc., an international firm of consultants who provide analysis and advice to corporations, governments, law firms, regulatory agencies, trade associations, and international agencies. Lewis opines that first, the project originally contemplated by the April 2002 Agreement was abandoned in favor of different projects. He bases this on his review of the initial contract between the architect and the School District and concludes that the $18 million was not a placeholder; but, rather, based on an actual smaller project that never went to the voters. That project had an estimated schedule of 3 [*7]years. Subsequently, in September 2002, the School District contemplated a $45 million project, which was much larger and more complex, encompassed a 5 year construction plan, but was never put to the voters due to unfavorable public opinion. In early 2004, after receiving recommendations of a consultant, the Board began to consider a much larger project, the so-called $90 million project, which called for new construction of a middle school and major renovation of the high school, requiring an 8 year construction plan. This $90 million project was voted down in June 2005. Thereafter, the District began considering the $80 million project, again, according to Lewis, a different project, which renovated the middle school instead of building a new one and also renovated the elementary school, which was not called for in the previous project. This $80 million project would occur over a 6 and ½ year construction period.

Lewis also states that Sandpebble, as construction manager, did not provide the School District with adequate written work product in connection with its estimating services. He also opines that Sandpebble did not produce documents that a prudent construction manager would maintain in the ordinary course of business.

Deborah Mansir, ("Mansir"), a former member of the School Board from 2000-2003 and president of the Board from 2000 -2002, submits an affidavit in opposition to the motion for summary judgment. Mansir states that her duties as president of the School Board included signing all contracts upon School Board approval by resolution and that it was the regular practice of the Board to approve contracts by resolution of the majority of the Board. She states that an $18 million renovation project was being considered in 2001 and although the Board approved Sandpebble in Sept 2001 as a construction manager for the district, she states that the Board never approved a contract for any particular project. Mansir states she was not authorized to sign a contract with Sandpebble and further that Sandpebble always knew that the work they were to perform was based on a future bond approval for that specific $18 million project and that it never occurred. She states that a subsequent $45 million dollar project was also considered and dropped by the Board as a result of lack of public support and the current $80 million project is a completely different one from those previously considered.

Wendy Hall, ("Hall"), a current member of the School Board who served as president of the Board from 2002-2003 and 2005- 2006, also submits an affidavit in opposition. Hall states that it is her understanding that all contracts signed by the president of the Board were to be approved by a majority of the Board of Education. She states she was a member of the Facilities Committee during 2002-2006 and Canseco attended some meetings, at his own or upon request but was not a member of the Committee. Hall states that although the Board approved Sandpebble as a construction manager for the District, it never authorized anyone to enter into a contract with Sandpebble. Moreover, she argues, Sandpebble knew, in any case, that its role would be limited to acting as construction manager to be paid from the proceeds of an $18 million dollar bond offering. Due to the Board's realization that a much larger project was needed, the Board abandoned the $18 million bond offering and the concomitant project and began considering a larger one. In November 2002, the Board approved sending a $45 million bond resolution to the public; however, in light of significant public opposition, the Board also abandoned this project. In January 2004, after meetings [*8]with citizens' groups, the Board approved a bond resolution for a $90 million project. During this time, questions arose concerning Sandpebble's invoices and in April 2005, the Board had its counsel, Morgan, Lewis send a letter to Canseco stating that the April 2002 contract had been terminated in view of the abandonment of the $18 million project. BHA, the architect, sent a similar letter, entered into a new contract for its architectural services, approved by the School Board. The referendum on the $90 million project failed and the Board began to consider yet another project, the so-called $80 million project. The Board and Sandpebble began negotiating the terms of a new contract and in March 2006, the voters approved the $80 million construction project. Letters were sent back and forth and negotiating sessions between the two parties and their attorneys ensued. As a result of Sandpebble's delay, the Board was forced, in June 2006, to hire a new estimating firm but continued to try to negotiate with Defendant for construction management services on the $80 million project. Meanwhile the project was being delayed due to Defendant's recalcitrance. Finally, in September, 2006, Angel sent a letter to plaintiff's counsel unilaterally terminating negotiations and stating it would perform the $80 million project under the terms of the April 2002 agreement. Thereafter, the Board did an RFP and chose another construction manager.

