Morris v. 702 East 5th St. Hous. Dev. Fund Corp.

• Decision Date: 06 January 2011
• Docket Number: Mot. Scq. No. 022,Index No 116533/95
• Citation: Morris v. 702 East 5th St. Hous. Dev. Fund Corp., 2011 NY Slip Op 30054, Index No 116533/95, Mot. Scq. No. 022 (N.Y. Sup. Ct. Jan 06, 2011)
• Parties: BRUCE MORRIS, Plaintiff, v. 702 EAST 5th STREET HOUSING DEVELOPMENT FUND CORP., Defendant.
• Court: New York Supreme Court

2011 NY Slip Op 30054

BRUCE MORRIS, Plaintiff,

v.702 EAST 5th STREET HOUSING DEVELOPMENT FUND CORP., Defendant.

Index No 116533/95

Mot. Scq. No. 022

SUPREME COURT OF THESTATE OF NEW YORK

COUNTY OF NEW YORK

CIVIL TERM

PART 19

January 06, 2011

Submission Date October 10, 2010

DECISION & ORDER

Appearances:

For Plaintiff:

Jerome Greenberg, Esq.

For Defendant:

James Briscoe West, PLLC

By James Briscoe, Esq.

Papers considered in review of this motion for a default judgment

Papers Number

Affirm, in Supp. with Exhib, Attached...........................................................1

Notice of Cross-Mot. and Affirm, in Supp.....................................................2

Memo of Law in Supp, of Cross-Mot.............................................................3

Def. Affirm in Further Supp. and Opp. to Cross-Mot.....................................4

HON SALIANN SCARPULIA, J.:

Defendant702 East 5lh Street Housing Development Fund Corp.("702 East 5th Street") brings this motion to dismiss the First cause of action in the supplemental complaint on the ground of statute of limitations under CPLR 203(f), for summary judgment pursuant to CPLR 3212 on the first and third causes of action in the supplemental complaint, ¹ arguing that there are no triable issues of fact, and to strikeplaintiff's demand for jury trial included with the May 14, 2010 note of issue on the basis-of contractual waiver of jury trial.PlaintiffBruce Morris("Morris") opposes 702 East 5th Street's motion entirely and cross-moves for partial summary judgment on the third cause of action in the supplemental complaint for breach of the partial settlement agreement dated March 22, 2000.

This action traces its roots to a commercial lease the parties entered into on March 30, 1988.This fifteen-year-old proceeding has resulted in numerous decisions by this Court and the First Department.SeeMorris v 702 East Fifth Street HDFC, 8 A.D.3d 27(lst Dep't 2004)("Morris I") and Morris v 702 East Fifth Street HDFC, 46 A.D.3d 478(lst Dep't 2007)("Morris II").

In Morris II, the First Department rejected 702 East 5th Street's argument that Morris' first cause of action, for breach of the lease arising out of 702 East 5th Street's refusal to sign requests for the Department of Buildings permits, was barred by the statute of limitations.The First Department ruled that the supplemental complaint related back to the original complaint, and Morris' first cause of action was timely.The First Department also ruled that Morris sufficiently pled the third cause of action for breach of the March 22, 2000 settlement agreement.The First Department did not consider 702 East 5th Street's argument that Morris would not be able to establish entitlement to damages in the form of lost profits, deferring this issue to the summary judgment motion.

Morris argues that 702 East 5th Street's-breach of its obligations under the lease and breach of the settlement agreement resulted in distressing the profitability of his jazz club or cafeteria featuring live music.At the heart of Morris' argument lies a March 1, 1996 preliminary injunction enjoining Morris from producing live music except on string instruments between the hours of 4:00 p.m. and 9:00 p.m. on Friday, Saturday and Sunday and piano lessons between 11:00 a.m. and 7:00 p.m.The March 22, 2000 settlement agreement provided for 702 East 5th Street to withdraw this preliminary injunction once Morris installed adequate soundproofing.After Morris expended about ten thousand dollars soundproofing the premises, 702 East 5th Street failed to cooperate in sound testing, and instead insisted on maintaining the injunction by corporate resolution, dated February 10, 2001.

Eventually, on June 3, 2004, the First Department in Morris 1 found that Morris fully complied with the settlement agreement and that 507 East 5th Street breached the settlement agreement.Morris v702East Fifth Street HDFC, 8 A.D.3d 27, 29(1st Dep't2004).The First Department also ruled that the preliminary injunction violated Morris' First Amendment rights, because the preliminary injunction was premised on the type of instruments used, instead of the maximum volume of audible sound produced, as required under the New York City noise control regulations.The First Department ordered that the case be remanded and the sound tests performed as required by the settlement agreement.

