This matter was tried by the Court, without a jury, on May 26, June 4, 2010. Post trial submissions were completed on July 15, 2010. The complaint seeks $116,000 in money damages, based on three causes of action respectively for: breach of contract (first cause of action); quantum meruit (second cause of action) and unjust enrichment (third cause of action). The answer denies the material allegations of the complaint and asserts six separate affirmative defenses respectively for: failure to state a cause of action (first affirmative defense); waiver (second affirmative defense); statute of frauds (third affirmative defense); estoppel (fourth affirmative defense); laches (fifth affirmative defense) and non-occurrence of a condition precedent (sixth affirmative defense).

The following witnesses testified at trial: Mr. John Rubino; Dr. Mark Schwartz, Franklyn Lieberman and Jane Scaccetti. The parties also entered into a stipulation dated June 21, 2010, which is part of the trial record.

The court makes the following findings of fact and conclusions of law based upon the credible evidence adduced at trial:

[*2]Findings of Fact

Plaintiff, John Anthony Rubino & Company, CPA, PC., is a professional corporation that provides accounting services and is wholly owned by John A. Rubino. Mr. Rubino is a certified public accountant. Defendant, Mark H. Schwartz, is a physician and medical educator. In 2003, Dr. Schwartz embarked on a business venture, which was to be known as the Clinical Competency Center of New York ("C3NY" or "the project"). The project, as originally conceived by Dr. Schwartz, would be a large, fully staffed, facility in which students, attending New York area medical schools, would be trained in necessary clinical skills. Dr. Schwartz envisioned that the training facility would have high tech equipment, including medical simulation equipment, multiple examination rooms and a large auditorium He set out to obtain $6,500,000 in financing to undertake the project.

As part of the start up process, Dr. Schwartz hired different professionals with different responsibilities. He hired Franklyn Lieberman, a marketing consultant and former patient. He hired an accountant (Jane Scaccetti and her firm) and lawyers. He hired Dr. Levine, an expert in mechanical simulation. Others were hired as well. With each person or firm hired to assist on the project, Dr. Schwartz worked out a different financial arrangement regarding their compensation. Some, like the accountants and lawyers, were paid for their time on an ongoing basis. Some, like Mr. Lieberman, were paid on an ongoing basis and promised an interest in the business. Some, like Dr. Levine, were promised an interest in the business.

In December 2003, Mr. Lieberman asked Mr. Rubino to look at some existing financial projections for C3NY, that had been developed by another consultant, and to make them more presentable. Lieberman and Rubino were personal and professional acquaintances. Mr. Rubino was supposed to review the existing projections and include any necessary annotations and notes. The work Mr. Lieberman requested was done and Mr. Rubino was paid $500 for it.

After December 2003, additional work was needed to further prepare financial projections to present to potential investors and others interested in the project. In early 2004, Dr. Schwartz and Mr. Rubino spoke by telephone about Mr. Rubino continuing to provide financial projections. Both parties agree that this was the one and only conversation in which they spoke directly with one another about the terms and conditions of their future business relationship. The conversation on this subject was relatively brief. They did not discuss whether Mr. Rubino would be billing for his personal work directly or thorough his professional corporation, the named plaintiff in this action. No one other than Mr. Rubino and Dr. Schwartz was a party to that conversation. In this regard, the collateral witnesses called by each party to testify at trial did not offer any reliable evidence concerning what, if anything, the parties had agreed to. The arrangement between them has been loosely referred to as "on spec."According to Mr. Rubino, during their conversation he told Dr. Schwartz his hourly rate to assemble the financial projections was $250 and that Rubino "would not bill [Schwartz] until the job was competed or [Schwartz] walked away from it."In recounting the same conversation, Dr. Schwartz stated that: " Mr. Lieberman had indicated to me that he had spoken to Mr. Rubino and cleared with Mr. Rubino that he would be working on a contingency basis for this project." Consequently, Dr. Schwartz "initiated the information or the question to Mr. Rubino, and [he] said I understand from Mr. Lieberman ... that you have offered to work on a contingency basis [*3]and [Mr. Rubino] said yes." Dr. Schwartz denies that he knew what Mr. Rubino's hourly billing rate was until Mr. Rubino sent a memorandum in October 2005.