As a result of Defendant's bad faith the project was unreasonably delayed and the plaintiff was forced to expand over $100,000 in legal fees.

Former Board members Stephen Talmage (member of the Board since 1996 and vice

president from 2003-2006), Michael Tracey (member of the Board since 1992), and John Ryan Sr. (Board member since 1993), all submit affidavits in opposition to the motion for summary judgment. Their affidavits are essentially identical to that of Wendy Hall. Based on the foregoing, plaintiff seeks denial of the motion for summary judgment in its entirety.

Canseco submits a reply affidavit wherein he notes that in February of 2005, Superintendent Gualtieri approved and signed a $15,000 check to Sandpebble, the last check purportedly tendered under the April 2002 contract. He further states that he was in fact, a member of the Facilities Committee from March of 2002 through June of 2006, as reflected on agendas annexed to the papers. Canseco reiterates that from the years commencing in 2002 when it performed construction management services, plaintiff never advised that the project which was the subject of the April 2002 Agreement had been abandoned. He refers to several documents from 2004 and 2005 which list Sandpebble as the construction manager on the project and notes that some of these documents estimate the costs of the project in excess of $80 million dollars.

Defendant's counsel, Stephen Angel submits an affidavit and annexes copies of relevant By-Laws of the plaintiff. Specifically, By-Law 1211 states that the President of the Board of Education shall sign all contracts on behalf of the Board of Education, however, there is no requirement that his/her signature be authorized by a majority vote of the Board. By law 1225 requires the Board Attorney to approve contracts and other legal negotiations entered upon by the Board. By Law 1222 requires the District Treasurer to pay all authorized obligations of the District and states that no moneys shall be paid or disbursed by the Treasurer except upon written order of the Board of Education. In the case at bar, defendants note, plaintiff paid Sandpebble from 2002 [*9]through 2005. Additionally, By Law 1224 states that the Treasurer shall only pay out claims upon approval of the internal claims auditor. The relevant claims auditor, Pat Corso submits no affidavit that refutes that Sandpebble was properly paid for services rendered.

Defendants further challenge the affidavits from the School Board members, who, defendants note, fail to explain why they allowed Sandpebble to perform under the April 2002 Agreement. Moreover, defendants argue that plaintiff had the authority to enter into the contract, irrespective of whether Mansir properly executed the agreement, and thus, the contract itself is capable of being ratified, which plaintiff did by its actions. Specifically, defendants assert, the approvals by the Board and Business Manager of the payments to Sandpebble over a period of time acted as ratification of the agreement. Defendants also reiterate that the April 2002 contract was clear and unambiguous and that the Court should not consider extrinsic evidence as to what the parties intended. The document specifically left open the exact work to be performed and the total cost of the project and thus, the lack of this information in the agreement is not an ambiguity. Rather, these were items to be determined at a later time, but within the scope of a project described as renovations and additions to the high school, middle school and elementary school. Therefore, defendants argue that the motion for summary judgment should be granted and the complaint dismissed in its entirety and also that summary judgment should be granted on its counterclaim for breach of contract.

The Court's review must begin with an analysis of the validity of April 2002 Agreement signed by the then President of the School Board. Here, the Court is presented with a resolution, authorizing the hiring of Sandpebble as the School District's construction manager, yet no specific resolution authorizing the President to execute the subject agreement, and School District By-Laws authorizing the President to execute contracts on behalf of the District. Moreover, it is undisputed that plaintiff paid Sandpebble for its services as construction manager from 2002 to at least 2005 and that such payments were made in accordance with By-Laws that require audited invoices, and approval by the School Board and the District Business Manager.

Reduced to the essentials, plaintiff's argument is that although Education Law §17 09(6) empowers the School Board to construct and renovate the schools within the district, General Construction Law §41 requires that a majority of the School Board authorize the specific contract. This argument is supported by the affidavits of the various Board members who state that it was their belief that the Board was required to approve the District contracts and such is further supported by the Board's resolution, which did specifically authorize the contract with BHA as the architects on the construction project.

