10-0415-cv
R ubinstein v. C lark & G reen, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMM ARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUM M ARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. W HEN
CITING A SUM M ARY ORDER IN A DOCUM ENT FILED W ITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (W ITH THE NOTATION
“SUM M ARY ORDER”). A PARTY CITING A SUM M ARY ORDER M UST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
York, on the 12 th day of October, two thousand ten.
PRESENT: ROBERT D. SACK,
BARRINGTON D. PARKER,
REENA RAGGI,
Circuit Judges.
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RICHARD P. RUBINSTEIN, KATHERINE KOLBERT,
Plaintiffs-Appellants,
v. No. 10-0415-cv
CLARK & GREEN, INC.,
Defendant-Appellee.
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APPEARING FOR APPELLANTS: JON H. ADAMS (Vincent L. DeBiase, on the
brief), Corbally, Gartland and Rappleyea, LLP,
Poughkeepsie, New York.
APPEARING FOR APPELLEE: JASON L. SHAW, Whiteman Osterman & Hanna
LLP, Albany, New York.
Appeal from the United States District Court for the Northern District of New York
(Lawrence E. Kahn, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court entered on January 19, 2010, is
AFFIRMED.
Plaintiffs Richard P. Rubinstein and Katherine Kolbert appeal from an award of
summary judgment in favor of defendant Clark & Green, Inc. on their breach of contract
claim. We review an award of summary judgment de novo, viewing the facts in the light
most favorable to the non-moving party. See Havey v. Homebound Mortg., Inc., 547 F.3d
158, 163 (2d Cir. 2008). Summary judgment is appropriate where the record shows “that
there is no genuine issue as to any material fact and that the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(c); see also FDIC v. Great Am. Ins. Co., 607 F.3d
288, 292 (2d Cir. 2010). While we will not uphold an award of summary judgment in favor
of defendant if the evidence is sufficient to permit a reasonable jury to find for plaintiffs, they
must point to more than a “scintilla” of supporting evidence to defeat summary judgment.
Havey v. Homebound Mortg., Inc., 547 F.3d at 163; see also Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252 (1986). We assume the parties’ familiarity with the facts and the
record of prior proceedings, which we reference only as necessary to explain our decision
to affirm.
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Plaintiffs’ breach of contract claim is based solely upon defendant’s alleged failure
to complete design work on plaintiffs’ planned residence in Hillsdale, New York, in
accordance with a proposed work schedule. Plaintiffs contend that the district court erred
in concluding that the parties did not enter into a binding written contract embodied in emails
exchanged by the parties at the outset of the project. In the alternative, plaintiffs argue that
the district court erred in concluding that the parties did not enter into a binding preliminary
agreement. Whether a contract existed is a question of law that we review de novo. See
Shann v. Dunk, 84 F.3d 73, 77 (2d. Cir. 1996). It is undisputed that New York law governs
this action.
1. The Binding Contract Claim
While an exchange of emails may constitute a binding contract under New York law,
see, e.g., Stevens v. Publicis, S.A., 50 A.D.3d 253, 255-56, 854 N.Y.S.2d 690, 692 (1st Dep’t
2008), that is not the case “where the parties contemplate further negotiations and the
execution of a formal instrument,” Adjustrite Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d
543, 547 (2d Cir. 1998). Here, the emails at issue plainly establish the parties’ intent to
execute a formal contract beyond their email exchange.
In a November 22, 2005 email, Rubinstein asked Alan Clark, one of defendant’s
principals, for his “opinion as to a realistic schedule” for the contemplated project and for “a
copy of the . . . written agreement you would propose we use for engaging yourself and your
firm.” Email from Rubinstein to Clark (Nov. 22, 2005, 2:27 AM EST). Responding the
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same day, Clark laid out a proposed work schedule, which he characterized as “a little tight,”
observing, “[w]e can talk about all this in more detail.” Email from Clark to Rubinstein
(Nov. 22, 2005, 11:06 AM EST). More important for purposes of revealing the parties’
intent regarding formation of a binding contract, Clark stated that “[t]he agreement I would
like to use is an AIA Agreement B155,” referring to a form agreement prepared by the
American Institute of Architects. Id.
In a November 29, 2005 email, Rubinstein thanked Clark “for sending the possible
schedule and sample contract.” Email from Rubinstein to Clark (Nov. 29, 2005, 2:26 PM
EST). On December 6, 2005, Rubinstein emailed again, stating that he “would like to start
working with” Clark & Green, but that he had “no time to get into” contract terms at that
time “so I would like to target completing a more comprehensive understanding in writing
before we get to contract documents stage if ok with you.” Email from Rubinstein to Clark
(Dec. 6, 2005, 1:01 PM EST). Later that day, Clark responded that he would “fill in the
B155 Contract and send it down for your signatures.” Email from Clark to Rubinstein (Dec.
6, 2005, 3:41 PM EST). Rubinstein immediately replied, reiterating his desire to defer
entering into a formal written contract:
I don’t have the time or inclination or see the need to get into
doing a contract until we are further along. . . . Also by waiting
on paperwork we will have some mileage under our belts in
terms of a relationship and will have a sense of how specifically
we need to document this and that.
