EDWARD WEINFELD, District Judge.
Plaintiff, a concert promoter, sought to lease Shea Stadium, New York City, for the production of a country and western music concert on August 22, 1981. After extensive negotiations, the relationship between the City negotiators and plaintiff's representatives broke down a few days before August 22 and the concert was cancelled. Thereupon, plaintiff commenced this action seeking damages for the cancellation, asserting various claims against combinations of defendants, including Edward R. Koch, the Mayor of the City of New York ("Mayor"), the City of New York ("City"), the Department of Parks and Recreation of the City of New York ("Department"), and Ticketron, a division of Control Data Corporation ("Ticketron").
SUMMARY OF THE CLAIMS
Plaintiff's first cause of action against the City and the Department (collectively "municipal defendants") and the Mayor alleges that the plaintiff entered into an oral contract with the municipal defendants whereby plaintiff would pay the City and the Department $40,000 and the New York National League Baseball Club ("the Mets")
The second cause of action names only the Mayor as a defendant and alleges that the demands for the increased fees referred to in the first cause of action were made with his consent, and that he ratified and approved the acts constituting the alleged breach of the oral agreement.
The third cause of action alleges that the Mayor, the municipal defendants and Ticketron committed deceptive acts and trade practices in violation of the New York General Business Law, section 349.
The fourth claim charges that the Mayor and the municipal defendants, through their conduct and representations, sought to convey to the plaintiff the impression that a contract was in effect for plaintiff's use of Shea Stadium on August 22, 1981; that plaintiff relied on such conduct and representations to its detriment; and that thereby an "estoppel in favor of the plaintiff" was created.
Plaintiff's fifth claim alleges that the municipal defendants acted under color of state law in revoking the contract between plaintiff and the defendants, thereby depriving plaintiff of property without due process of law in violation of 42 U.S.C., section 1983.
Koch, the City and the Department move for summary judgment on each of the causes of action alleged against them. The motion is based upon affidavits of various participants in the negotiations, extensive pre-trial discovery of such persons and a statement by the movants pursuant to Local Rule 3(g). Initially it is noted that the plaintiff has failed to controvert the statements in the defendants' 3(g) notice as required by the Rule.
In considering a motion under Rule 56, this Court "cannot try issues of fact but can only determine whether there are issues of fact to be tried."
Plaintiff's allegations describe a series of negotiations for the use of Shea Stadium carried on by Genesco principals, Anthony Scotti and Gene Richards, and Wendell Levister, Deputy Commissioner of the Department of Parks and Recreation. Also present or participating in the negotiations were Rudolph Taylor, General Counsel of the Department of Parks and Recreation, and Diana Ortiz, Deputy General Counsel for the Department of Parks and Recreation. Plaintiff claims that "sometime prior to the 8th day of August, 1981,"
Breach of Contract Claim
The municipal defendants first argue that they are entitled to summary judgment on the breach of contract claim as a matter of law because the alleged oral contract is invalid and unenforceable, since it fails to conform to the statutory prerequisites required of contracts for the lease of Shea Stadium. The movants here emphasize that the alleged contract was not in writing; that it had never been agreed to by the authorized officer of the Department; and that it had never been approved as to form by the City Corporation Counsel. Second, defendants argue that the plaintiff has admitted that the parties did not intend to be bound until the execution of a written contract, pointing to portions of the deposition of Gene Richards, one of the partners of Genesco.
When acting in its corporate capacity, a municipality is held as accountable for its obligations as are individuals and
Hence, while a municipal corporation must honor its authorized commitments, it is not bound to contracts entered into by employees outside their authority.
None of the parties with whom plaintiff claims to have negotiated, Deputy Commissioner Levister,
While the Commissioner may delegate his authority, that delegation is only valid if a written instrument is filed with the Department.
Plaintiff does not dispute that the Commissioner never negotiated with the plaintiff nor signed a written contract. Plaintiff also does not dispute that Commissioner Davis never delegated, in writing, authority to Deputy Commissioner Levister to contract for the use of Shea Stadium.
Plaintiff claims, however, that it reasonably relied on the representations of Deputy Commissioner Levister, General Counsel Taylor, and Deputy General Counsel Ortiz that a duly executed contract was forthcoming. Construed broadly, this contention includes a claim that the negotiating parties, although without actual authority, possessed apparent authority to enter into a contract for the lease of Shea Stadium. However, the New York courts do not generally follow the doctrine of apparent authority in cases involving municipal defendants.
