The instant controversy concerning a claim by plaintiff Perfect Crown Vic, Inc. ("Perfect Crown") for damages allegedly resulting from defendant Douce Hacking Corp.'s ("Douce") ^[FN1] removal of its two taxi medallions from vehicles owned by plaintiff was tried non-jury before this Court from February 27 through March 1, 2007.

Perfect Crown owns a fleet of vehicles which are operated as yellow taxicabs by third parties who hire them from plaintiff. The owner of a taxi medallion may lease it to another for use on a vehicle not owned by the medallion owner; a properly-equipped taxi may not be operated in New York City without a medallion. Defendant owns two such medallions which he leases to others.

It is undisputed that a written contract dated May 31, 2003, ("Management Agreement") governs the relationship of the parties. The relationship pursuant to which plaintiff leased the two New York City medallions owned by defendant began in 1994 and has been renewed periodically. In May 2003, the parties discussed the renewal of the contract specifically in light of an impending Taxi and Limousine Commission (TLC) fare increase expected to take effect during the term of the three-year contract which would terminate on May 31, 2006. At defendant's request, the following provision was parenthetically inserted beneath paragraph 3.1 which defines the consideration for defendant's granting to plaintiff the "exclusive right to lease the Medallion" at $1400 per month per medallion:

"(WHENEVER THE TLC ISSUES A RAISE ON THE METER THIS CONTRACT WILL BE RENAGOATED [sic])"

On May 3, 2004, the TLC instituted a rate increase , whereupon plaintiff began to pay [*2]defendant an additional $50 per month per medallion which was accepted by defendant. The evidence at trial reflects that, beginning in September 2004, efforts were made at renegotiation, but no new agreement was reached. On February 25, 2005, defendant notified plaintiff to surrender the medallions to the owners' section of the NYC TLC. Plaintiff complied with this demand and commenced the instant suit to recover $126,999.14 in damages resulting from defendant's breach of the Agreement.

Called as plaintiff's first witness, Alphonse Duval testified that although he did request the renegotiation provision, that he alone signed the Agreement at plaintiff's business location in May 2003, and did not receive a copy of the Agreement until September 2004 when it was mailed to him at his request by Bharpahl Singh, plaintiff's General Manager. Mr. Duval denied consulting an attorney prior to signing and insists that the Agreement was drafted exclusively by, and must therefore be construed against, plaintiff. Mr. Duval also testified that he did not know that, upon institution of TLC's increase in May, 2004, he began to receive an additional $50 per month per medallion, claiming that he only became aware of such increase when he spoke to Mr. Singh regarding renegotiation in September 2004. It is undisputed that the sums due to defendant were, at Mr. Duval's direction, paid directly to Melrose Credit, which held the mortgage on the subject medallions, and to Duval's personal accounts. This Court finds Mr. Duval's testimony to be replete with inconsistences and improbabilities and accordingly rejects it as incredible, crediting the testimonies of plaintiff's witnesses as more accurately representing the facts.

The Management Agreement is signed by Alphonse Duval as President of Douce and by Malcolm Rattner as President of Perfect Crown. Each page is also initialed by Mr. Duval. Both signatures were notarized by Richard Kovacs, an employee of an affiliate of Perfect Crown, at Perfect Crown's office on May 31, 2003. Such notarization is presumed to be valid. See Executive Law § 137. Despite Mr. Duval's denial that Mr. Rattner and he executed the document simultaneously, the credible testimony of Bharpahl Singh, Malcom Rattner and notary Richard Kovacs, as well as the documents in evidence, establish the following.

