## Facts

- Turner Construction Company (Turner) was hired by Shelter Cove L.L.C. as general contractor for construction of a 104-unit apartment complex.
- Turner retained U.S. Framing Inc. (Framing) under a written framing subcontract executed at a January 16, 2013 meeting at Turner’s Albany office.
- A supply bond dated January 16, 2013 secured the lumber purchase for the job through Framing’s supplier.
- Framing began work under the subcontract, submitted pay applications, and accepted substantial payments from Turner.
- During spring 2013, Turner became concerned about delays and Framing’s lack of responsiveness; Framing asserted Turner was slowing progress through change-order and scheduling disputes.
- On or about June 3, 2013, Turner’s project manager (Jason Perillo) emailed Framing’s vice president stating that Turner was calling in the lumber supply bond and would seek pricing from other framing companies.
- Perillo stated he spoke with Framing’s president later the same day and that Framing confirmed it would still perform under the subcontract.
- On June 6, 2013, Framing sent Turner a letter treating the June 3 email as a termination of the subcontract and taking the position that Turner had breached first.
- Turner responded by letter stating the June 3 email was not a termination and that Turner expected Framing to proceed with performance.
- Framing did not resume performance. Turner later issued a written termination notice based on Framing’s failure or refusal to perform and sued for breach of contract. Framing asserted counterclaims, including that Turner wrongfully terminated or repudiated the subcontract.
- After discovery and cross-motions for partial summary judgment, the parties stipulated that the court could decide liability on the written record and resolve factual disputes (a nonjury determination on papers under CPLR 4213), with damages to be addressed later.

## Issues

1. Whether Framing could rescind or avoid the subcontract based on claimed lack of timely notice that Turner had countersigned and fully executed the subcontract, despite Framing’s performance and acceptance of payment.
2. Whether Turner’s June 3 email (calling the supply bond and seeking other framers’ pricing) was a clear and unequivocal anticipatory repudiation that excused Framing from further performance.
3. If the email could be read as a repudiation, whether Turner effectively retracted it before Framing materially changed position, and whether Framing’s stopping work constituted a breach requiring dismissal of its counterclaims.

## Decision

- The court determined liability in Turner’s favor on its breach-of-contract claim, leaving damages for later proceedings.
- The court rejected Framing’s rescission theory, finding Framing waived (and was barred by equitable estoppel from asserting) rescission based on execution-notice arguments because it executed the subcontract, performed, and accepted substantial payments without timely objection.
- The court held Turner’s June 3 email did not amount to anticipatory repudiation because it was not a clear, positive, and unequivocal statement that Turner would not perform or that the subcontract was terminated.
- The court further held that, even if the email were viewed as threatening nonperformance, Turner promptly clarified in writing that it was not terminating and demanded continued performance, which operated as a retraction before Framing could treat the contract as ended.
- Because Framing ceased performance without a valid excuse, the court rejected Framing’s counterclaims premised on wrongful termination or prior breach by Turner.

## Legal Principles

- A party that treats a contract as valid by performing under it and accepting payments may waive, and may be equitably estopped from asserting, a later rescission claim based on alleged execution or notice defects.
- Anticipatory repudiation under New York law requires a clear, positive, and unequivocal refusal to perform; ambiguous statements, protective steps, or pressure to cure performance problems are not enough.
- A party may seek adequate assurance or take steps to protect itself when it has reasonable grounds to believe the other party may not perform; doing so does not, by itself, terminate the contract.
- A repudiation can be retracted if the retraction is communicated before the nonrepudiating party materially changes position in reliance on the alleged repudiation.
- Counterclaims for wrongful termination or related relief fail where the claimant’s own refusal to perform is not excused and the contract governs the parties’ relationship.

## Conclusion

The Supreme Court, Albany County held that Framing could not rescind the framing subcontract after executing it, performing, and accepting substantial payment, and that Turner’s June 3 email about calling the lumber supply bond and seeking other pricing was not a clear anticipatory repudiation (and was promptly clarified and retracted in any event). With no valid basis to stop work, Framing’s cessation of performance amounted to breach, so Turner prevailed on liability and Framing’s counterclaims tied to alleged termination or prior breach were dismissed, with damages reserved for later determination.


Turner Const. Co. v. US Framing Inc., 28 N.Y.S.3d 651, 49 Misc. 3d 1213(A) (2015)