This was originally published on the SGR Blog.
Was Bride-to-Be Entitled to No, Partial or Full Refund of Deposit?
Jennifer Tyrie Hinge sought $5,000 in damages against Michael Dezotell d/b/a Orchard Grove Farms for failure to deliver wedding services as contracted. The matter proceeded to trial in the City Court of Little Falls, Herkimer County on April 7, 2022.
There was no substantial factual difference in the testimony. Both parties agreed that Hinge contracted with Dezotell on or about September 11, 2019, to provide a wedding venue and made two payments totaling $5,411.42. Then the COVID-19 pandemic put an end to public gatherings pursuant to public health orders by the Governor which were a matter of public record and common knowledge.
Early in the pandemic Dezotell attempted to transfer his business to Valerie Longo d/b/a Blush Enterprises by transferring the phone lines and Longo holding herself out to the world as the successor in interest to Orchard Grove Farms. Longo had previously been employed by Orchard Grove Farms.
At some point Hinge signed up for a wedding date of August 21, 2021 with Longo. As the COVID-19 restrictions began to be lifted in 2021, the venue (either Orchard Grove Farms or Blush Enterprises) began scheduling weddings. By September 28, 2020, it became clear from Longo’s email to Hinge that the business transfer from Orchard Grove Farms to Blush Enterprises was a failed endeavor.
Although Longo continued to provide wedding services as an employee of Orchard Grove Farms, Hinge’s wedding was not scheduled. In that same email chain, Patricia Tyrie sent an email to Hinge which stated, among other things, “PS-Jen, you made a good decision to not host your wedding there this year. Patty” which seemed to indicate that Hinge had already made the decision not to have her wedding at Dezotel’s location even before she knew the full extent of the failed business transfer.
The Court was required to adjudicate the claim in such manner as to do substantial justice between the parties according to the rules of substantive law.
The general rule in New York, as it relates to the assignability of contracts, is that any property right, not necessarily personal, is assignable. That rule may be overcome only by agreement of the contracting parties or a principle of law or public policy.
The contract here appeared to the Court to be a mixed general and personal services contract. To the extent that the contract was for the use of the land, it was generally assignable. However, the contract also detailed the provision of food and catering as well as generally prohibiting outside food and drinks. Those services made it a partially personal or mixed use contract.
Irrespective of their obligations under common law, the parties expressly agreed that the contract could be assigned. For example, the PREFACE by its terms contemplated that it was enforceable by “successors and/or assigns.” The PREFACE goes on to state “At times, it may be essential and necessary for Orchard Grove Farms to arrange for the services of independent contractors to manage, provide services and/or operate Orchard Grove Farms and assist Orchard Grove Farms in its goal of functioning as an event venue for Weddings/Receptions and other events.” So the Court found that the attempted—albeit failed—transfer of the business from Orchard Grove Farms to Blush Enterprises was a proper assignment on the part of Orchard Grove Farms.
The remaining question was whether the circumstances surrounding Dezotell’s failed business transfer was a material breach of the contract thereby giving Hinge the right to demand a refund. The contract addressed client refunds in two places. One paragraph stated: “Event Cancelation. If your event is cancelled due to no fault of Orchard Grove Farms, the entire deposit will be retained by Orchard Grove Farms” (emphasis added).
Another stated: “CANCELLATIONS: In the event of a cancellation, all monies paid to Orchard Grove Farms are non-refundable.”
On the one hand, it appeared to the Court that Hinge decided, prior to the September 28, 2020 email from Longo, not to go forward with having her wedding at Orchard Grove Farms. On the other hand, that decision seemed to be based in some part with the problems that Dezotell encountered with Longo during the business transfer–which was certainly solidified by the language in Longo’s email correspondence.
Generally, a master (principal or employer) is responsible for the tort of his servant (agent or employee) when the servant commits the tort within the scope of employment. That meant that Dezotell was liable for the actions of Longo as both an employee as well as her conduct with respect to the contract that was assigned to Longo and then re-assigned back to Dezotell after the failed business transfer.
The Court was required to decide and apportion relative fault in a way that would do substantial justice under these facts. The Court was uncomfortable with allowing Hinge to get the full refund back because it appeared that she may have already decided not use the Dezotelll’s wedding venue before the unpleasant details of the failed business transfer were completely revealed to her. The Court was equally uncomfortable with allowing Dezotell to keep the full deposit because it appeared that his own agent Longo caused Hinge in some way to be uncomfortable with his services through lack of communication and painting the wedding venue in a bad light.
The Court found that substantial justice according to the rules of substantive law, would be accomplished by assigning fault to both parties. Accordingly, the Court awarded judgment for Hinge in the amount of $2,500.