Mr. Duval was mailed a copy of the proposed contract one week in advance and conferred with an attorney prior to coming to plaintiff's office to sign the Agreement. At Mr. Duval's request, the typewritten provision for renegotiation was inserted, as was a handwritten adjustment of the allocation of insurance costs which was initialed by Mr. Rattner as well as by Mr. Duval whose initials appear at the bottom of each page. Mr. Singh testified credibly that Mr. Rattner signed first and that he saw Mr. Duval write the number $50 under the parenthetical provision for renegotiation after Mr. Singh had typed in such provision at Mr. Rattner's direction to give Mr. Duval "whatever he wants". Both Rattner and Singh testified that the $50 was written by Mr. Duval only on his own copy of the Agreement in response to Mr. Rattner's question as to what he wanted, insisting that plaintiff could not agree to an open-ended contract. It is noted that the copy of the Agreement containing the handwritten $50 was supplied by defendant.

In contrast to Mr. Duval's contention that he was unable to reach Rattner following the TLC increase and was not even aware that he was in fact receiving the additional $100 per month beginning in May 2004, Mr. Rattner testified that Duval telephoned him the day following the institution of the increase to remind him ("you know what you have to do") to pay the additional [*3]sum. The next day, in gratitude, Mr. Duval brought Haitian food from his restaurant to plaintiff's business premises. Both Mr. Singh and Mr. Kovacs corroborate this incident and even Mr. Duval acknowledged bringing the food to the garage.

After accepting the additional $50 per month per medallion for five months, in September 2004, Duval approached plaintiff to renegotiate the terms of the Agreement, seeking $1700 per month per medallion, claiming that that was the "new going rate". Rattner testified that Duval had indicated that he was in financial difficulty and needed more money. In response, in October, plaintiff prepared a proposed "Amendment to Management Agreement dated May 31, 2003" providing for consideration of "One thousand six hundred ($1650.00) per month per medallion"beginning January 31, 2004 and ending May 31, 2009. (Extended 3 year)". This document was left by Frank Lambert, an employee of plaintiff who was also a good friend of Mr. Duval, at Duval's restaurant.^[FN2] Apart from the obvious discrepancy in the stated compensation, the proposal was not acceptable to defendant, who continued to insist upon the $1700 figure, and the proposed Amendment was never signed. Defendant continued to receive the additional $100 per month and Mr. Duval continued to telephone plaintiff and occasionally visited the garage.

In January 2005, an entirely new proposed "Management Agreement" was mailed to defendant which called for a five year term to be measured from the date of signing and provided for consideration of "$1,700.00 per month for both medallion's [sic]". Not surprisingly, this proposal (Defendant's Exhibit B), apparently in error as to the consideration ("both" as opposed to "each" medallion), was unacceptable and was never signed. Thereafter, prior to defendant's letter of February 25, according to Mr. Rattner, he met with Mr. Duval in his restaurant to attempt to conclude a new agreement. Defendant's Exhibit D in evidence is a napkin upon which is written : "2,000 DOLLAR SINIg [sic-signing] BONAS [sic] 6 YRI [sic-if] MeATeR [sic] GeTS RAiS [sic] you will Receive $50 MORE". Mr. Duval testified that the conversation reflected in the exhibit took place in September 2004 and that the new proposed Management Agreement of January 2005 followed the conversation. Mr. Rattner did not initially remember that the meeting with Duval had taken place at all but did acknowledge that he had offered Duval the $2000 signing bonus to assuage his need for immediate cash.^[FN3]When Duval insisted on the $1700 per medallion, which he said he had been offered by someone else, Rattner testified that he told Duval the "negotiations [were] over". Defendant's letter of February 25, 2005, directing the return of the medallions, followed. Defendant continued to receive the additional $50 per month per medallion through February, 2005. Mr. Duval denies writing the $50 that appears in his copy of the Management Agreement immediately beneath the parenthetical provision for renegotiation. It is noted that plaintiff's Exhibit I, the original of the Management Agreement, does not contain the $50 notation. It is undisputed that defendant's copy does contain this notation. [*4]