On January 12, 2007, after reviewing the sound test results, this Court(Lehner, J.) fully lifted the preliminary injunction.In the period between March 22, 2000 and January 12, 2007, Morris alleges that he incurred lost profits, because the injunction placed his jazz club or cafeteria at a competitive disadvantage to the competing establishments in the area, which were not burdened by any restrictions on live music entertainment.To determine the amount of alleged lost profit, Morris offers copies of sales tax returns that show increase in sales at his cafeteria to coincide with the lifting of the restrictions on the type of instruments played.

The increase became more marked following the January 2007 lifting of the time-of-day restrictions on musical performance after the definitive sound tests established Morris' compliance with New York City noise control regulations.Morris argues that his losses are also augmented by the fact that when he opened the cafeteria, there were almost no similar establishments in the neighborhood, and by the time the injunction was lifted, numerous coffee shops and jazz clubs had opened up in the immediate vicinity.Morris, however, does not furnish an expert affidavit by an economist to support his claim.

In response, 702 East 5th Street argues that Morris had no experience in running either a jazz club, a night club or any other food and entertainment establishment for that matter, with no proven track record of profit to ascertain prospective earnings.702 East 5lh Street also points out that during the relevant time frame, Morris did not possess aliquor license and in no event could have been successful in running his jazz club or cafeteria.

Decision

Under CPLR 3212(b), summary judgment "shall be granted if, upon all papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party."The motion must be supported by (1) an affidavit, (2) by a copy of the pleadings and (3) by other available proof, such as depositions and written admissions.CPLR 3212 (b).To warrant a court's directing judgment as a matter of law, it must clearly appear that no material issue is presented for trial.Epstein v Scally, 99 A.D.2d 713(lst Dep't 1984).When a party has made a prima facie showing to entitle it to summary judgment, the burden shifts to the opposing party to show by evidentiary facts that the defense is real and can be established at trial.SeeIndig v Finkelstein, 23 N.Y.2d 728(1968);see alsoVogel v Blade Contr. Inc., 293 A.D.2d 376, 377(1st Dep't2002).Conclusory allegations or denials are insufficient to either warrant or defeat summary judgment.McGahee, vKennedy, 48 N.Y.2d 832, 834(1979).

While 702 East 5th Street's application is couched in the form of a summary judgment motion under CPER 3212, its submissions contain the same record and the same arguments that were available before the Appellate Division, First Department in Morris II.The First Department conclusively ruled in Morris II that Morris' first cause ofaction in the supplemental complaint was timely under the statute of limitations.²To the extent this motion is mostly an attempt to reargue Morris II, it must be denied.³

702 Hast 5th Street also argues that Morris' claims should be dismissed because he cannot prove lost profit damages as a matter of law.In a breach of contract context, lost profits are recoverable if they naturally flow from the breach.SeeLevine. v American Federal Group, Ltd., 180 A.D.2d 575, 577(1st Dep't1992)."To recover damages for lost profits, a plaintiff must show that damages were caused by the breach, that lost profits were contemplated by the parties when the contract was executed and that the alleged loss can be measured with reasonable certainty and are not speculative."Jambetta Music, Inc. v Nugent, 2008 N.Y. Slip. Op. 30363U, *14(Sup. Ct., New York County2008), citingAshland Mgmt. Inc. v Janien, 82 N.Y.2d 395, 404(1993).If the contract is silent as to recoverable damages, including lost profits, the courts inquire into the relevant circumstance surrounding execution of the contract to determine "the nature, purpose andparticular circumstances known by the parties... as well as 'what liability the defendant fairly may be supposed to have assumed consciously, or to have warranted the plaintiff reasonably to suppose that it had assumed, when the contract was made."Awards.com. v. Kinko's, Inc., 42 A.D.3d 178, 183-84(1st Dep't2007)(citations omitted).

The requirement of establishing damages with reasonable certainty is not absolute."Damages resulting from the loss of future profits arc often an approximation.The law docs not require that they be determined with mathematical precision.It requires only that damages be capable of measurement based upon known reliable factors without undue speculation."Ashland Mgmt. Inc. v Janien, 82 N.Y.2d 395, 403(1993), citingRestatement (Second)§ 352.

The court must implement a stricter evidentiary standard when damages for lost profit derive from the failure of a new business venture, because there does not exist a reasonable basis of experience upon which to estimate lost profits with the required degree of certainty.SeeZink v Mark Goodson Productions, Inc., 261 A.D.2d...