On the other hand, defendants assert that General Construction Law §41 does not require the majority vote of the Board for an enforceable contract to exist. They argue, however, that even if [*10]the President lacked actual authority to enter into the contract (which they do not concede), she either had apparent authority and/or the plaintiff ratified the contract by its subsequent actions. Not only did plaintiff pay Sandpebble over the course of the next several years while he was performing construction management services for plaintiff and but plaintiff listed Sandpebble as the construction manager in numerous public documents during the course of the project.

Here, the Court is inclined to agree with plaintiff that Mansir did not have actual authority to enter into the April 2002 Agreement with Sandpebble. While the School Board did authorize, by resolution, the hiring of Sandpebble as the construction manager, it did not authorize the President to sign a contract. See, e.g, Willis Flooring Co, v. Board of Education of Terryville-Port Jefferson Station Union Free School District, 243 A.D. 554, 275 NYS2d 895 (2d Dept. 1934). If that was the only action by the School District, the Court would agree that the contract was void and the analysis would end. However, the Court must look to the subsequent actions by the plaintiff to determine whether in fact, the School District ratified the 2002 Agreement. First, the Court notes, that this is not a case wherein Mansir entered into a contract which the District itself did not have the authority to execute. See, contra, Seif v. City of Long Beach, 286 NY 382 (1941). Here, it is does not appear disputed that the District, under the Education Law, is empowered to enter into a contract such as the one in the case sub judice. Rather, the issue is merely the effect of a contract executed by the President of the Board without specific approval by the School Board.

The Court of Appeals recognized long ago that a municipality may ratify a contract for a public purpose which is ultra vires and such contract becomes valid and binding. Brown v. City of New York, 18 Sickels 239, 1875 WL 10872 (1875). It is well settled that a "municipality may ratify a contract made on its behalf which it has the authority to make even if the contract was initially invalid due to a defective execution or because the municipal officer who purported to execute it did not have the requisite authority." Imburga v. City of New Rochelle, 223 AD2d 44, 645 NYS2d 111 (3d Dept. 1996). A municipality may ratify an agreement that was not previously approved by the governing body by subsequent conduct, such as making payments pursuant to the agreement. See, e.g, JRP Old Riverhead Ltd., v. Town of Southampton, 44 AD3d 905, 844 NYS2d 132 (2d Dept. 2007).

To obtain summary judgment, the moving party must make a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the absence of any material issues of fact. Goldberger v. Brick & Ballerstein, Inc., 217 AD2d 682, 629 NYS2d 813 (2d Dept. 1995) (internal citations omitted). The burden then shifts to the party opposing the motion to come forward with proof in admissible form demonstrating there are genuine issues of material fact which preclude the granting of summary judgment. Zayas v. Half Hollow Hills Cent. School Dist., 226 AD2d 713, 641 NYS2d 701 (2d Dept. 1996). [*11]

On this issue, taken as a whole, the Court finds that defendants have met their prima facie burden of demonstrating that plaintiff ratified the April 2002 Agreement. First, the submissions reflect that plaintiff, in accordance with its own By-Laws, made payments to Sandpebble from 2002 to 2005. Sandpebble submitted invoices to plaintiff, which were audited by the District's internal auditor and approved for payment. The checks issued to Sandpebble included the words "By Order of the Board of Education" on the face of the disbursement and the last check paid to Sandpebble was in February 2005. Moreover, Canseco is listed as a member of the Facilities Committee through June of 2006, as listed on agendas annexed to the motion papers. Additionally, and just as compelling, documents prepared by or on behalf of plaintiff from 2004 and 2005, including a "September 2004 Referendum Alternate", a "January 2005 Referendum Alternate" and a drawing by BHA dated August 8, 2005, for work to be done at the elementary school, all list Sandpebble as the construction manager on "the project". Moreover, a document entitled "Building Referendum, A Plan for the Future", published prior to the failed June 2005 $90 million dollar referendum, also listed Sandpebble as the District's construction manager.