Mr. Rubino testified at trial that, as he understood the parties' arrangement, he would be paid once there was financing for the project, or failing that, when the project was abandoned. He claims that he never agreed to completely forfeit compensation if the project failed to get financing. Dr. Schwartz testified that he understood from the 2004 conversation that Mr. Rubino agreed to do the necessary work, but that he would only be compensated if the project was actually funded.

No written confirmation, or engagement letter, or retainer agreement or writing of any kind memorializing the parties' agreement was ever prepared and/or signed by either Mr. Rubino or Dr. Schwartz. No invoices for services were ever sent by plaintiff or by Mr. Rubino to Dr. Schwartz, either while the work was ongoing or at any time before an attorney letter demanding payment was sent.

Following their February 2004 conversation, Mr. Rubino continued to work on the projections, which went through many iterations. Rubino and Schwartz spoke regularly and work was edited and reedited by both. Rubino was in contact with other persons hired to work on the project. Although there was much testimony about who provided information and who wrote which note in the different versions of the projections, suffice it to say the process was collaborative. Moreover, as more fully set forth below, the issue of who authored the notes has no bearing on the outcome of this case.

The projections contained certain references to Rubino's work and compensation. So, for example, certain versions of the projections circulating in November and December 2004 contained a $105,000 line item start up expense for consultants and the following associated note, stating, in relevant part: "the remaining $60,000 has been allocated in part to cover the accounting costs to Mr. John Rubino who prepared the financial analysis, and other professional services that will be incurred but not paid through funding." The source of the funds listed to pay the referenced start up expenses was the projected financing. (See: Defd. Exs. A, B.).

By October 2004, Mr. Rubino was already expressing concern that the $60,000 budgeted for his fees was insufficient. In an October 31, 2004 memo to Dr Schwartz, Rubino writes, DO YOU WANT PLAN H1 IN THIS FORMAT —— IT WILL TAKE 16 TO 20 HOURS TO DO......I HAVE ABOUT 330 HOURS BOOKED FOR PROJECTIONS SO FAR AND AT $250 PER HOUR — THAT'S A LOT OF MONEY." In a November 15, 2004 communication by Mr. Lieberman to Dr. Schwartz the issue of Rubino's compensation is also brought to defendant's attention. Mr. Lieberman states: " We have another problem with regards to John Rubino. His fee's for reimbursement (sic). Even though we put in $60,000 repayment the clock is still running and now its over $80,000. Since he is still working daily." Dr. Schwartz did not substantively respond to these ongoing issues raised with respect to Mr. Rubino's compensation. He did, however, continue to have communications with Mr. Rubino about making changes to the work product.

The anticipated sources of financing for the project did not materialize. By September 2004, Mr. Rubino himself was assisting to raise funds for the project. The relationship between Dr. Schwartz and Mr. Lieberman, Rubino's original connection to the project, deteriorated. Dr. Schwartz believed that he had been misled by Mr. Lieberman's advice and that potential joint [*4]venturers, like the City University of New York, soured on the project because of Mr. Lieberman's involvement. By March, 2005, Dr. Schwartz had failed to obtain any financing and the project, as originally envisioned, was abandoned. C3NY continued to exist, but instead of a teaching facility with clinical rooms, medical and other staff and an auditorium, Dr. Schwartz rents out rooms at the United Federation of Teachers building and, along with one other person, they "go around teaching improving medical clinical schools to medical students and international doctors of a regular basis."

After March 2005 Dr. Schwartz testified that he and Mr. Rubino Dr. Schwartz had no further contact. This is corroborated by Mr. Rubino's own time records . Before April 1, 2005 there are frequent time entries attributable to "Schwartz" while after that date t( with de minimus exceptions) the entries are almost exclusively charged as C3NY. On October 25, 2006, plaintiff had its attorney send a demand letter for $115,000 in unpaid compensation. Following correspondence between counsel, plaintiff prepared the one and only invoice sent to defendant. This action then ensued.

