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PETERS v. "SIGMA DATA" COMPUTING CORP.

July 17, 1975

BARRY PETERS and ROBERT C. PATENT, d/b/a partners under the name and style "Peters & Co.," Plaintiffs,
v.
SIGMA DATA COMPUTING CORP., Defendant



The opinion of the court was delivered by: PLATT

MEMORANDUM AND ORDER

 PLATT, D. J.

 Defendant, SIGMA DATA COMPUTING CORP., ("Sigma Data") moves, pursuant to Rule 56(b) of the Federal Rules of Civil Procedure, for summary judgment on the ground that there is no genuine issue of material fact and that defendant is entitled to judgment as a matter of law.

 In an affidavit filed in support of such motion defendant's attorney argues that the claim set forth in plaintiffs' amended complaint is barred by the statute of frauds; that all plaintiffs' efforts were done pursuant to a written contract between the parties and not in connection with any promise implied in law; and plaintiffs had actual notice that alleged oral promises to pay expenses were beyond the scope of the authority of defendant's president.

 This is the second motion by the defendant for summary judgment in this action; the first was addressed to plaintiffs original complaint which was based on a written agreement providing for a finders fee to plaintiffs, partners in Peters & Co., for obtaining specified financing for the defendant.

 In a Memorandum and Order dated December 18, 1973, this Court (Judd, D.J.) granted defendant's first motion on the ground that the proposal submitted by the plaintiffs did not constitute a reasonable performance of the written agreement between the parties and hence the plaintiffs were not entitled to recover thereunder. Judge Judd held further, however, that

 
"3. Alternate Basis of Recovery
 
While defendant has set forth a valid defense to the cause of action alleged in the complaint, the plaintiffs' affidavit suggests a different cause of action, in the nature of quantum meruit. If defendant encouraged plaintiffs to proceed with a financing plan which was not in conformity with the written agreement, and at one time accepted the plan, as asserted by plaintiffs, there may be an obligation from defendant to the plaintiffs, although not necessarily on the terms specified in the written agreement.
 
While the Federal Rules have gone far toward permitting 'notice pleading,' orderly conduct of litigation is aided by a reasonable conformity between the complaint and the issues to be tried. If plaintiffs believe they have a cause of action different from that now pleaded, they should set it forth with particularity.
 
It is ORDERED that defendant's motion for summary judgment be granted, with leave to plaintiffs to serve an amended complaint within thirty days after the date of this Memorandum and Order, the entry of judgment to be deferred pending service of such an amended complaint."

 Pursuant to the latter portion of Judge Judd's Memorandum and Order, the plaintiffs filed an Amended Complaint in which they cite, rely on and describe the written agreement dated September 29, 1972 between the parties and allege further that defendant encouraged the plaintiff PETERS to expend money and efforts to obtain financing for defendant; that PETERS expended substantial sums of moneys and efforts therefor; that PETERS succeeded in arranging with Tavco and other investors for financing for defendant; that defendant was well aware of the terms of such proposed financing, assented thereto and encouraged PETERS to pursue the same; that such proposed financing was not consummated solely due to the fault of defendant who refused to negotiate in good faith, refused to reconsider reasonable suggestions and proposals and, through other acts of omission and commission, destroyed the prospective financing with Tavco, and that the fair and reasonable value of the services rendered by the plaintiff PETERS for defendant and of money expended by him for defendant is $50,000.

 Defendant claims that the New York General Obligations Law, Section 5-701.10 (the Statute of Frauds) is an absolute bar to plaintiffs' claim and cites various New York cases including Minichiello v. Royal Business Funds Corp., 18 N.Y. 2d 521, 277 N.Y. Supp. 2d 268, 223 N.E.2d 793 (1966), in support of such position. The aforesaid section of the New York General Obligations Law provides in pertinent part as follows:

 
"TITLE 7. REQUIREMENTS OF WRITING, EXECUTION OR ACKNOWLEDGMENT FOR ...

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