In opposition, plaintiff failed to raise a triable issue of fact, despite the voluminous affidavits submitted to the Court. The affidavit by Mansir stating that she did not have authority to sign the April 2002 Agreement and the affidavits by the other Board members stating that it was their understanding that contracts required Board approval, lack probative value on the issue of ratification. Moreover, plaintiff's allegations that the former District Business Manager had only a high school education and that payment of some of Sandpebble's invoices was suspect, are troubling to the Court in that they are not based upon any evidence.

Based on the foregoing, the Court grants defendants partial summary judgment and dismisses that part of the first cause of action of the Complaint which seeks a declaration that the April 2002 document is void.

[*12]

On this motion for summary judgment, the Court is faced with a contract, which by its own terms, states that the exact cost of the project is not known, but describes the scope of the project as renovations to the high school, middle school and an elementary school. This Agreement further explicitly stated that since the exact cost was unknown, it was going to be assumed for billing purposes to be $18 million dollars and that such would be adjusted when the precise amount was known at a later date. The Court agrees with defendants that based on the plain and unambiguous terms of the agreement, Sandpebble was to be the school district's construction manager for the renovation of three schools and the cost of the project was left to be determined. The contract, together with the extensive evidence submitted that Sandpebble continued to work on the project and that plaintiff continued to represent that Sandpebble was the construction manager as late as 2005 or perhaps later, is sufficient to meet defendants' prima facie burden of summary judgment dismissing plaintiff's claim that the 2002 Agreement was abandoned.

However, in opposition, plaintiff has raised triable issues of fact regarding whether the project contemplated by the 2002 Agreement was subsequently abandoned and if so, whether plaintiff properly terminated the contract with Sandpebble. The submissions reflect that over the course of the years following the execution of the April 2002 Agreement, the cost of the project dramatically increased from $18 million dollars to $45 million dollars to $90 million dollars, before ultimately getting approved by the voters at $80 million dollars. Sandpebble provided construction management services to plaintiff during the years 2002 through at least 2005, if not later, but there are questions of fact as to whether such services were all being provided pursuant to the 2002 Agreement. Moreover, plaintiff submits evidence that it notified Sandpebble a minimum of three (3) times in writing in both 2005 and 2006 of its belief that the April 2002 Agreement was abandoned and also states that from the period between October 2002 and October 2004 Sandpebble did not bill plaintiff.

The Court finds, that based on the foregoing, plaintiff has raised triable issues of fact on the issue of whether the project contemplated in the April 2002 Agreement was permanently abandoned and the Agreement properly terminated in accordance with its terms. Therefore, that portion of defendants' motion which seeks dismissal of the Complaint which seeks a declaratory judgment that the April 2002 Agreement was abandoned and terminated is denied. In light thereof, that part of the motion which seeks dismissal of the causes of action of the Complaint for breach of oral estimating services contracts and breach of covenants of good faith and fair dealing in the purported negotiations of a new contract is denied. For the same reasons, defendants' motion for summary judgment on its counterclaim for breach of contract is also denied. The issues on the counterclaim are inextricably linked to the issue of whether the 2002 contract was abandoned and terminated.

Finally, with regard to defendant Canseco's motion to dismiss the claims against him individually, that request is denied. Canseco previously moved to dismiss the causes of action against him individually and such motion was denied by the Court (BAISLEY, J.) by Order dated July 18, 2007. Canseco appealed the Order and such appeal is currently pending, with oral argument having been held in October of 2008 and thus, a determination is likely in the near future. In light of the appeal, and the fact that discovery has been minimal on the issue of the piercing the corporate [*13]veil claim, the motion for summary judgment by Canseco is denied as premature. The discovery issues in this regard are addressed in the Court's Decision and Order on the discovery motions issued simultaneously herewith.

Counsel are directed to appear for a compliance conference on April 29, 2009 at 9:30 a.m. before the undersigned.

This constitutes the DECISION and ORDER of the Court.



Dated: March 16, 2009

Riverhead, New York

Emily Pines, J. S.C.