VII MP Miami Hotel Owner, LLC v. Hycroft, LLC

• Decision Date: 16 June 2022
• Docket Number: s. 16150,16150A,Index No. 161615/19,Case Nos. 2021-02772,2021-04692
• Citation: 2022 NY Slip Op 03983
• Parties: VII MP Miami Hotel Owner, LLC Doing Business as Four Seasons Hotel Miami, Plaintiff-Respondent, v. Hycroft, LLC, Doing Business as Hycroft Advisors, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

2022 NY Slip Op 03983

VII MP Miami Hotel Owner, LLC Doing Business as Four Seasons Hotel Miami, Plaintiff-Respondent, v. Hycroft, LLC, Doing Business as Hycroft Advisors, Defendant-Appellant.

Appeal Nos. 16150, 16150A, Index No. 161615/19, Case Nos. 2021-02772, 2021-04692

Supreme Court of New York, First Department

June 16, 2022

Woods Lonergan PLLC, New York (Andreas E. Christou of counsel), for appellant.

Before: Renwick, J.P., Manzanet-Daniels, Kern, Mazzarelli Shulman, JJ.

Judgment Supreme Court, New York County (Melissa A. Crane, J.) entered October 27, 2021, in plaintiff's favor and against defendant, unanimously affirmed, without costs. Appeal from order, same court, and Justice, entered March 30 2021, which granted plaintiff's motion for summary judgment, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

In March 2017, the parties entered into an agreement regarding arrangements for defendant's private equity conference from January 28, 2018 to February 1, 2018 at plaintiff's Four Seasons Hotel in Miami, Florida. The agreement involved reservation of 350 hotel nights, rental of conference facilities and the purchase of food and beverages. The agreement also provided for a cancellation fee as liquidated damages, which increased as the event got closer in time. Plaintiff commenced this action seeking to enforce the liquidated damages clause of the parties' contract for defendant's last-minute cancellation of the event on January 15, 2018.

Defendant failed to establish that the liquidated damages provision in its agreement with plaintiff was an unenforceable penalty. The burden is on the party seeking to avoid liquidated damages to show "either that damages flowing from a prospective [breach] were readily ascertainable at the time [the parties] entered into their [purchase] agreement, or that the [liquidated damages clause] is conspicuously disproportionate to these foreseeable losses" (JMD Holding Corp. v Congress Fin. Corp., 4 N.Y.3d 373, 380 [2005]; see also Bates Adv. USA, Inc. v 498 Seventh, LLC, 7 N.Y.3d 115, 120 [2006]).

Defendants failed to submit any evidence to establish either that actual damages were readily ascertainable at the time the purchase agreement was entered into, or that the liquidated damages were conspicuously disproportionate to foreseeable or probable losses. On the contrary, the parties acknowledged in the agreement that it was...