Huyler's v. Ritz-Carlton Restaurant & Hotel Co.

• Decision Date: 09 June 1925
• Parties: HUYLER'S v. RITZ-CARLTON RESTAURANT & HOTEL CO. OF ATLANTIC CITY.
• Court: U.S. District Court — District of Delaware

6 F.2d 404 (1925)

HUYLER'S v. RITZ-CARLTON RESTAURANT & HOTEL CO. OF ATLANTIC CITY.

District Court, D. Delaware.

June 9, 1925.

Herbert H. Ward (of Ward, Gray & Ward), of Wilmington, Del., and Roger Hinds, of New York City, for plaintiff.

Robert H. Richards, of Wilmington, Del., and George A. Bourgeois, of Atlantic City, N. J., for defendant.

MORRIS, District Judge.

After the opinion of September 8th last was handed down (1 F.2d 491), the plaintiff, Huyler's, by amendment changed the form of its action from case to covenant. It then filed a new declaration, in which it relies upon the lease alone and seeks damages, special as well as general, for an alleged breach by the defendant, the Ritz-Carlton Restaurant & Hotel Company of Atlantic City, of those covenants of the lease whereby the defendant, as lessor, agreed to erect a building and give to the plaintiff, as lessee, possession of a specified portion thereof. The defendant has demurred to the declaration upon the grounds that some of the facts there pleaded in support of plaintiff's claim for special damages are such only as constitute evidence of general damages, and that the remainder seek to vary the terms of the written lease, and in addition thereto constitute a basis for speculative damages only. The challenged allegations of the plaintiff are:

"That the premises described in said lease from defendant to plaintiff, had said building been constructed and possession delivered to plaintiff in accordance with defendant's agreements and covenants, would have furnished and made available to said plaintiff, for its use or subletting, not only an exceptionally light, desirably located corner store on the Boardwalk, in the immediate neighborhood of the store which plaintiff surrendered to defendant, but also the benefits and advantages of the following valuable features (among others) as provided for in said lease, to wit: The privilege of an electric sign on the roof, which is of great value on said Boardwalk; a direct interior doorway into the corridor of the theater and auditorium, which, because of the passing crowds of theater patrons, is of great merchandising and advertising value; the exclusive privilege of selling candy in said building; the privilege of subletting; the privilege of renewal; and the provision for a store at the beach level, which is of great advertising value, because of its novelty and uniqueness, and of great merchandising value because of the trade of persons in bathing suits, to whom the Boardwalk stores are not available."

"That there are no premises in said neighborhood which can be leased by said plaintiff having the same desirable features as the premises described in said lease. That the benefits, advantages, and features of said lease as hereinabove set forth, and the damages which plaintiff would suffer by being deprived thereof, were contemplated and well understood by the plaintiff and defendant, and discussed between them at and prior to the making of said agreement and lease. That the said parties also then contemplated, well understood, and discussed between them the following special uses, benefits, and advantages of said promised lease and leased premises, as well as the special damages which plaintiff would suffer if deprived thereof, to wit: That the erection of the then proposed Hotel Ritz-Carlton and the promised building on the adjoining block would greatly enhance all store rental values in that neighborhood, and greatly increase the volume and profits of retail sales there; that the promised store in the proposed building in the adjoining block because of its contiguity with the promised theater and bathing pavilion, would actually have a higher rental value, foot for foot, than stores in the proposed Hotel Ritz-Carlton itself, that the volume of business and profits which plaintiff would enjoy from a confectionery store in said promised store on the Boardwalk level would exceed the volume and profits of plaintiff's store at No. 1119 Boardwalk, Atlantic City, viz. a volume of over $70,000 per annum and profits of over $22,000 per annum; that the promised store at the beach level would attract bathers in large numbers, and the sales and profits therefrom would be very great. That the said uses, benefits, and advantages, as so contemplated, understood, and discussed, would in fact have been attributes of the promised lease and premises, if said building had been erected as promised, and by being deprived thereof plaintiff was actually damaged as aforesaid * * * and has been deprived of and prevented from receiving large gains and profits which it would otherwise have gained and received * * *".

The facts which, as defendant contends, afford no support for special damages, but have the infirmity of being merely evidential of the amount of general damages, are those not inclosed in brackets.

Is this contention sound? The law seems to be settled beyond dispute that for a breach by a lessor of his covenant to give the lessee possession of the demised premises or of his covenant to erect a building the lessee is entitled by way of general damages to the difference between the rent reserved by the lease and the actual rental...