In this breach of contract action regarding the interpretation of a contract between two public entities, Defendant County of Nassau (the "County") moves to dismiss Plaintiff Metropolitan Suburban Bus Authority's (the "Authority") Complaint pursuant to CPLR 3211(a)(1) and (a)(7). Plaintiff opposes. For the reasons set forth below, Defendant's motion is granted, and the Complaint is dismissed in its entirety.

According to the Complaint, the Authority, a subsidiary of the Metropolitan Transportation Authority, began operations in order to provide bus service for the people of Nassau County. (Cmpl. ¶ 2). In January 1973, the Authority and the County entered into a Lease and Operating Agreement that dictated the terms under which the Authority would provide bus service in Nassau (the "Agreement"). (Cmpl ¶ 1).

The Authority provided bus service to Nassau for nearly 40 years. On April 27, 2011, the Authority notified the County, that it planned to terminate the Agreement as of December 31, 2011, for budgetary reasons. (Cmpl. ¶ 2, 18). On January 1, 2012, the Authority ceased providing bus services and Nassau privatized the operation of county buses. (Cmpl. ¶ 17).

The instant litigation has its genesis in the Authority's wind-down process. Under Section 13 of the Agreement, entitled "Termination," the Authority argues that the County became liable for the costs of all Authority employees who as of January 1, 2012 "had been engaged or primarily engaged in furnishing [bus] services." (Cmpl. Ex. C). Accordingly, the Authority has billed the County for roughly $11 million of related [*2]employment costs. The County argues that it is not responsible for such costs because there were no Authority employees "principally engaged in furnishing the omnibus service" as of January 1, 2012. The County has not paid any amount billed.

The Authority commenced this action on July 10, 2012, asserting that Nassau County's failure to make payments under Section 13 of the Agreement constitutes(i) breach of contract, (ii) breach of an implied covenant of good faith and fair dealing, (iii) unjust enrichment, (iv) anticipatory repudiation, (v) promissory estoppel, and Plaintiff seeks (vi) a declaratory judgment, along with costs and attorneys' fees. The County now moves for dismissal of the Complaint in its entirety. The Authority opposes.

I.Defendant's Motion to Dismiss

Defendant moves to dismiss the Complaint pursuant to CPLR 3211(a)(1) and (a)(7), on the grounds that the Plaintiff fails to state a cause of action and that the terms of the Agreement foreclose Plaintiff's claims.

A.Motion to Dismiss Standard

On a motion to dismiss a complaint for failure to state a cause of action, all factual allegations must be accepted as truthful, the complaint must be construed in a light most favorable to the plaintiff, and the plaintiff must be given the benefit of all reasonable inferences. Allianz Underwriters Ins. Co. v. Landmark Ins. Co., 13 AD3d 172, 174 (1st Dep't 2004). "We . . . determine only whether the facts as alleged fit within any cognizable legal theory." Leon v. Martinez, 84 NY2d 83, 87-88 (1994). Ultimately, under CPLR 3211(a)(1), "dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law." Leon, 84 NY2d at 88.

B.Breach of Contract Claim

The parties do not dispute any factual allegations in the Complaint. The sole dispute in this case involves the interpretation of Section 13(ii) of the Agreement. Section 13 provides that:

Upon. . . termination [of the Agreement]: . . . (ii) the COUNTY, pending the disbanding or the transfer to the payroll of the COUNTY or of its designee of that part of the work force of the AUTHORITY (including its officers and supervisory personnel) engaged or principally engaged in furnishing the omnibus service which is the subject of this Agreement, shall immediately become responsible for the payment of all costs and expenses of the AUTHORITY attributable to such [employees] . . . .

(Cmpl. Ex. A at 13). [*3]

Plaintiff argues that the language of Section 13(ii) requires the County to pay for the substantial costs related to disbanding the Authority's workforce upon termination of the Agreement. Plaintiff contends that the economic realities show its interpretation is reasonable. Plaintiff posits that after termination of the Agreement, it no longer had any funding source that it could use to pay its post-termination obligations. As a non-operating entity, the Authority no longer receives fare-box revenues or government subsidies. Further, Plaintiff argues that the Agreement contemplated the County's post-termination payment because all assets reverted to the County's ownership upon termination under Agreement Section 13(i). Section 13(i) states that "the right to possession, in place, of the leased assets shall revert without further act of the parties to the COUNTY [upon termination]." (Cmpl. Ex. A at 13).

Defendant argues that the language of Section 13(ii) is only applicable if the County required Authority employees to provide bus service after termination. Defendant contends that the present-tense of the word "furnishing" in Section 13(ii), which states "principally engaged in furnishing the omnibus service," shows that the County is only liable for costs related to Authority employees currently "furnishing" services. Because no Authority employees were furnishing any services after the termination date, the County concludes it is not responsible for any employee costs. Plaintiff counters that it would be illogical for the Authority to continue to provide bus services after it terminated the Agreement to provide bus services.