Plaintiff's allegations also suggest a claim that the Commissioner's signature was but a formality that had been assured by Deputy Commissioner Levister, General Counsel Taylor, and Deputy General Counsel Ortiz. It is true that recovery against a municipality may be had where the failure to comply with statutory restrictions involves a mere irregularity or technical violation.
The statutory requirement that the Commissioner of the Department must approve all contracts for the lease of Shea Stadium is not a mere technicality, but rather a fundamental statutory restriction. The power to approve or disapprove a municipal contract entails the power to dispose of public assets. Restrictions as to which city officials may invoke that power are not a mere formality, but are fundamental to "responsible municipal government."
For the foregoing reasons, the first cause of action is dismissed.
Claim Against Mayor Koch
Plaintiff's second cause of action alleges that the Mayor approved and ratified the alleged representations made by officers of the Department concerning the lease of Shea Stadium to the plaintiff. Defendants deny that Mayor Koch approved the alleged fee increase upon which plaintiff predicates its cause of action for breach of the oral agreement. Even assuming, as plaintiff alleges, that the Mayor did in fact ratify the representations, its second cause of action on its face does not state a claim against the Mayor on which relief can be granted. He cannot be held personally liable for the breach of a municipal contract which is invalid and unenforceable.
Entirely apart from the fact that the cause of action fails as a matter of law, defendant Koch is entitled to prevail on his motion for summary judgment. He and the other defendants deny that he approved the alleged fee increase which plaintiff alleges constituted the breach of the oral contract. To defeat a motion for summary judgment the opposing party must set forth "supporting arguments or facts in opposition to the motion."
The Deceptive Practices Claim
Plaintiff's third cause of action against the municipal defendants (and Ticketron) alleges a violation of New York General Business Law, section 349 which prohibits "deceptive acts or practices in the conduct of any business, trade, or commerce or in the furnishing of any service."
The defendants contend that the section is part of a consumer fraud protection statute that is inapplicable to a complex transaction between a corporate plaintiff, here a concert promoter, and a municipal defendant for the rental of a municipal stadium.
Section 349 wears its purpose on its face; it is entitled "Consumer Protection From Deceptive Acts and Practices."
Section 349 is a powerful remedy for consumer fraud. Its broad language was intended to provide a "strong deterrent against deceptive business practices"
No New York court has specifically addressed the question whether this consumer fraud statute applies to commercial transactions of the nature here at issue. The Court is, of course, mindful that it sits in diversity in deciding the summary judgment motion on this claim, and therefore must apply the law of New York.
Summary judgment is appropriate for two reasons. First, plaintiff has not been "injured by reason of any violation" of section 349 because the City's alleged misrepresentations do not constitute a "deceptive practice" within the meaning of the Act. Second, to extend this remedy to plaintiffs would alter completely the legal duties governing commercial relationships in New York. Absent a clear expression from the New York Legislature that it intended to effect so drastic a change in commercial law, this Court declines to interpret the statute to govern an alleged agreement to lease Shea Stadium.
Section 349(h) provides private parties with a cause of action for injuries "resulting from deceptive practices." The typical violation contemplated by the statute involves an individual consumer who falls victim to misrepresentations made by a seller of consumer goods usually by way of false and misleading advertising. The consumer oriented nature of the statute is evidenced by the remedies it provides. Section 349(h) provides parties with the opportunity
The nature of the instant transaction clearly places it outside the purview of section 349 when that statute is construed in the light of the Federal Trade Commission Act. The rental of Shea Stadium is not an ordinary or recurring consumer transaction. It is in effect a "single shot transaction" involving complex arrangements, knowledgeable and experienced parties and large sums of money. The nature of alleged deceptive government practices with respect to such a transaction are different in kind and degree from those that confront the average consumer who requires the protection of a statute against fraudulent practices. The only parties truly affected by the alleged misrepresentations in this case are the plaintiff and the defendants.
The Court is convinced that summary judgment is appropriate not only because plaintiff has not been "injured by reason of any violation" of section 349, but also because a contrary interpretation would radically alter commercial relations in the State of New York. As discussed above, section 349 provides a very broad remedy for consumer fraud. Because the purpose of the statute is "not to punish the wrongdoer but to protect the public," "proof of intention to deceive is not requisite to a finding of violation."
