Shane Campbell Gallery, Inc. v. Frieze Events, Inc.

• Decision Date: 27 February 2020
• Docket Number: 18-cv-5134 (JSR)
• Citation: 441 F.Supp.3d 1
• Parties: SHANE CAMPBELL GALLERY, INC., et al. Plaintiffs, v. FRIEZE EVENTS, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

441 F.Supp.3d 1

SHANE CAMPBELL GALLERY, INC., et al. Plaintiffs,

v.FRIEZE EVENTS, INC., Defendant.

18-cv-5134 (JSR)

United States District Court, S.D. New York.

February 27, 2020

David A. Searles, Pro Hac Vice, James A. Francis, Pro Hac Vice, Francis Mailman Soumilas P.C., Philadelphia, PA, Edward Aloysius Coleman Lewis Saul Lewis Saul & Associates, P.C. New York, NY, for Plaintiffs.

Michael Charles Lynch, James Bryan Saylor, Kelley Drye & Warren, LLP, New York, NY, for Defendant.

OPINION AND ORDER

JED S. RAKOFF, UNITED STATES DISTRICT JUDGE

Defendant Frieze Events, Inc. moves under Fed. R. Civ. P. 12(b)(6) to dismiss plaintiffs' complaint. For the reasons that follow, the motion is granted. Specifically, plaintiff Shane Campbell Gallery, Inc.'s breach of contract claim is dismissed without prejudice to repleading within one week. Shane Campbell Gallery's unjust enrichment claim is dismissed with prejudice. Both claims asserted by plaintiff Julie Campbell (hereinafter "co-plaintiff") are dismissed with prejudice.

With respect to the single claim dismissed without prejudice, the case management plan adopted at the February 25 in-court conference is amended as follows: plaintiff may replead in an amended complaint attempting to cure the deficiencies discussed in this opinion by no later than March 5, 2020. The first two discovery deadlines in the case management plan are extended from March 4 to March 11, but all other dates and deadlines remain unchanged. However, if, upon receipt of any amended complaint, defendant wishes to renew its motion to dismiss, counsel for the parties should jointly call Chambers by no later than 5 p.m. on March 6 to set a briefing schedule on any such motion.

I. Shane Campbell Gallery's Breach of Contract Claim

The instant dispute arises out of defendant's alleged failure to provide adequate air conditioning at the 2018 Frieze Art Fair. For the purposes of evaluating the sufficiency of plaintiff's pleading, the Court accepts the factual allegations in the complaint as true. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

Defendant Frieze Events, Inc. organizes the Frieze Art Fair, an event which takes place in New York City each May. First Am. Compl., ECF No. 6 (hereinafter "Compl."), ¶ 11. The Fair, which advertises itself as an opportunity for galleries to showcase and sell artwork to collectors and other attendees, sells booth space to various art galleries. See Id. ¶¶ 13, 17. Plaintiff Shane Campbell Gallery purchased a booth at the Frieze Art Fair each year from 2012 to 2018. Id. ¶¶ 12, 15-16.

The first two days of the 2018 Fair, which was held on Randall's Island, were very hot, with highs in the 90s. Id. ¶ 20. Because of the heatwave, the temperature inside the tent where plaintiff's booth was located became so high that attendees "were unable to bear the heat." Compl. ¶¶ 22, 24. (The Court takes judicial notice of the fact that the temperatures on May 2 and 3, 2018 broke daily record highs, but that even hotter days had previously occurred at least once in each month from April through October. See Central Park, NY Historical Data: Monthly Almanacs, www.weather.gov/okx/CentralParkHistorical.)

Plaintiff's contract with Frieze obligated the defendant to "use commercially reasonable efforts to provide common area ... air conditioning," Contract, Ex. A to Compl., ¶ 18, and indeed there were air conditioning vents located along the ceiling of the tent. Compl. ¶ 14. Nevertheless, plaintiff alleges that this air conditioning system was so ineffective as to constitute breach by defendant of its obligation to use commercially reasonable efforts to provide air conditioning. Plaintiff accordingly seeks rescission of the contract. Compl., Prayer for Relief ¶ C.

