Stendig, Inc. v. Thom Rock Realty Co.

Decision Date03 July 1990
Citation558 N.Y.S.2d 917,163 A.D.2d 46
PartiesSTENDIG, INC., Plaintiff-Appellant, v. THOM ROCK REALTY COMPANY, et al., Defendants-Respondents.
CourtNew York Supreme Court — Appellate Division

J.M. Gottesman, New York City, for plaintiff-appellant.

J.D. Siegfried, New York City, for defendants-respondents.



Order of the Supreme Court, New York County (Shirley Fingerhood, J.), entered January 27, 1989, which granted defendants' motion to dismiss the amended complaint for failure to state a cause of action (CPLR 3211[a][7], unanimously modified, on the law, to the extent of reinstating plaintiff's first cause of action for breach of contract as against defendants Thom Rock Realty Company, Skillrock Realty Company and Harvey Schulweis and, except as so modified, affirmed, without costs.

Plaintiff brought this action seeking to recover damages for breach of a lease agreement, fraudulent misrepresentation and interference with contractual relations against the landlord, Thom Rock Realty Company, its leasing agent, The International Design Center, Inc. ("IDC"), its general partners, Skillrock Realty Company and Harvey Schulweis, Lazard Development Company which oversees construction at the premises and Lazard's sole shareholder, Lazard Realty Inc. The first cause of action was dismissed as to IDC and Lazard Development Company on a prior motion. The order appealed from dismissed the balance of the amended complaint.

Irrespective of the various theories advanced in the complaint, this is a straightforward action for breach of contract which concerns the landlord's right to enforce a condition set forth within the lease agreement. A contract action cannot be transformed into something more merely by employing the language of tort (SSDW Co. v. Feldman-Misthopoulos Assocs., 151 A.D.2d 293, 295, 542 N.Y.S.2d 565), and an assessment of the merits of the action is not furthered by the introduction of extraneous theories and unnecessary defendants.

The lease at issue, dated March 2, 1984, is for showroom space at the International Design Center, located in Long Island City, Queens County, and is for a term commencing nominally on July 1, 1985 and ending on June 30, 2010. However, the commencement date is conditioned upon the substantial completion of certain construction by the landlord, and there does not appear to be any dispute that, at all times relevant to this proceeding, this condition had not been fulfilled. Also contained in the lease is a termination clause, designated as Article 51, which provides that, at any time after December 31, 1984 until such time as the landlord shall give the tenant notice that leases for an aggregate of at least 250,000 square feet of space have been signed, either party may elect to terminate the lease, rendering all terms and conditions thereof null and void.

Plaintiff avers that, due to concerns regarding projected construction costs, it advised the landlord in a letter dated May 2, 1985 that it would be compelled to withdraw from the lease unless these concerns were adequately addressed. Shortly thereafter, plaintiff began negotiating for other showroom space on 58th Street in Manhattan. The landlord learned of these negotiations, and a meeting was held on or about July 2, 1985 at which, plaintiff alleges, Harvey Schulweis made certain misrepresentations regarding modifications to the lease agreement which were intended to, and did in fact, cause plaintiff to break off its negotiations for the other showroom space. Thereafter, on September 11, 1985, Thom Rock Realty elected to terminate the lease pursuant to the minimum leasing provision of Article 51.

Plaintiff alleges that, due to its reliance on the promises made by Schulweis and the detriment incurred by its abandonment of negotiations for another lease, the exercise of the termination provision by the landlord constitutes a breach of contract. Plaintiff further alleges that the representations made by Schulweis were fraudulent. On this appeal, plaintiff does not, however, pursue its claim that defendants' conduct constitutes an intentional interference with contractual relations and, indeed, it is apparent that no contract, the existence of which is essential to maintenance of that cause of action, was ever consummated for other showroom space (see, Israel v. Wood Dolson Co., 1 N.Y.2d 116, 120, 151 N.Y.S.2d 1, 134 N.E.2d 97).

Supreme Court dismissed the first cause of action for breach of contract relying on VTR v. Goodyear Tire & Rubber Co., 303 F.Supp. 773, 778 which states: "As to acts and conduct authorized by the express provisions of the contract, no covenant of good faith and fair dealing can be implied which forbids such act and conduct. And if defendants were given the right to do what they did by the express provisions of the contract there can be no breach." Unfortunately, the...

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