Conclusions of Law

Breach of Contract

Plaintiffs first cause of action is for breach of contract. The elements of a cause of action for breach of contract are: (1) formation of a contract between the parties; (2) performance by plaintiff; (3) defendant's failure to perform; and (4) resulting damage. Furia v. Furia, 166 AD2d 694 (2nd Dept. 1990). A contract is formed when there are at least two parties with legal capacity to enter into an contract give their mutual assent to the terms of a contract and there is consideration. 2 PJI 3d 4:1 at 626(2010); see: Maas v. Cornell University, 94 NY2d 87, 93 (1999). Mutual assent is often referred to as "a meeting of the minds" on the essential terms of the contract. Express Industries and Terminal Corp. v. New York State Department of Transportation, 93 NY2d 584 (1999).Where, however, the contract language used to express a material term is ambiguous, so that one party means one thing and another party understands it another way, there is no meeting of the minds and consequently no contract. Computer Associates Inter., Inc. v. US Balloon Mfg. Co., Inc., 10 AD3d 699 (2nd Dept. 2004). Even if parties intend to be bound by a contract, it is unenforceable if there is no meeting of the minds, i.e. if the parties understand the contract's material terms differently. Gessin Elec. Contractors, Inc. v. 95 Wall Associates, LLC, 74 AD3d 516 (1st Dept. 2010).

The parties each claim that they entered into a contract during that February 2004 telephone conversation. They disagree about what terms were agreed to. In arguing what contract terms the court should accept and enforce, each one claims that the other's version of the contract is incredible. The court finds, however, that the parties never reached a meeting of the minds during that brief telephone conversation in February 2004. The court concludes that there is no enforceable contract concerning compensation for the services provided by Mr. Rubino to Dr. Schwartz in connection with C3NY.

Dr. Schwartz argues that he never had a contract with the named plaintiff in this case, [*5]John Anthony Rubino & Company, CPA. PC. He claims that all his dealings were with John Rubino personally. Plaintiff does not factually dispute defendant's claim. He does not even address it from a legal standpoint. Mr. Rubino testified that the he is the sole owner of plaintiff and that it is the professional corporation within which he does business. These facts prove that plaintiff, a professional corporation, had no contract with defendant.

Furthermore the court concludes that while the parties contemplated that Mr. Rubino would provide services for Dr. Schwartz' business project and that the timing of the payment for those services would be after Dr. Schwartz obtained financing, they never agreed about whether the services would be contingent upon obtaining such financing or paid regardless of financing. Each party's professed understanding of the "on spec" arrangement was credible and yet, totally irreconcilable. Consequently, there never was a meeting of the minds on a material term of the contract, the conditions that had or did not have to be met before plaintiff and/or Mr. Rubino could be paid.

Mr. Rubino understood the "on spec" aspect of their arrangement to apply to the timing of his payment. He acknowledges that he was willing to wait for payment while Dr. Schwartz obtained financing. He credibly claims he did not agree to forfeit payment in the event no financing was ever obtained. Mr. Rubino's understanding is particularly reasonable in light of the fact that Mr. Rubino was never going to acquire any business interest in C3NY. To the extent other consultants hired by Dr. Schwartz had payment arrangements contingent on the success of the project, they all had been promised an interest in C3NY. Other consultants that were merely providing services, such as lawyers and accountants, were paid for their services regardless fo the success of the project. Thus, Mr. Rubino's expectation of payment, regardless of whether the project succeeded, was reasonable.

References in the projections and notes to Mr. Rubino's compensation do not make Mr. Rubino's testimony about his understanding incredible. The references do not set out the terms of any agreement between Dr. Schwartz and/or plaintiff or Mr. Rubino. The references are notification to any investor or potential investor how Dr. Schwartz intended to use any start up investment monies he received. Dr. Schwartz decision to structure his project so that certain start up financing would be used to reimburse him or pay for obligations he incurred is not inconsistent with Mr. Rubino's understanding of what he believed the parties agreed to.

The Court likewise finds that Dr. Schwartz was credible in asserting his contrary understanding of the parties' agreement.Dr. Schwartz' understanding of the parties' financial arrangement, however, made less sense from a business/risk point of view. He expected that with no right to share in potential profits, Mr. Rubino would provide his personal services with all the risk of loss associated with Dr. Schwartz' inability to get investors. Nonetheless, Dr. Schwartz credibly testified that he believed, based upon Mr. Rubino's personal relationship with Mr. Lieberman, that Mr. Rubino was giving him favorable treatment. While the Court finds that Dr. Schwartz was credible, as more fully set forth below, the court does not find Dr. Schwartz set of assumptions about payment, reasonable.

