Plant City Steel Corp. v. National Mach. Exch., Inc., 23 N.Y.2d 472 (1969)

A party may assert claims for both breach of an underlying contract and breach of an executory accord in the same action; the election of remedies need not be made before trial but only after the court determines whether the accord was breached.

Summary

Plant City Steel sued National Machinery for breach of contract, alleging a machine sold by National did not meet warranted specifications. The parties then entered into a settlement agreement (executory accord) where National would pay Plant City $13,000 upon return of the machine in the same condition. National refused to accept the returned machine, claiming it was damaged. Plant City then filed a supplemental complaint adding a claim for breach of the settlement agreement. The trial court allowed Plant City to wait until after the presentation of all evidence to elect its remedy. The New York Court of Appeals held that Plant City did not have to elect its remedy (between the original breach of contract claim and the breach of the executory accord) until after the court determined whether National had breached the executory accord.

Facts

Plant City Steel purchased a machine from National Machinery Exchange based on an advertisement warranting its capacity. After installation, Plant City discovered the machine could not perform as specified. Plant City notified National of the breach and demanded repayment. National refused, leading Plant City to sue. The parties then entered into a written stipulation of settlement (executory accord): National agreed to pay Plant City $13,000 upon the return of the machine in the same condition. Plant City returned the machine, but National refused acceptance, claiming it was not in the same condition as when delivered.

Procedural History

Plant City moved to serve a supplemental complaint in the original action, adding a cause of action for breach of the written settlement agreement (executory accord). The motion was granted without opposition from National. The trial court allowed Plant City to defer electing its remedy until after both parties presented evidence. The Appellate Division affirmed, finding National waived its right to compel an earlier election. The Court of Appeals granted review.

Issue(s)

Whether a plaintiff, in an action involving both a claim for breach of an underlying contract and a claim for breach of an executory accord settling that contract claim, must elect which remedy to pursue before trial.

Holding

No, because CPLR 3014 explicitly allows for pleading alternatively and hypothetically and because the plaintiff’s success on the contract claim depends on the defendant breaching the accord. The plaintiff can make his election after the court determines if the accord was breached.

Court’s Reasoning

The Court of Appeals rejected the rule established in Elliott v. Prockter Prods., which required election before trial. The court reasoned that such a rule is needlessly wasteful of judicial time and contrary to modern, liberal pleading rules. CPLR 3014 allows for alternative and hypothetical pleading. Requiring election before trial could force a plaintiff to bring two separate actions if their initial choice of remedy proves incorrect. The court stated that “[t]he spirit of the pleading provisions contained in the CPLR clearly indicates that procedural niceties are not ends in themselves, but only means to substantive justice.” Since Plant City’s success on the breach of contract claim depended on National breaching the accord, the court should determine the accord issue first, allowing Plant City to elect its remedy after that determination. Here, both lower courts found National breached the accord, so Plant City was free to pursue either the original claim or the accord.