Defendant argues that the Management Agreement was drafted by plaintiff and should therefore be construed against plaintiff, and that the handwritten $50 should be disregarded. However, paragraph 11.1 of the Management Agreement states: "It is specifically understood and agreed by and between the parties that the written Agreement is the result of extensive negotiations between the parties hereto. It is understood and agreed that both parties shall be deemed to have drawn these documents in order to avoid any negative inference by any Court as against the prepared [sic] of these documents." Paragraph 13 reiterates: "This agreement has been prepared by both parties". The evidence is that defendant has been in the taxicab business since 1975 and has been leasing taxicab medallions to plaintiff since 1994. Mr. Duval purchased the subject medallions in 1980 and has leased them to others prior to his contract with plaintiff. Mr. Duval further acknowledges that, upon plaintiff's surrender of the medallions at defendant's direction, the medallions were transferred directly to a new lessee. Further, it was at defendant's request, upon advice of counsel, that amendments were made to the Agreement providing for renegotiation and for adjustment of the cost allocation of insurance. Clearly, defendant is an experienced and sophisticated business entity that actively participated in the negotiation of the Agreement. A contract ,express in its terms, should be interpreted and applied consistent therewith. South Road Assoc., LLC v. International Business Machines Corp., 4 NY3 272, 277 (2005); W.W.W. Assoc.v. Giancontieri, 77 NY2d 157 (1990). There is no reason to make an inference against plaintiff under the facts at bar.

With respect to the substance of the instant dispute, this Court credits the testimony of plaintiff's witnesses Rattner and Singh, both of whom saw defendant write $50 under the typed provision for renegotiation. While a written agreement may not be changed by oral testimony (GOL § 15-301) and paragraph 8.0 of the Agreement ("Entire Agreement: No Waiver") is the usual merger clause, oral testimony is permissible to explain any ambiguities. Pierson v. Willets Point Contracting Corp., 899 F. Supp. 1033, 1041 (EDNY 1995); Geothermal Energy Corp. V. Caithness Corp., 34 AD3d 420, 424 (2d Dep't, 2006). Standing alone, the $50 notation under the renegotiation provision in the Agreement is not unambiguously conclusive of the amount to be added to "compensation" upon TLC's increase in the meter rate, but its proximity to the provision does make it unequivocally referable thereto. Moreover, the credible oral testimony does establish that the written contract was amended by hand at the time of its execution to supply the agreed increase to be effected upon TLC's increase in meter rates. Where a handwritten provision conflicts with a typed provision, the handwriting controls as to interpretation. Honigsbaum's , Inc.v. Stuyvesant Plaza, Inc., 178 AD2d 702 (3d Dep't, 1991).

Furthermore, defendant's acceptance for a period of ten months of plaintiff's implementation of the agreed increase immediately upon the occurrence of the specified event, in reliance upon the negotiated terms as reflected in the Agreement, constitutes a ratification of the handwritten amendment and corroborates the parole evidence regarding the negotiation thereof. The conduct of the parties may evidence the modification of the terms of a written contract. See Daimon v. Fridman, 5 AD3d 426, 427-28 (2d Dep't, 2004); J&R Landscaping, Inc.v. Damianos, 1 AD3d 563 (2d Dep't, 2003); Eldor Contracting Corp.v. County of Nassau, 272 AD2d 509 (2d Dep't, 2000); Recon Car Corp.v. Chrysler Corporation, 130 AD2d 725 (2d Dep't., 1987). Defendant's acceptance of the benefit of plaintiff's payments and its failure to timely object precludes its present effort to evade enforcement of the terms of the Agreement. See Capstone [*5]Enterprises of Port Chester, Inc. V. County, 262 AD2d 343 (2d Dep't, 1999). Where performance is unequivocally referable to a modification of written terms, and one party's conduct has induced the other to rely upon such modification, even where it is entirely oral, the party accepting such performance may be estopped from disputing the modification. Rose v. Spa Realty Associates, 42 NY2d 338, 340-41 (1977). Here, not only was there substantial performance of the modification by plaintiff in paying the additional compensation, and acceptance thereof by defendant for a ten-month period, but that modification is reflected in the written Agreement itself. The Court rejects defendant's arguments that the General Obligations Law §§ 15-301 and 5-701 preclude plaintiff's recovery.