When dealing with issues of contract interpretation, courts must construe the agreement according to the parties' intent, and the best evidence of what parties to a written agreement intended is what was said in the writing. See, e.g., Slatt v. Slatt, 64 NY2d 966, 966 (1985). Courts may not fashion a new contract for the parties under the guise of interpreting the writing. See, e.g., Tonking v. Port. Auth. of NY & N.J., 3 NY3d 486, 490 (2004) (holding that a court may not "rewrite the contract and supply a specific obligation the parties themselves did not spell out"); Flag Wharf, Inc. v. Merrill Lynch Capital Corp., 40 AD3d 506, 507 (1st Dep't 2007) ("Courts will not rewrite contracts that have been negotiated between sophisticated, counseled commercial entities"). The courts also determine, as a matter of law, whether ambiguity exists by examining the agreement as a whole. See Kass v. Kass, 91 NY2d 554, 566 (1998); Nappy v. Nappy, 40 AD3d 825, 826 (2d Dep't 2007). An agreement is ambiguous where it is, on its face, susceptible to two or more interpretations. See Nappy, 40 AD3d at 826.

Although inartfully drafted, this Court finds that the Agreement is not ambiguous as a matter of law. By referring to the remainder of Section 13, as well as the purpose of the Agreement as whole, Section 13(ii) is given a ready meaning.

The balance of Section 13 reveals an intended scheme in the event of termination, in which the County assumes responsibility for actively running bus service in Nassau. The second paragraph of Section 13 states that "in the event the County wishes to continue the operations previously provided by the Authority," then the Authority must [*4]turn over its books, records and contracts. (Cmpl. Ex. A at 14). The idea that Section 13 governs the County's take-over of bus operations comports with Section 13(i), which states that all leased assets used by the Authority will revert to County control upon termination. (Cmpl. Ex. A at 13).

Further, the second sentence of Section 13(ii) provides that "the Authority will comply with all directions of the County respecting such work force." (Cmpl. Ex. A at 14). If the Authority was solely disbanding its workforce, there would be little need for input from the County. However, if the County needed to operate its own bus service, it would require both the assets that the Authority had been leasing (Section 13(i)) and the Authority bus drivers whom the County could now direct (Section 13(ii)).

Plaintiff's economic contentions are unavailing. The Authority argues that it cannot be responsible for employee costs post-termination because it does not have any revenue stream. However, the final sentence of Section 13 states that the Authority must assign all gasoline contracts to the County upon termination, "subject to the continuing responsibility of the Authority to the County for its prior defaults and delinquencies under such contracts." (Cmpl. Ex. A at 15). The Authority's continuing monetary liability regarding defaults on gasoline contracts shows that the Agreement contemplated that the Authority could be responsible for post-termination costs.

Further, Section 5 of the Agreement states, and the Authority concedes, that the County was under no obligation to fund the Authority operations, pre-termination, in providing bus service to the cititzens of Nassau County. See Cmpl. Ex. A at 8-9 ("To enable the COUNTY to determine whether and to what extent it shall make such annual financial contributions, the AUTHORITY shall [provide certain information]"). Yet under the Authority's interpretation of Section 13(ii), the County would suddenly be required to fund the Authority as soon as the County no longer receives bus services.

The Authority's proposed interpretation of the Agreement is contrary to the scheme delineated in Section 13. Therefore, looking at the contract "as a whole[,] and the intention of the parties manifested thereby," the Agreement conclusively establishes a defense to the asserted breach of contract claim as a matter of law. Kass v. Kass, 91 NY2d 554, 566 (1998).

C.Remaining Claims

Defendant also moves for dismissal of the claims for breach of the covenant of good faith and fair dealing, unjust enrichment, promissory estoppel, anticipatory repudiation and declaratory judgment. First, Plaintiff's causes of action for breach of the implied covenant of good faith and fair dealing, unjust enrichment and promissory estoppel are precluded because of the existence of an enforceable contract governing the subject matter of the claims. See, e.g., Sebastian Holdings, Inc. v. Deutsche Bank, AG., 108 AD3d 433, 433 (1st Dep't 2013) (dismissing quasi contract and breach of implied [*5]covenant of good faith claims due to express contract among parties covering same subject matter); Susman v. Commerzbank Capital Mkts. Corp., 95 AD3d 589, 590 (1st Dep't 2012) ("a claim [for promissory estoppel] cannot stand when there is a contract between the parties"). The Complaint here supplies no basis to support Plaintff's claims other than a breach of alleged contractual duties.

Plaintiff's cause of action for anticipatory repudiation also cannot lie. An anticipatory breach of contract is one that occurs before performance of a contractual duty is due. See, e.g., Kaplan v. Madison Park Grp. Owners, LLC, 94 AD3d 616, 617 (1st Dep't 2012). Here, the Court has determined that Nassau County owes no duty under the Agreement, and there can be no anticipatory repudiation of a duty not owed.

Plaintiff's final cause of action for declaratory judgment declaring the rights of the parties is also dismissed. The first cause of action for breach of contract provides an adequate remedy and renders the declaratory judgment unnecessary. See Artech Info. Sys., L.L.C. v. Tee, 280 AD2d 117, 125 (1st Dep't 2001) ("There is no basis for a declaratory judgment against [defendant] since the first cause of action for breach of contract affords [plaintiff] an adequate remedy.")

Defendant's remaining arguments are rendered moot. The Court has considered Plaintiff's other arguments and finds them unpersuasive.

(Order of the Court follows on next page.)

For the reasons set forth above, it is hereby

ORDERED that defendant County of Nassau's motion to dismiss is GRANTED, and the Complaint is dismissed with prejudice and with costs and disbursements to Defendant County of Nassau as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that the Clerk is directed to enter judgment accordingly.

This constitutes the decision and order of the Court.

Dated: New York, New York

August 26, 2013

ENTER:

/s/

_______________________________

Hon. Eileen Bransten, J.S.C.