L'Oreal USA, Inc. v PM Hotel Assoc., L.P.
Annotate this CaseDecided on March 13, 2006
Civil Court of the City of New York, New York County
L'Oreal USA, Inc., Plaintiff,
against
PM Hotel Associates, L.P., Defendant.
56315CV2005
Anil C. Singh, J.
Defendant moves to dismiss plaintiff's complaint, alleging that plaintiff has failed to establish a cause of action. For the following reasons, we agree that plaintiff's action must be dismissed.
Plaintiff, L'Oreal USA, Inc. is a manufacturer of hair care and beauty products. Defendant, PM Hotel Associates, L.P. owns and operates Le Parker Meridien, a hotel in Manhattan.
On December 2, 2002, the parties entered into a written agreement, whereby plaintiff booked a block of hotel rooms for a sales conference for out-of-town employees at defendant's hotel for the period from February 18-20, 2003. Pursuant to the agreement, plaintiff paid defendant a deposit of $25,000.
On February 7, 2003, the federal government raised the Homeland Advisory System threat level from yellow (elevated) to orange (high). In response to the federal government's action, the plaintiff unilaterally cancelled its sales conference and advised defendant that it would not use the reserved hotel rooms.
On November 28, 2005, plaintiff filed suit against defendant, seeking a refund of the $25,000 deposit.
In its motion to dismiss, defendant contends that: 1) plaintiff's deposit was non-refundable under the express terms of the agreement; and, 2) the mere threat of a terrorist attack [*2]cannot relieve a party of its contractual obligations. We agree with defendant's contentions.
On its face, the contract states that plaintiff's deposit is non-refundable. As a matter of fact, the contract states this not once, but twice.
In a paragraph under the heading "CREDIT AND PAYMENT," the contract states in pertinent part:
To confirm function space and guest room accommodations on a definitive basis, please complete the enclosed credit application and submit a deposit in the amount of $25,000.00 on or before December 20, 2002. This deposit is non-refundable and non-transferable, represents approximately 50% of estimated contract revenue and will be applied to your master account.
(Motion to Dismiss, Exhibit "B")(emphasis added).
The contract also contains a cancellation provision, which states:
As stated in the "Credit & Payment" clause, your advance deposit is non-refundable and non-transferable. Additional cancellation charges will be necessary as outlined below in the event your function cancels within:
3 months prior to event 50% of estimated contract revenue
2 months prior to event 75% of estimated contract revenue
30 days or less 100% of estimated contract revenue.
(Motion to Dismiss, Exhibit "B")(emphasis added).
In light of the unambiguous language quoted above, there is absolutely no question that plaintiff agreed to forfeit the $25,000 deposit where, as here, it chose to back out of the agreement.
Plaintiff's complaint must be dismissed for an additional reason namely, the reluctance of plaintiff's employees to come to New York City is not a basis to cancel a contract without incurring the penalties therein contracted for. In this regard, the case of Uzan v. 845 UN Limited Partnership, 10 AD3d 230 (1st Dept, 2004) is instructive.
In Uzan, the Court found that a party's subjective fear of a terrorist attack did not constitute a legally cognizable excuse for nonperformance of contractual obligations. In short, we believe that similar logic applies to the instant action.
There is no suggestion that travel to New York City was impossible or even counseled against by public authorities; the citizens were warned to be alert, not absent. The hotel remained open for business, and the federal government's action neither prevented nor hindered plaintiff's employees from traveling to New York to attend the conference at the hotel on the dates in question.
Finally, it is important to note that the contract does not contain a force majeure clause listing, for example, a "heightened threat of terrorism" as an excuse for nonperformance.
Force majeure contract clauses excuse nonperformance when circumstances beyond the control of the parties prevent performance. Macalloy Corporation v. Metallurg, Inc., 284 AD2d 227, 227, 728 N.Y.S.2d 14, 14 (1st Dep't 2001).
Theoretically, the parties could have included such a clause in their agreement. However, they chose not to do so, and it is not the function of this Court to re-write the parties' agreement. Therefore, the Court cannot excuse plaintiff's nonperformance, and plaintiff clearly has no right to a refund of its deposit under the present circumstances. [*3]
The complaint is dismissed.
The foregoing constitutes the decision and order of the court.
Date: March 13, 2006______________________________
New York, New YorkAnil C. Singh
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