The Estoppel Claim
Plaintiff's fourth cause of action against the municipal defendants and the Mayor alleges that by their acts and conduct they represented or conveyed the impression that a contract existed for Shea Stadium and that the plaintiff, to its detriment, relied upon such representations and conduct and expended various sums of money and incurred other obligations; consequently, that such acts and conduct created an estoppel in favor of the plaintiff. The thrust of plaintiff's argument is that Deputy Commissioner Levister, General Counsel Taylor, and Deputy General Counsel Ortiz represented to plaintiff that the City "would furnish the plaintiff with a duly executed contract," which it never provided.
As the above disposition of plaintiff's breach of contract claim illustrates, none of the parties with whom plaintiff negotiated had the authority to provide assurances that a duly executed and approved written contract was forthcoming. Final approval, pursuant to the New York City Charter and the New York City Administrative Code, could only come from Commissioner Davis. If Deputy Commissioner Levister, General Counsel Taylor, or Deputy General Counsel Ortiz did in fact assure plaintiff that the Commissioner would approve and duly execute the contract, such representations were outside the scope of their authority and therefore cannot estop the City from denying the
Plaintiff also names the Mayor as a defendant in this cause of action. For the reasons given above with respect to plaintiff's breach of contract claim, summary judgment is granted. Plaintiff has failed to produce any facts supporting its allegations in this claim that the Mayor represented or authorized City officers to represent to plaintiff that a duly executed contract would be forthcoming. Conclusory allegations do not provide an adequate defense to a summary judgment motion.
42 U.S.C. section 1983 claim
Plaintiff's final cause of action against the municipal defendants is based on 42 U.S.C., section 1983. Plaintiff seeks compensatory and punitive
To recover under section 1983, plaintiff must establish a deprivation of a constitutionally protected right.
Plaintiff's alleged entitlement to the delivery of a duly executed contract does not rise to the level of a constitutionally protected property right. The Court's disposition of plaintiff's breach of contract and estoppel claims amply demonstrates that state law did not create a legitimate entitlement even if an oral contract was in fact made. New York law places the burden on plaintiff to ascertain the authority of those municipal officials with whom it deals. Having failed to satisfy that burden, plaintiff cannot claim a legitimate entitlement under state law to a "duly executed contract."
Claim against Ticketron for Negligence in Handling Ticket Sales
Plaintiff's final claim charges Ticketron with the negligent handling of ticket sales to the plaintiff's proposed country and western concert. Plaintiff entered into a written contract with Ticketron for the sale of tickets prior to the time the City cancelled the plaintiff's proposed concert. Plaintiff alleges that Ticketron was negligent in failing to place tickets on sale at the agreed upon time; giving prospective purchasers incorrect information about the date of the concert, the price and availability of tickets; and failing to properly monitor ticket sales or coordinate efforts to sell tickets. As a result, plaintiff alleges the municipal defendants received inaccurate information about the level of ticket sales and consequently cancelled the concert. Plaintiff claims consequential damage due to Ticketron's alleged negligence. Ticketron argues that summary judgment is appropriate because several provisions of the contract plaintiff signed disclaim liability for the very type of negligence plaintiff alleges, or for any incidental or consequential damages. Additionally, Ticketron contends that it is entitled to prevail on this motion because plaintiff admits it never received a use permit from the City, which constitutes a breach of contract, relieving Ticketron of any obligation under their contract.
Plaintiff seeks to avoid the limitation of liability clauses and the clause requiring plaintiff to comply with the City's use permit laws by a claim, based upon an affidavit of Gene Richards, a Genesco principal, that the Ticketron contract did not include the printed matter that forms the basis of Ticketron's affirmative defense. Richards swears that he signed only the first page of a three-page document that Ticketron contends is the contract entered into, and that the second and third pages which contain the limitation of liability clauses were neither attached to nor referred to in the one page which plaintiff signed and which it contends is the contract.
Plaintiff's claim is rendered suspect by the fact that the one page Richards admits he signed refers several times to sections that are contained only in the second and third pages of the contract relied upon by Ticketron, so that it seems unlikely that the contract consists of the cover page. Nevertheless, the Richards affidavit raises a material issue of fact concerning the content of the contract between Genesco and Ticketron. While the Court perforce is required to deny the motion for summary judgment, it is not inappropriate to remind counsel of Rule 11 of the Federal Rules of Civil Procedure.
The Ticketron motion for summary judgment is denied.