St. Lawrence v. Ogdensburg Bridge and Port Auth.

• Decision Date: 20 October 2009
• Docket Number: No. 132.,132.
• Citation: St. Lawrence v. Ogdensburg Bridge and Port Auth., 13 N.Y.3d 204, 918 N.E.2d 124, 2009 NY Slip Op 7454 (N.Y. 2009)
• Parties: ST. LAWRENCE FACTORY STORES, Appellant, v. OGDENSBURG BRIDGE AND PORT AUTHORITY, Respondent.
• Court: New York Court of Appeals Court of Appeals

13 N.Y.3d 204

918 N.E.2d 124

2009 NY Slip Op 7454

ST. LAWRENCE FACTORY STORES, Appellant, v. OGDENSBURG BRIDGE AND PORT AUTHORITY, Respondent.

No. 132.

Court of Appeals of New York.

Argued September 15, 2009.

Decided October 20, 2009.

Anderson & Buran PC, Burlington, Vermont (David C. Buran of counsel), for appellant.

Harter Secrest & Emery LLP, Rochester (A. Paul Britton of counsel), for respondent.

OPINION OF THE COURT

SMITH, J.

In this breach of contract case, we hold that plaintiff is entitled to recover the expenses, if any, that it reasonably incurred in preparing to perform the contract.

Defendant agreed to sell, and plaintiff to buy, approximately 12 acres of land, on which plaintiff intended to build a shopping center. Supreme Court found that defendant breached the contract by failing to close, and defendant does not now challenge that finding.

Plaintiff sought damages in three categories: lost profits (money it claims it would have made if the shopping center had been built); the "benefit of its bargain" (the alleged difference between the agreed-upon price of the property and its market value); and reliance damages (money allegedly spent in preparing for performance including, among other things, efforts to arrange financing and obtain tenants for the shopping center). Supreme Court dismissed the claims for lost profits and reliance damages before trial, and the Appellate Division affirmed (St. Lawrence Factory Stores v Ogdensburg Bridge & Port Auth., 26 AD3d 700 [3d Dept 2006]). Plaintiff's benefit of bargain claim was rejected at trial, and the Appellate Division again affirmed (St. Lawrence Factory Stores v Ogdensburg Bridge & Port Auth., 49 AD3d 1069 [3d Dept 2008]). We granted leave to appeal from the Appellate Division's 2008 order, bringing up for review also its 2006 order (11 NY3d 712 [2009]).

As to the lost profits and benefit of bargain claims, we affirm the rulings below. The lost profits claim was speculative, and the record supports the findings of the lower courts that the market value of the property at the time of the aborted closing did not exceed the contract price.

However, the dismissal before trial of plaintiff's claim for reliance damages was error. The Appellate Division held that, under "a contract for the sale of land requiring plaintiff to tender defendant the sale price upon closing," reliance damages are limited to "only those ordinarily incurred regarding such a contract, such as a title search, survey and attorney's closing fees" (St. Lawrence Factory Stores v Ogdensburg Bridge & Port Auth., 26 AD3d at 702). This is incorrect. In land transactions, as in other contracts, the rule is the one...