OPINION Upon consent of both parties, a trial was held before an arbitrator of the Civil Court on June 6, 2019. (22 NYCRR §208.41[n][2]). The Claimant, JC National Air Conditioning, Inc (“JC National”), sought damages in the amount of $3,000.00 for breach of contract. James Kounis is the president of JC National and testified on behalf of the company. The Defendant, Bragard USA (“Bragard”), was represented by the owner, Benjamin Leiberman-Bragard. Based upon the evidence adduced, JC National is awarded $1,781.33, in full satisfaction of its claim.JC National testified that they executed a written contract with a corporation known as 115th Ave. on March 4, 2008. The terms of the contract required JC National to service an air conditioning unit at 30-00 47th Ave., LIC, in exchange for a fee of $751.24. The fee was required to be prepaid in full at the beginning of each year. The contract would automatically renew yearly unless cancelled by either party upon 30 days written notice.JC National testified that the contract remained in continuous effect since 2008. JC National first contracted with 115th Ave. and then continued the contract with Bragard when they purchased the company from 115th Ave. sometime in early 2012. JC National introduced into evidence over two dozen service orders, dated from February 2012 through December 2018. There were four service orders per year each dated on the date of service and signed by Mr. Leiberman-Bragard, acknowledging completion of the service. Seven individual annual invoices in the amount of $751.24 each were introduced into evidence for the years of 2012 through 2018. Bragard paid the invoices for 2012, 2013, 2014, 2015, and 2016. Bragard did not make a payment in 2017 or 2018. JC National was not alarmed when the 2017 invoice was not immediately paid, as this was not the first time that Bragard’s payment was late. However, in March 2018 when JC National went to Bragard to perform the first air conditioning unit service of the year and deliver the 2018 invoice, they found that Bragard had shut down the business and cleared out the property. Bragard has never provided written cancelation notice in accordance with the terms of the contract.Bragard testified that they purchased the business in 2012 and began using JC National to service the air conditioning unit in the business shortly thereafter. Bragard acknowledged that JC National is entitled to the 2017 service fee. However, Bragad counters that they were not bound by the cancellation terms of the contract because he had never seen the JC National contract prior to purchasing the business and was not aware that a written contract existed. Bragard asserts that when they closed their business at the end of December 2017, they were neither required to provide written cancellation notice to JC National nor pay a fee for the year of 2018 because they did not have a contract with JC National. On cross-examination, Bragard admitted that they had conducted due diligence before purchasing the business from 115th Ave. and reviewed the contractual agreements of 115th Ave. prior to their purchase. Bragard also testified that JC National “just showed up” one day in March 2012 to service the air conditioning unit, and they allowed JC National to perform service on the air conditioning unit. Upon completion of the service, Bragard paid JC National $751.24 for the year of 2012. Thereafter, Bragard continued to grant JC National access on a quarterly basis until the end of 2018, and they paid JC National on an annual basis through the end of 2016. Bragard stated that although JC National was allowed to perform service on the air conditioning unit, it was not due to the existence of a service contract. Bragard USA offered no other reason for granting JC National access every quarter for six years and annually paying JC National the same amount as specified in the terms of the contract.To prevail in a claim for breach of a service contract, the claimant must establish that there is an agreement to perform a service, performance of the service, and a failure to pay for the service. (Gal v. Powell, 47 Misc3d 141[A] [2d Dep't, App Term 2015]; Maser Consulting, PA, v. Viola Park Realty, LLC, 91 AD3d 836 [2d Dep't.2012]). A successor business owner cannot be bound by the terms of a contract executed by a predecessor business owner unless the successor expressly assumes responsibilities under the terms of the contract. (Todd v. Krolick, 96 AD2d 695 [3d Dept], aff’d 62 NY2d 836 [1984]; Amalgamated Transit Union Local 1181, AFL-CIO v. City of New York, 45 AD3d 788 [2d Dep't 2007]). Once a contractual agreement is established, the court shall enforce the contract by the clear and unambiguous terms as described therein. (A Servidone, Inc/B Anthony Construction Corp, JV, v. State of New York, 168 AD3d 648 [2d Dep't 2019]).The evidence belies Bragard’s denial of knowledge about the existence of a written contract between their predecessor and JC National. Bragard reviewed the existing contracts of 115th Ave. while conducting due diligence. When JC National arrived in March 2012 to service the air conditioning unit, without being summoned by Bragard, they were granted access to the air conditioning unit and paid for the entire year of 2012. This is in conformity with the express written terms of the contract. JC National serviced the air conditioning unit at least twenty-seven times over an eight-year period. Bragard signed and acknowledged service of the air conditioning unit all twenty-seven times and paid JC National $751.24 every year commencing from 2012 and ending in 2016. Moreover, Bragard’s concession to owing the annual service fee for 2017 shows that they were not only aware of the contract but also intended to assume the responsibilities of their predecessor. The totality of evidence shows that Bragard assumed the contractual responsibility to pay JC National for service of the air conditioning unit under the terms of the contract executed by its predecessor, 115th Ave., and Bragard is bound by its terms. (Todd, supra; Amalgamated Transit, supra).The relevant terms of the contract assumed by Bragard are as follows: (1) JC National is required to service an air conditioning unit at 30-00 47th Ave. four times per year, (2) JC National is to be paid $751.24 at the commencement of the year of service in which the service is due, and (3) either party may cancel the contract upon thirty days written notice to the other party. These terms are clear and unambiguous. (A. Servidone. Inc. supra). JC National has established a breach of contract by Bragard by failing to pay for service for the years of 2017 and 2018, as well as failing to provide written notice of their intention to cancel the agreement to service the air conditioning unit. (Gal supra; Maser Consulting) supra). Accordingly, JC National is awarded the amount of $1502.48 for the two years of service claimed, and the amount of $278.85 for penalties and late fees, for a total sum of $1,781.33 in damages.The foregoing constitutes the opinion of the arbitratorDated: June 10, 2019Jamaica, New York
