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Village of Coxsackie v. Veolia Water North America-North East

September 5, 2007

VILLAGE OF COXSACKIE, PLAINTIFF,
v.
VEOLIA WATER NORTH AMERICA-NORTH EAST, LLC, AND US FILTER OPERATING SERVICES, INC., D/B/A VEOLIA WATER NORTH AMERICA OPERATING SERVICES, INC., D/B/A VEQLIA WATER NORTH AMERICAN OPERATING SERVICES, LLC, D/B/A US FILTER RECOVERY SERVICES (MID-ATLANTIC), INC. DEFENDANTS.



The opinion of the court was delivered by: Hon. Norman A. Mordue, Chief U.S. District Judge

MEMORANDUM-DECISION AND ORDER

BACKGROUND

Plaintiff Village of Coxsackie ("Village") moves (Dkt. No. 6) for partial summary judgment in this diversity action stemming from the "Agreement for Operations, Maintenance and Management Services" ("Contract") dated June 9, 2003, pursuant to which defendants agreed to operate, manage and maintain the Village's water and wastewater treatment facilities. Section 2.1 of the Contract required defendants to staff the facilities with the Village's existing employees pursuant to the "Employee Management Agreement" ("EMA"). The EMA provided that these Village employees would be "leased" to defendants, that the Village would pay wages and benefits directly to the leased employees, that the Village would present defendants a monthly itemized list of the wage and benefits costs for each leased employee, and that defendants would reimburse the Village for these costs within 30 days of receipt of the itemized list.

On November 4, 2005, the Village notified defendants that they were in material breach of the Contract by virtue of their failure properly to operate and manage the facilities. The notice expressly invoked the 30-day cure provision of the Contract and stated that, in the event of defendants' failure to cure the breach, the Village would terminate the Contract. By letter dated December 12, 2005, the Village stated that defendants had failed to cure and that the Contract was terminated for cause, effective January 1, 2006.

In its complaint, the Village claims that defendants failed to reimburse it for leased employees' wages and benefits for the period of June through December 2005, for a total sum of $137,105.45. The first and second causes of action seek to recover this amount on theories of breach of contract and account stated. The third cause of action is to recover $12,610 allegedly paid by the Village to an outside engineering firm as a result of defendants' failure properly to operate and manage the facilities.

In their answer, defendants assert affirmative defenses as follows: first, payment; second, failure to mitigate; third, failure to state a cause of action; fourth, superseding cause; fifth, statute of frauds; sixth, accord and satisfaction; and seventh, breach of contract by the Village excusing defendants from performance.

Defendants interpose two counterclaims. The first avers that defendants did not breach the Contract, that the Village's termination thereof was not a termination for cause, and that therefore under the terms of the Contract the Village was required to pay defendants a termination fee of $33,833.54.

The second counterclaim asserts that the Village failed to reimburse defendants for certain expenses, overages, and costs as required by the contract. Defendants seek reimbursement for the following costs, totaling $94,185.42: poly aluminum chloride for October and November 2005, $6,595.33; electricity, $14,902.61; repair and maintenance overage, $28,372.74; SCADA system, $21,595.20; and labor, $22,719.54.

On the present motion, the Village seeks summary judgment on its first two causes of action in the amount of $137,105.45 based on defendants' alleged failure to reimburse the employment costs for the leased employees. The Village also seeks dismissal of the first, second, fourth, sixth and seventh affirmative defenses and both counterclaims on the ground of defendants' failure to serve a timely notice of claim in compliance with N.Y.C.P.L.R. 9802. The Village does not seek summary judgment on its third cause of action. As set forth below, the Court grants the motion in part and denies it in part.

DISCUSSION

Summary Judgment Standard

Summary judgment is appropriate "where there exists no genuine issue of material fact and, based on the undisputed facts, the moving party is entitled to judgment as a matter of law."

Beth Israel Med. Ctr. v. Horizon Blue Cross and Blue Shield of N.J., Inc., 448 F.3d 573, 579 (2d Cir. 2006) (internal quotation marks omitted). A dispute about a genuine issue of material fact exists if the evidence is such that "a reasonable [factfinder] could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether there is a genuine issue of material fact, a court must resolve all ...


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