The evidence does clearly indicate that plaintiff attempted to renegotiate the terms of the Management Agreement of May 31, 2003, but only in response to defendant's belated requests made in September 2004, after having accepted the additional $50 per month per medallion for five months. Plaintiff attempted to placate defendant who was demanding $1700 per month per medallion apparently based upon what Mr. Duval believed was "the going rate" at the time and based upon Mr. Duval's representation that he had received offers of such compensation. The proffered terms of the renegotiation would also have extended the contract for several years. The Court infers, based upon Mr. Rattner's testimony, that plaintiff's offers to defendant were induced by the long-term friendship between the parties and sympathy for defendant's immediate financial plight. Undoubtedly, plaintiff was also trying to avoid the loss of defendant's medallions and the substantial financial consequences to plaintiff. The fact that plaintiff did unsuccessfully attempt to negotiate does not, however, alter the terms previously negotiated as reflected in the written document.

Defendant argues in the alternative that plaintiff has not adequately proved damages.

As a threshold matter, the Court notes that Paragraph 4.4 of the Management Agreement expressly states:

OWNER [Douce] acknowledges that MANAGER

[Perfect Crown] is expending large sums of money to

obtain and maintain the taxi upon which the Medallion

is placed, and acknowledges that the designation of

MANAGER as OWNER'S agent to operate the

Medallion for the duration of this Agreement is

coupled with MANAGER'S interest therein . . .

There was no discussion at trial of this contractual provision or its purpose per se, but, at the least, it constitutes an express recognition by defendant that plaintiff was incurring costs relating to the performance of the Agreement and would suffer a loss upon its termination. Clearly, the consequential damages sustained by plaintiff upon defendant's removal of the medallions were foreseeable and within the express contemplation of the parties. See Ashland Management, Inc.v. Janien, 82 NY2d 395, 403-405 (1993).

Plaintiff's president Malcolm Rattner testified that TLC regulations require a corporate entity to have at least two medallions and that each taxi, properly outfitted according to specifications, costs $23,000. Without a medallion, the car cannot be used. There are a limited number of medallions authorized by the TLC and demand exceeds supply so that replacement of a lost medallion is not easily accomplished. Richard Kovacs testified that the vehicles, which are [*6]owned by plaintiff, are "leased" to drivers for twelve-hour shifts at $115 per shift, seven days a week. The two medallions leased from defendant would have generated $460 per day. Deducting the various costs associated with maintaining the vehicles, including workers compensation insurance for drivers, Mr. Rich "projected" plaintiff's lost income at $115, 443.67 for the period March 7, 2005, when the medallions were surrendered, to the termination of the Agreement on May 31, 2006. The figure of $126,999.14 demanded in the complaint is not supported by the evidence since the vehicles purportedly remained idle and no actual operating costs were incurred. However, plaintiff did lose the use of the vehicles for which it paid $46, 000 and is entitled to recoup its lost profit. The calculation of lost profit , though required to be proved with reasonable certainty, often requires approximation. Ashland Management v. Janien, at 403-405. The evidence adduced by plaintiff provides a reasonable, reliable foundation upon which to calculate plaintiff's damages.

Accordingly, in granting judgment for plaintiff, this Court finds that the damages sustained by plaintiff as a result of defendant's breach of the Agreement may reasonably be estimated, based upon the evidence, to be $28, 843.67. This sum is calculated taking the $115,443.67 representing the net income to be derived from the daily operation of the vehicles after deducting the cost of operation (which was not incurred by plaintiff due to the fact that the taxis could not be driven without the medallions) and deducting therefrom the $40,600 which would have been paid to defendant for the use of the medallions over the fourteen months remaining on the Agreement ($1450 per month per medallion x 14 months) and $46,000 as the initial cost of the vehicles. Plaintiff may enter judgment for $28,843.67 with interest from the date of surrender of the medallions, March 7, 2005.

The foregoing constitutes the decision and order of the Court.

E N T E R :

J.S.C.