Vidas Cousins Realty Corp. v PB & J Assoc., Inc.Annotate this Case
Decided on April 1, 2013
District Court of Nassau County, First District
Vidas Cousins Realty Corporation, Petitioner(s)
PB & J Associates, Inc., Respondent(s)
Law Office of Edwards & Edwards, Attorneys for Petitioner, 336 South Ocean Avenue, Freeport, New York 11520, 516-379-1323; Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger, LLP, Attorneys for Respondent, 1111 Marcus Avenue, Lake Success, New York 11040, 516-592-6757.
Scott Fairgrieve, J.
In its decision dated July 14, 2010, the Court held that Petitioner, Vidas Cousins Realty Corporation, breached its contractual responsibility to make structural repairs and or replace the roof of the premises located at 103 Woodcleft Avenue, Freeport which Respondent, PB & J Associates, Inc., operated as a restaurant/bar. The evidence demonstrates that Respondent stopped operating its business on or about November 28, 2007 due to the leaks. The Petitioner commenced repairs/replacement of the roof which was completed on March 28, 2008.
This Court concluded that the Respondent was not constructively evicted as outlined in said decision. It exercised domain, possession, and control of the premises until December 2009, when it surrendered the keys.
What damages are recoverable by the Respondent and what period of time will be considered in determining the amount of damages?
This action is presently before the Court to determine the issue of damages. Both parties presented their respective positions during oral argument which took place on February 28, 2013.
Petitioner asserted that Respondent could only recover damages for the period from November 28, 2007 to March 28, 2008 when the roof replacement was finished. Respondent [*2]countered that the failure of Petitioner to repair or replace the roof caused it to cease doing business permanently. Thus, Respondent argued it is entitled to all provable damages without restriction as to time.
Discussion of Law
The Court of Appeals provided the basis for damages for failure to repairin Thomson-Houston Electric Co. v. Durant Land Improvement Co., 144 NY 34 (1894).The court stated:
But in the ordinary case of a lease of a building to be used for any purpose at the discretion of the lessee, and there has been a breach by the lessor of a covenant to repair, the rule which measures the damages by the difference in general rental value, is usually compensatory, and, in most cases, best satisfies the demand of justice. If in all cases it does not afford full compensation, it eliminates an element of speculation and uncertainty which, if permitted to be considered, would often lead to great injustice. The cases of Myers v. Burns (35 NY 269), and Hexter v. Knox (63 Id. 561) were cases of leases for hotel purposes, and for a breach by the landlord of a covenant to repair the tenant was allowed to recover the value of the use of certain rooms in the hotel for hotel purposes during the time they were rendered untenantable because of the failure to perform the covenant. These cases fall within a well-defined class, which permits a recovery on a breach of contract damages which it may be found were contemplated by the parties when the contract was made, as a consequence of the breach of the covenant.
Id. at 47.
In Goldstein v. 104 Second Ave. Realty Corp., 194 Misc 1 (Civ Ct New York County 1949), the court did an extensive analysis of damages recoverable for breach by a commercial landlord's covenant to repair contained in a written lease. The court allowed for recovery of loss of profits because:
While earlier decisions generally excluded lost profits as an element of recoverable damages in both actions for breach of contract and tort, under modern practice the right to recover profits is now generally determined by the same rules as govern the recovery of other damages. It may therefore be said that lost profits are recoverable in cases involving breach of contract, when they may reasonably be supposed to have been within the contemplation of the parties when the contract was made, as the probable result of its violation, and where such profits are shown with a reasonable degree of certainty (citations omitted).
Id. at 4.
The Hon Robert F Dolan asserts that loss of profits are recoverable provided the damages are certain in their nature and also flow from the breach of the covenant to repair. See 2 Dolan, [*3]Rasch's Landlord and Tenant-Summary Proceedings § 18:34, at 58 (4th ed). Said section states in pertinent part: But, if these objections to a recovery of profits, as part of the damages sustained, can be overcome by an injured party, there is no reason why he cannot recover as part of his damages "gains prevented as well as losses sustained." The law aims at complete compensation for the injury sustained. Therefore, a tenant can recover all of his damages resulting from a breach of covenant to repair, including gains prevented as well as losses sustained, if he can show that they were fairly within the contemplation of the parties to the lease; that is, they are such as might naturally be expected to follow the breach; and, that they are certain, not only in their nature but also as respects the cause from which they proceed. If, however, the tenant cannot comply with these conditions, he can only recover his general damages measured by a diminution of the rental value as a result of the breach of covenant to repair. For, the law wisely adopts that mode of estimating damages which is most definite and certain.
The damages which a tenant may recover for the breach of a covenant to repair are also discussed in 74 NY Jur 2d Landlord and Tenant § 186 which sets forth the following:
Ordinarily, the general damages recoverable for a breach of a landlord's covenant to repair are measured by the diminution in the rental value of the demised premises resulting from the failure to repair. Thus, the measure of damages for breach of contract to repair, when repairs are necessitated by the destruction in whole or in part of the leased premises by fire or other casualty, is the difference between the rental value of the premises partially destroyed and the rental value had the premises been restored.
* * *
Economic injury may be recoverable as an item of consequential damage if a landlord breaches his or her covenant to repair. The tenant may also be entitled to recover special damages which result from the breach of the covenant to repair, and which are proximate in effect, are not speculative or uncertain in character, and either were fairly within the contemplation of the parties when the lease was made, or might have been foreseen as a consequence of a breach of its covenants. Provided these conditions are met, loss of profits may be recoverable.
Based upon the foregoing, PB & J Associates, Inc., can recover damages for Vidas Cousins Realty Corporation's breach of its covenant to repair the roof. Respondent is entitled to recover the diminution of the rental value for the period of November 28, 2007 until March 28, 2008.
Additionally, Respondent can recover for loss of profits because such damages were fairly within the contemplation of the parties. The loss of profits, if any, naturally flows from Petitioner's breach of the covenant to repair. Petitioner knew or had reason to know that its failure to repair or replace the leaking roof could and did, in fact, cause the Respondent to close its business resulting in possible loss of profits. These damages are also restricted to the period of November 28, 2007 until March 28, 2008.
Loss of profits, if any, recoverable by Respondent must be demonstrated with certainty that such damages were caused by Petitioner's failure to comply with the covenant to repair and must be capable of proof with reasonable certainty. Of course, damages recovered must not be duplicative.
/s/ Hon. Scott Fairgrieve
DISTRICT COURT JUDGE
Dated:April 1, 2013
cc:Law Offices of Edwards & Edwards, Esqs.
Abrams, Fensterman, Fensterman, Eisman,
Greenberg, Formato & Einiger, LLP