For the reasons set forth above the court finds that no contract was formed between the parties and, consequently, plaintiff's claim for breach of contract fails.

Quantum Meruit [*6]

Plaintiff's second cause of action is for quantum meruit based upon work, labor and services rendered. The elements of a claim for quantum meruit are: [1] the performance of services in good faith; [2] the acceptance of services by the person to whom they are rendered; [3] an expectation of compensation and [4] the reasonable value of the services. Miranco Contracting Corp. v. Perel. 57 AD3d 956 (2nd Dept. 2008).

There is no question that Mr. Rubino performed extensive services for Dr. Schwartz' project. There is no question that Dr. Schwartz accepted those services. While the services were provided by Mr. Rubino personally, there is no evidence contradicting Mr. Rubino's testimony that plaintiff is a professional corporation solely owned by him and it is the business entity through which he provides his personal professional services.

Dr. Schwartz argues that Mr. Rubino had no reasonable expectation of payment because he was working on speculation. The court has already found, however, that Mr. Rubino's understanding of working "on speculation" was very different than that of Dr. Schwartz. Under Mr. Rubino's understanding, he always expected that he would get paid for his work. His understanding went to the timing of the payment.

In the context of reasonableness, the court finds that Mr. Rubino's expectation payment for services at his regular hourly rate was reasonable. Dr. Schwatrz' expectation that Mr. Rubino would only be paid for his services if the project was successful in attracting investors was unreasonable. It is based on an assumption that Mr. Rubino's payment for hourly services would be based on assuming all the risks of loss (no investors) but none of the benefits of success (no ownership interest in the business created).

Consequently, plaintiff has established its cause of action for quantum meruit, with the only issue left for the Court's consideration being what constitutes reasonable compensation.

Unjust Enrichment

Plaintiff's final cause of action is for unjust enrichment. An action to recover under a theory of unjust enrichment is based upon equitable principles that a person shall not be allowed to enrich himself unjustly at the expense of another. Banco Popular North America v. Lieberman, __ AD3d__, 2010 WL 2732046 (1st Dept. 2010). The claim for unjust enrichment in this case is based upon the identical facts supporting the claim for quantum meruit. Unjust enrichment and quantum meruit are, in this context, essentially identical claims seeking payment of reasonable compensation for services. Snyder v. Bronfman, 13 NY3d 504 (2009).

Consequently, the plaintiff has established a cause of action for unjust enrichment, with the only issue left for the Court's consideration being what constitutes reasonable compensation.

Affirmative Defenses

Although defendant does not separately argue all of the affirmative defenses raised in his answer in his post trial submission, the Court will briefly address why they do not bar judgment on plaintiff's causes of action for quantum meruit and unjust enrichment. As previously set forth in this decision, the plaintiff has set forth a viable cause of action for quantum meruit and unjust enrichment. Thus, the first affirmative defense for failure to state a cause of action fails.

The second affirmative defense of waiver, the fourth affirmative defense of estoppel and [*7]the fifth affirmative defense of laches all apparently are based upon the passage of time between the time the effective end of the project and plaintiff's demand for payment. A waiver is the intentional relinquishment of a known right that may be expressed in words or by a failure to act that evinces an intent not to make a claim. Jordan Panel Systems, Corp. v. Turner Construction Company, 45 AD3d 165 (1st dept. 2007). Equitable estoppel may be invoked as a defense where the failure to promptly assert a right renders it inequitable to permit the exercise of the right after a lapse of time. Charles v. Charles, 296 AD2d 547 (2nd dept. 2002). Laches requires not only a failure to act, but prejudice to the party if the stale right is enforced. Bailey v. Chernoff, 45 AD3d 1113 (3rd dept. 2007). There is simply no evidence whatsoever of an express waiver. At most, 18 months passed between the time Dr. Schwartz claims the project failed (March 2005) and the time plaintiff demanded payment (October 2006). There is no other evidence offered to suggest that the passage of this time, alone, constitutes waiver. Nor is there evidence of any inequity or prejudice to defendant that arose solely because plaintiff did not assert its rights sooner.

