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F. H. KREAR & CO. v. NINETEEN

August 11, 1982

F. H. KREAR & COMPANY, Plaintiff,
v.
NINETEEN NAMED TRUSTEES, Defendants and Third-and Fourth-Party Plaintiffs, v. ANTHONY GRAUSO, et al., Third-Party Defendants, and ROBERT MOZER, Third-and Fourth-Party Defendant



The opinion of the court was delivered by: DUFFY

MEMORANDUM & ORDER

 KEVIN THOMAS DUFFY, D.J.:

 On July 1, 1979, plaintiff F. H. Krear & Company ("Krear") allegedly entered into a contract with the Pension Fund, Vacation Fund and Health Benefits Fund ("the Funds") of Local 69 of the Hotel and Restaurant Employees and Bartenders Union to replace with a computerized system the Funds' manually operated procedures for the collection of contributions and the payments of benefits. Apparently, the Funds stopped making payments under the contract in October, 1979 which led to the instant lawsuit against 19 named trustees of the Funds. *fn1" The defendant trustee subsequently filed a third-party complaint against computer consultant Anthony Grauso and his partnership Software & Systems Development Company ("Grauso"). Grauso had been hired by the Funds, an entity separate from Local 69, "to provide the Funds with expert assistance and counsel in upgrading, improving and automating the procedures and administrative operations of the respective Funds." Defendants' Answer, para. 17. In their third-party complaint the Funds assert in essence that Grauso was responsible for the failure of the Krear contract. Grauso interposed three counterclaims in response to the third-party complaint.

 The first counterclaim alleges that the Funds breached their five year consulting contract with Grauso. Grauso charges in his second counterclaim that trustee defendant John F. Leaver, in his individual capacity and as an official of Local 69, breached Local 69's five year consulting contract. This contract is alleged to be distinct and unrelated to the Funds' contractual obligation to Grauso. The third counterclaim, also brought against defendant Leaver individually and in his capacity as a Local 69 official, alleges that Leaver conspired to induce the Funds to breach their contract with Grauso. Leaver moves for summary judgment against Grauso on the second and third counterclaims. Leaver argues that Grauso's second counterclaim is meritless because the five year contract allegedly breached does not comport with the Statute of Frauds. With regard to Grauso's third counterclaim, Leaver contends that he cannot be found liable for conspiracy to induce breach of a contract to which he himself is a party.

 Leaver moved for summary judgment in November, 1980. The motion was abated pending Grauso's deposition of Leaver. The deposition has now been completed and the motion is now ripe for determination.

 A. Grauso's Second Counterclaim

 In his second counterclaim, Grauso alleges:

 
On or about August 1, 1979, Grauso entered into a five year written agreement with Leaver on behalf of Local 69 (the "Local 69 Agreement") pursuant to which Grauso was to provide data processing consulting services to Local 69 in exchange for which Grauso was to be paid two hundred and fifty ($250.00) dollars per month, or a total of fifteen thousand ($15,000.00) dollars for the said five year period.

 Answer to Third-Party Complaint with Counterclaims, para. 29. In attempts to uncover the "written agreement" referred to in the counterclaim, Leaver's motion to stay discovery on this issue was denied. See 91 F.R.D. 497 (S.D.N.Y. 1981). Further discovery has not revealed any formal or draft agreement between Leaver and Grauso. Instead, Grauso now argues that three bank stubs evidencing separate payments to him by Local 69, letters Grauso sent to Leaver and his contract with the Funds can all be pieced together to provide a document fulfilling the requirements of the Statute of Frauds. Alternatively, Grauso argues that the Statute of Frauds does not apply to this service contract.

 Both parties concede that the Funds entered into a five-year written contract with Grauso for his consulting services. Grauso's Exhibit A. Grauso argues that a contract with similar terms and conditions was also entered into with Local 69.

 The Statute of Frauds specifically provides in pertinent part:

 
a. Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking:
 
1. By its terms is not to be performed within one year . . . .

 N.Y.Gen.Oblig.Law § 5-701 (McKinney 1981). Grauso correctly argues that a formal written contract is not required to satisfy the statute; however, any writings relied upon to establish a contract must contain the essential terms of the contract. See Crabtree v. ...


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