Wednesday, December 25, 2013

Kel Kim Corp. v. Central Markets, Inc. case brief

Kel Kim Corp. v. Central Markets, Inc. case brief summary
519 N.E.2d 295 (N.Y. 1987)

CASE SYNOPSIS
Plaintiff lessee and individual guarantors sought review of an order from the Appellate Division of the Supreme Court in the Third Judicial Department (New York), affirming an order that granted defendant lessors' motion for summary judgment declaring that a lease between was nullified, and directed plaintiff lessee to vacate the premises. Plaintiffs contended that they should have been excused from an insurance provision in the lease.

CASE FACTS
Plaintiff lessee entered into a lease agreement with defendant lessors that required plaintiff lessee to maintain a liability insurance policy of not less than $ 1 million. After having such coverage for six years, plaintiff lessee was unable to obtain a policy for $ 1 million. Defendants sent a notice of default, directing plaintiff lessee to cure within 30 days or vacate the premises. Plaintiff lessee and individual guarantors filed a declaratory judgment action, urging that they should have been excused from compliance with the insurance provision either because performance was impossible or because the inability to procure insurance was within the lease's force majeure clause. The trial court granted defendants' motion for summary judgment, nullified the lease, and directed plaintiff lessee to vacate the premises and the appellate court affirmed the judgment.

DISCUSSION

  • On review, the court affirmed the order. 
  • Plaintiff lessee's situation was not within the embrace of the doctrine of impossibility. 
  • The force majeure clause did not specifically include plaintiff lessee's inability to procure and maintain insurance and this inability did not fall within a catchall phrase.
CONCLUSION
The court affirmed the order that had affirmed an order that granted defendant lessors' motion for summary judgment, nullified a lease, and directed plaintiff lessee to vacate the premises. The events listed in the force majeure clause were different in kind and nature from plaintiff lessee's inability to procure and maintain public liability insurance and plaintiff lessee's inability to obtain such insurance was not due to impossibility.

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