Email from Rubinstein to Clark (Dec. 6, 2005, 4:15 PM EST).
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This correspondence clearly establishes the parties’ intent to negotiate further and
enter into a formal written contract. Plaintiffs’ argument that the November–December 2005
email exchange by itself constitutes a binding written contract thus fails as a matter of law.
See Kowalchuk v. Stroup, 61 A.D.3d 118, 123, 873 N.Y.S.2d 43, 47 (1st Dep’t 2009)
(“[W]hen a party gives forthright, reasonable signals that it means to be bound only by a
written agreement, that intent is honored.” (internal quotation marks omitted)).
2. The Preliminary Agreement Claim
In the alternative, plaintiffs argue that the parties’ email exchange constitutes a fully
binding preliminary agreement. See Adjustrite Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d
at 548. New York law recognizes two types of preliminary agreement: under the first,
sometimes called a “binding preliminary commitment,” “the parties are bound only to make
a good faith effort to negotiate and agree upon the open terms and a final agreement,” with
no further obligation; the second, alleged by plaintiffs in the instant case, is a “fully binding
preliminary agreement,” which is “preliminary only in form,” and “binds both sides to their
ultimate contractual objective.” Id. (recognizing preliminary agreement as binding “when
the parties agree on all the points that require negotiation (including whether to be bound)
but agree to memorialize their agreement in a more formal document”). Four factors inform
our review of whether a fully binding preliminary agreement exists:
(1) whether there has been an express reservation of the right not
to be bound in the absence of a writing; (2) whether there has
been partial performance of the contract; (3) whether all of the
terms of the alleged contract have been agreed upon; and (4)
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whether the agreement at issue is the type of contract that is
usually committed to writing.
Id. at 549.
The first factor weighs in favor of defendant. While there was no express reservation
of the right not to be bound in the parties’ emails, this fact “is not dispositive.” Brown v.
Cara, 420 F.3d 148, 154 (2d Cir. 2005) (internal quotation marks). Here, both parties
expressed their intention to enter into a formal agreement after further negotiation. See id.
at 155 (observing that “absence of an expressed reservation is of little significance,
particularly in view of the . . . statement that a formal contract is forthcoming”).
Significantly, the email correspondence contains neither an express statement that there was
a binding agreement nor an express manifestation by either party of an intent to be bound by
the terms discussed. See Adjustrite Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d at 549
(finding no binding preliminary agreement where “[t]he Agreement does not expressly state
that it was a binding agreement nor does it provide any express manifestation that the parties
were bound by its terms”).
Plaintiffs argue that the second factor, partial performance, weighs in their favor
because defendant completed several months of design work for which plaintiffs paid at rates
discussed in the initial email exchange. While this course of conduct might support a
conclusion that the parties reached at least a preliminary agreement as to how defendant
would be paid for completed work, it does not establish the parties’ agreement to be bound
to the work schedule presented in Clark’s November 22, 2005 email.
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The third factor – the existence of open items for negotiation – weighs in favor of
defendant. Indeed, Rubinstein himself provides clear evidence of this fact by stating in his
December 6, 2005 email that “by waiting on paperwork we will have some mileage under
our belts in terms of a relationship and will have a sense of how specifically we need to
document this and that.” Email from Rubinstein to Clark (Dec. 6, 2005, 4:15 PM EST).
Moreover, the form contract proposed by defendant covered a number of significant topics
not discussed in the email correspondence, including the scope of defendant’s responsibilities
during the construction phase of the project, how defendant’s expenses and costs would be
reimbursed, and the consequences of early termination of the agreement by either party. In
the absence of an agreement on these and other terms, it cannot be said that “all of the terms
of the alleged contract [were] agreed upon” in the parties’ initial email exchange. Adjustrite
Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d at 549.
The fourth factor – whether the agreement at issue is the type of contract that is
usually committed to writing – also weighs in defendant’s favor. Indeed, plaintiffs do not,
and cannot, suggest otherwise in light of their email exchange about using a standard contract
form prepared by the American Institute of Architects and made available to its members for
setting forth the terms of a client-architect relationship. The cost, duration, and complexity
of the instant project – with a budget of up to $1.5 million and spanning several phases over
more than a year – also indicate that a formal document would have been appropriate.
In sum, three of the four Adjustrite factors strongly support a conclusion that the
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parties did not intend to be bound by the proposed work schedule in the absence of a formal
contract. The remaining factor – partial performance – is not sufficiently probative on the
issue of the schedule to raise a genuine issue of fact for trial. In light of the foregoing, “no
reasonable factfinder could conclude, on this record and in the face of the objective
documentary evidence, that the parties agreed on all material elements of the transaction,
intended to be fully bound . . . , and considered [the contemplated formal agreement] to be
[an] unnecessary formalit[y].” Adjustrite Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d at
551. Plaintiffs’ breach of contract claim therefore fails as a matter of law, and summary
judgment was properly entered in favor of defendant.
We have considered plaintiffs’ remaining arguments on appeal and conclude that they
are without merit. Accordingly, the January 19, 2010 judgment of the district court is
AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
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