Wednesday, December 25, 2013

Van Wagner Advertising Corp. v. S & M Enterprises case brief

Van Wagner Advertising Corp. v. S & M Enterprises case brief summary
492 N.E.2d 756 (N.Y. 1986)

Plaintiff lessee and defendant building purchaser appealed from an order of Appellate Division of the Supreme Court in the First Judicial Department (New York), which affirmed a damage award to the lessee for wrongful lease termination and denied the lessee's motion to resettle the judgment to provide for specific performance.

The lease, which covered a building's exterior wall, stated the lessor or its successor could terminate the lease on 60 days notice if the building was sold. The lessor sold the building to the building purchaser who cancelled the lease.


  • The court held this cancellation constituted a breach of contract. 
  • The lease termination provision was ambiguous. 
  • The trial court's finding -- that the parol evidence supported an interpretation limiting the right to cancel only to the owner as it was about to sell the building -- was beyond the scope of the court's review. 
  • The court held the trial court did not abuse its discretion by denying specific performance because the value of the unique qualities of the demised space could be fixed with reasonable certainty and specific performance would impose undue hardship on the building purchaser. 
  • However, there had been an error in the assessment of damages. 
  • Based on the sublease of the demised space, the trial court properly calculated the lessee's lost profits, but erred in awarding the lost profits only through the date of the trial instead of for the sublease's duration. 
  • Further, damages should have been awarded through the lease's expiration.

The court modified the appellate court's order with respect to the assessment of damages and remitted the case to the trial court for further proceedings in accordance with the opinion. As so modified, it affirmed the appellate court's order.

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