Even drawing all reasonable inferences in plaintiff's favor, these allegations are insufficient to support a breach of contract claim. The relevant contractual provision is paragraph 18, which provides in relevant part:

18. Electrical Services : Frieze will use commercially reasonable efforts to provide common area lighting, heating and air conditioning, but shall not be liable for any loss or damage due to failure or interruption of any service.

But other than the wholly conclusory statements in paragraphs 21 and 27 – which the Court must disregard, see Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 – the complaint alleges no facts suggesting that defendant breached its obligation to use commercially reasonable efforts to provide air conditioning.

The mere facts that it was exceedingly hot inside the tent despite the presence of air conditioning vents, and that the air conditioning system differed from that of previous years, Compl. ¶ 14, do not imply as much. The standard for satisfying commercial reasonability under New York law is a fairly lenient one; as another court in this District has explained, it "requires at the very least some conscious exertion to accomplish the agreed goal ...." Holland Loader Co., LLC v. FLSmidth A/S, 313 F. Supp. 3d 447, 473 (S.D.N.Y. 2018). And there are any number of reasons why the air conditioning system might have failed to cool the tent even if defendant had acted in a commercially reasonable manner.

Moreover, "[a] court's evaluation of a party's compliance with a ‘commercially reasonable efforts’ requirement does not involve a hindsight comparison of the party's actual conduct to that which could have been undertaken to produce a better result; a court should evaluate only whether the party's actual conduct was sufficient." Id. at 472-73. But the complaint alleges no facts that would allow the Court to evaluate defendant's "actual conduct." The complaint does not offer any information about what would have constituted a commercially-reasonable air conditioning system under the circumstances, nor does it allege that defendant's conduct fell short of this objective standard in any particular ways. Without any such information, plaintiff cannot "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

Plaintiff Shane Campbell Gallery's breach of contract claim is therefore dismissed, though with leave to replead in an amended complaint. In general, a court should grant leave to replead unless doing so would be futile. See Fed. R. Civ. P. 15(a)(2) ; Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 87-88 (2d Cir. 2002). Here, plaintiff's counsel proffered at oral argument that, after consulting an expert, counsel could plead specific ways in which defendant's conduct fell short of a commercial reasonability standard.

Further, defendant's attempts to read the contract to preclude liability under any circumstance are unavailing. As a matter of law, the contract provides that defendant is liable to plaintiff if defendant failed to use commercially reasonable efforts to provide air conditioning.

The second clause of paragraph 18 is not to the contrary. Defendant reads this language – which provides that Frieze "shall not be liable for any loss or damage due to failure or interruption of [air conditioning] service" – to mean that Frieze has no liability whatsoever for the alleged lack of air conditioning. Mem. of Law in Supp. of Mot. to Dismiss, ECF No. 33 (hereinafter "Mem."), at 12. But such a broad reading would render the first portion of paragraph 18 a nullity, in violation of basic principles of contract interpretation. Greater N.Y. Mut. Ins. Co. v. Mut. Marine Office, Inc., 3 A.D.3d 44, 50, 769 N.Y.S.2d 234 (N.Y. App. Div. 2003). The better reading of this clause, as plaintiff argues, is that it only shields Frieze from liability for losses resulting from a sudden or unexpected failure of the air conditioning system, such as from a power outage. Mem. of Law in Oppo. to Mot. to Dismiss, ECF No. 36 (hereinafter "Oppo."), at 15.

For similar reasons, an amended complaint would survive despite paragraph 13, which releases Frieze from liability for losses arising from "rain, wind or other weather conditions." To be sure, the language of paragraph 13 is very broad, and read literally, it might bar plaintiff's cause of action for losses resulting from the temperature in the tent. But again, such a reading would eviscerate defendant's obligation under paragraph 18 to use commercially reasonable efforts to provide air conditioning. In order to give effect to both provisions, see id., the Court reads the term "weather...