Since the court found that no contract was formed, the statute of frauds cannot bar its enforcement. While an implied contract claim that violates the state of frauds will not be enforced (Snyder v. Bronfman, supra ), there is no evidence that the relationship between the parties is one that otherwise requires a writing to be enforceable. GOL §5-701

.The sixth affirmative defense, based on non-occurrence of a condition precedent, appears to be predicated on defendant's failure to obtain financing for the project. As set forth above the failure to obtain financing does not bar the claims for quantum meruit or unjust enrichment.

Reasonable Compensation

Since plaintiff has prevailed on its claims of quantum meruit and unjust enrichment, the court has to decide what award of compensation is reasonable. In addition, plaintiff is only entitled to be compensated for those services for which it had a reasonable expectation of compensation.

Prior to February 2004, the parties had never had any discussion about retention and compensation. Mr. Rubino and/or plaintiff was "retained" before February 2004, if at all, by Mr. Lieberman. Mr. Lieberman was not acting as an "agent" of Dr. Schwartz at that time with authority to retain plaintiff to work for Dr. Schwartz. In any event, prior to February 2004, Mr. Rubino performed a limited task of updating existing projections, for which he received full payment in the amount of $500.00. Thus any claim for compensation for services done prior to February 2004 is rejected.

Dr. Schwartz credibly testified that his quest to find financing the project ended in earnest in March 2005. Plaintiffs' work product, some of which was introduced as exhibits in ths action, is dated no later than very early January 2005.Mr. Rubino's method of accounting for his time was not particularly rigorous or informative. It consisted of handwritten notations identifying a client and a number relating to time next to the client's name contained on a filofax calendar. The hours recorded, however, are substantially consistent with the hours set forth in the November 15, 2006 invoice. They are also consistent with the hours represented in the October 2004 communication from Mr. Rubino to Dr. Schwartz. [*8]

Mr. Rubino also testified that his customary hourly rate charged at or about the time he rendered work to Dr. Schwartz was $250 an hour. Although there was evidence elicited by defendant that Mr. Rubino charged other clients considerably less, the court finds that $250 an hour is reasonable. Not only was that the rate Mr. Rubino claims to have quoted Dr. Schwartz when the work was originally undertaken, but by at least October 2004, Mr. Rubino repeated to Dr. Schwartz that his hourly rate was $250 an hour. Notwithstanding Dr. Schwartz's claims that he first learned of Mr. Rubinos' hourly rate for the first time when he received the October 2004 memo, there is no evidence that he ever objected to the rate. He let Mr. Rubino continue to do work for him through at least March 2005.

Taking all of this into account, the court finds that plaintiff, as the corporation through which Mr. Rubino provided his professional services to Dr. Schwartz, is entitled to hourly compensation at the rate of $250 an hour from February 2004 through March 2005. Based upon the November 15, 2006 invoice and the hours logged in by Mr. Rubino, the court finds that the reasonable value of compensation for the services provided to defendant is $113,187.50. Since plaintiff prevailed only on the equitable cases of action, the court finds that plaintiff is entitled to pre-judgment interest at the statutory rate from October 25, 2006, the date that payment was first demanded by plaintiff. CPLR § 5001.

Based on the forgoing the court holds that plaintiff is entitled to a judgment against defendant on the second and third causes of action in the amount

of $113,187.50.

Conclusion

In accordance herewith it is hereby:

ORDERED that the Clerk of the court is directed to enter a judgment in favor of defendant and against the plaintiff dismissing the first cause of action in the complaint and it is further

ORDERED that the Clerk of the Court is to enter a single money judgment in favor of plaintiff and against defendant on the second and third causes of action in the amount of $113,187.50 together with interest from October 25, 2006, statutory costs and disbursements, and it is further

ORDERED that Clerk of the Court is to enter a judgment in favor of plaintiff and against defendant dismissing the six affirmative defenses contained in the answer and it is further

ORDERED that any requested relief not otherwise granted herein is denied and it is further

ORDERED that the parties may retrieve the exhibits proffered at trial from the courtroom on or before September 10, 2010, after which time they will be filed with the County Clerk, and it is further

ORDERED that this constitutes the courts decision and order after trial.

Dated: New York, New York

August 10, 2010

SO ORDERED: [*9]

___________________

J.G. J.S.C.