Contracts

Eitan Ventures, LLC v Peeled, Inc., 2012 NY Slip Op 03085 (1st Dept., 2012)

When construing a contract, the most important consideration is to give effect to the parties' intentions (Federal Ins. Co v Americas Ins. Co., 258 AD2d 39, 44 [1999]). To ascertain those intentions, a court should examine the contract as a whole and interpret its parts with reference to the whole (see Kass v Kass, 91 NY2d 554, 566-567 [1998]).

Kaplan v Madison Park Group Owners, LLC, 2012 NY Slip Op 03086 (1st Dept., 2012)

By definition an anticipatory breach cannot be committed by a party already in material breach of an executory contract. It is well settled that an anticipatory breach of a contract is one that occurs before performance by the breaching party is due. For example, in Norcon Power Partners v Niagara Mohawk Power Corp. (92 NY2d 458 [1998]) the Court of Appeals defined an anticipatory repudiation as one that occurs "prior to the time designated for performance" (id. at 462-463). Consistently, in American List Corp. v U.S. News & World Report (75 NY2d 38 [1989]) the Court defined an anticipatory breach in terms of "a wrongful repudiation of the contract by one party before the time for performance" (id. at 44). Applying New York law, the United States Court of Appeals for the Second Circuit held that "[a]nticipatory repudiation occurs when, before the time for performance has arisen, a party to a contract declares his intention not to fulfill a contractual duty" (Lucente v International Bus. Machs. Corp., 310 F3d 243, 258 [2d Cir 2002] [citations omitted]). The rationale behind the doctrine of anticipatory breach is that it gives the non-repudiating party an opportunity to treat a repudiation as an anticipatory breach without having to futilely tender performance or wait for the other party's time for performance to arrive (see Cooper v Bosse, 85 AD2d 616, 618 [1981]). As noted above, plaintiffs were in default as of July 27, 2009, two days before the letter was sent. Once plaintiffs defaulted on July 27, Lipman did not have to tender performance or wait for a law date because [*3]he could have resorted to the contractual remedies for plaintiffs' breach set forth under paragraph 13. Accordingly, the July 29, 2009 letter did not give rise to an anticipatory repudiation because it was not issued "prior to the time designated for performance" within the meaning of Norcon and the other cases cited above.

Princes Point, LLC v AKRF Eng'g, P.C., 2012 NY Slip Op 02954 (1st Dept., 2012)

Plaintiff's motion to amend the complaint to add additional causes of action was properly denied. Plaintiff's claims for promissory estoppel and fraud relating to the June 2004 contract fail since, pursuant to the contract, the property was being purchased "AS IS . . . AND WITH ALL FAULTS," and plaintiff was relying solely on its own inspections of the property. Thus, plaintiff accepted all defects in the premises and was not relying on any assurances made by defendants as to the condition of the property (see Barnes v Gould, 83 AD2d 900 [1981], affd 55 NY2d 943 [1982). In addition, the proposed promissory estoppel claim is deficient because the contract included a clause stating that it represented the entire understanding between the parties (see Fariello v Checkmate Holdings, LLC, 82 AD3d 437, 438 [2001]).

Furthermore, the new damages sought, consequential and punitive, are unavailable to plaintiff on the claims asserted. Damages for fraud are to compensate plaintiffs for what they [*2]lost, " not to compensate them for what they might have gained'" (Starr Found. v American Intl. Group, Inc., 76 AD3d 25, 27 [2010], quoting Lama Holding Co. v Smith Barney Inc., 88 NY2d 413, 421 [1996]), and punitive damages are not warranted since plaintiff has not alleged wrongdoing evincing a high degree of moral turpitude that demonstrates such wanton dishonesty as to imply a criminal indifference to civil obligations (Ross v Louise Wise Servs., Inc., 8 NY3d 478 [2007]).

Plaintiff failed to plead facts that are sufficient to support a cause of action for prima facie tort because the allegations do not establish that defendants' purportedly tortious conduct was motivated by an otherwise lawful act performed with the intent to injure or with a "disinterested malevolence" (see Curiano v Suozzi, 63 NY2d 113, 117 [1984]; Kleinerman v 245 E. 87 Tenants Corp., 74 AD3d 448 [2010]). Plaintiff's allegation of malevolence is contrary to its allegation concerning defendants' alleged profit motives (see Meridian Capital Partners, Inc. v Fifth Ave. 58/59 Acquisition Co. L.P., 60 AD3d 434 [2009]).

Josephson LLC v Column Fin., Inc., 2012 NY Slip Op 02588 (1st Dept., 2012)

Defendants contend that the breach of contract cause of action should be dismissed because the subject contract expressly prohibits oral modifications and the alleged oral agreement is barred by the Statute of Frauds (see General Obligations Law § 15-301). Plaintiffs failed to raise an issue of fact whether there was a partial performance of the contract that would permit enforcement of the oral modification (see F. Garofalo Elec. Co. v New York Univ., 270 AD2d 76, 80-81 [2000], lv dismissed 95 NY2d 825 [2000]). The act they identify as partial performance, i.e., the delivery of the purchase price to the title company, is not "unequivocally referable" to the oral modification; it can also reasonably be regarded as preparatory to performing the contract (see e.g. Merrill Lynch Interfunding, Inc. v Argenti, 155 F3d 113, 122-123 [1998]). Further, the record demonstrates that the parties did not agree on all the material terms of the alleged oral agreement. The deposition testimony upon which plaintiffs rely reflects a mere agreement to agree (see e.g. Meyers Assoc., L.P. v Conolog Corp., 61 AD3d 547 [2009]). [*2]

Plaintiffs abandoned their remaining claims by failing to oppose the parts of defendants' motion that sought summary judgment dismissing those claims.

Garber v Stevens, 2012 NY Slip Op 02437 (1st Dept., 2012)

Defendants' affirmative defenses of fraud and/or unconscionability, which were not asserted in their answer or raised on a prior motion, were properly rejected (see BMX Worldwide v Coppola N.Y.C., 287 AD2d 383, 384 [2001]).

Defendants' reliance on plaintiffs' silence and inaction to establish the defenses of waiver and/or equitable estoppel is misplaced (Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P., 7 NY3d 96, 105-107 [2006]; EchoStar Satellite L.L.C. v ESPN, Inc., 79 AD3d 614, 617 [2010]. Plaintiffs did not discover many of the acts about which they now complain until long after they entered into the agreement, in part, because of defendants' subterfuge and violation of that agreement. Moreover, defendants' last alleged violation occurred in 2005, the same year the complaint was filed.

Finally, laches is unavailable as a defense to the claims of breach of contract, breach of fiduciary duty and for the return of management fees, which, although brought together as a derivative action, are not equitable in nature (see e.g. Cadlerock, L.L.C. v Renner, 72 AD3d 454, 454 [2010]; see also Pfeiffer v Berke, 4 Misc 2d 918 [Sup Ct, Kings County 1953]).

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