SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
230
CA 10-01922
PRESENT: CENTRA, J.P., FAHEY, LINDLEY, GREEN, AND MARTOCHE, JJ.
WILJEFF, LLC, PLAINTIFF-RESPONDENT,
V MEMORANDUM AND ORDER
UNITED REALTY MANAGEMENT CORP.,
DEFENDANT-APPELLANT.
(APPEAL NO. 2.)
KELLEY DRYE & WARREN LLP, NEW YORK CITY (JOSEPH A. BOYLE OF COUNSEL),
FOR DEFENDANT-APPELLANT.
HARRIS BEACH PLLC, PITTSFORD (DAVID J. EDWARDS OF COUNSEL), FOR
PLAINTIFF-RESPONDENT.
Appeal from a partial judgment of the Supreme Court, Monroe
County (Kenneth R. Fisher, J.), entered December 21, 2009 in a breach
of contract action. The partial judgment, among other things, awarded
plaintiff the sum of $156,001.20 against defendant.
It is hereby ORDERED that the judgment so appealed from is
unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action seeking, inter alia,
damages arising out of defendant’s breach of the Management Agreement
(Agreement) between the parties, pursuant to which defendant was to
manage a mixed-use complex (complex) owned by plaintiff. Plaintiff
terminated the Agreement after defendant allegedly failed to perform
its obligations thereunder, and defendant subsequently withdrew a
certain sum from a bank account owned by plaintiff as a termination
fee, alleging that it was entitled to such a fee because plaintiff had
terminated the Agreement without cause. Supreme Court denied
defendant’s motion to strike the complaint, granted plaintiff’s cross
motion for partial summary judgment on the second cause of action,
determining that plaintiff’s termination of the Agreement was for
cause, and entered judgment against defendant in the amount of the
termination fee that it improperly withdrew, plus interest and costs.
We affirm.
Addressing first the cross motion, we reject defendant’s
contention that the court erred in considering certain affidavits
submitted in support of the cross motion inasmuch as defendant was not
permitted to depose those affiants. “Although a [cross] motion for
summary judgment may be opposed on the ground ‘that facts essential to
justify opposition may exist but cannot then be stated’. . ., ‘the
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CA 10-01922
opposing party must make an evidentiary showing supporting [that]
conclusion, mere speculation or conjecture being insufficient’ ”
(Preferred Capital v PBK, Inc., 309 AD2d 1168, 1169; see Newman v
Regent Contr. Corp., 31 AD3d 1133, 1134-1135). Here, the record
establishes that three of the four disputed affiants testified with
respect to facts derived from documents within defendant’s possession,
and defendant thus failed to establish that the court should have
denied the cross motion or issued a continuance to permit disclosure
concerning those facts (see Croman v County of Oneida, 32 AD3d 1186;
see also Mancuso v Allergy Assoc. of Rochester, 70 AD3d 1499, 1501).
We further conclude that the court properly considered the affidavits
of plaintiff’s senior counsel submitted in support of the cross motion
inasmuch as he testified, inter alia, to his “intimate[ ]
familiar[ity]” with the issues central to the affidavits and this
case. Consequently, his affidavits “constitute sound evidentiary
proof with respect to the matters addressed therein” (Matter of
Jamaica Neighborhood Based Alliance Coalition v Department of Social
Servs. of State of N.Y., 227 AD2d 40, 43, appeal dismissed 89 NY2d
1085, lv denied 90 NY2d 808).
Contrary to defendant’s further contention, we conclude that
plaintiff met its initial burden of establishing, pursuant to the
terms of the Agreement, that there was a material breach of that
contract and thus that it was entitled to partial summary judgment
determining that its termination thereof was for cause. “As a general
rule, rescission of a contract is permitted for such a breach as
substantially defeats its purpose. It is not permitted for a slight,
casual[] or technical breach, but . . . only for such as are material
and willful, or, if not willful, so substantial and fundamental as to
strongly tend to defeat the object of the parties in making the
contract” (Lenel Sys. Intl., Inc. v Smith, 34 AD3d 1284, 1285
[internal quotation marks omitted]; see Callanan v Keeseville, Ausable
Chasm & Lake Champlain R.R. Co., 199 NY 268, 284). Generally, the
question whether a breach is material is for the finder of fact but,
“ ‘where the evidence concerning the materiality is clear and
substantially uncontradicted . . .[,] the question is a matter of law
for the court to decide’ ” (Syracuse Orthopedic Specialists, P.C. v
Hootnick, 42 AD3d 890, 892), and that is the case here. In support of
the cross motion, plaintiff submitted the affidavit of its certified
public accountant, who described gross mismanagement of the complex by
defendant, as well as the affidavit of a marketing director who had
performed work for plaintiff and indicated that defendant failed to
engage in the requisite marketing efforts.
In opposition to the cross motion, defendant did not contradict
those affidavits and instead attempted to establish that plaintiff was
not entitled to summary judgment because it had not stated in
sufficient detail the nature of the alleged breach. We conclude that
defendant failed to raise a triable issue of fact sufficient to defeat
the motion (see generally Zuckerman v City of New York, 49 NY2d 557,
562). Pursuant to the termination provisions of the Agreement, a
party terminating the Agreement must give notice to the other party
“specifying in detail a material breach [thereof] . . . .” The
Agreement does not define “in detail” and, inasmuch as there is no
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CA 10-01922
extrinsic evidence establishing the meaning of that phrase, we may
determine the question whether the notice letter provided sufficient
detail as a matter of law (see Village of Hamburg v American Ref-Fuel
Co. of Niagara, 284 AD2d 85, 88, lv denied 97 NY2d 603). Here, the
letter by which plaintiff notified defendant of the breach of the
Agreement alleged, inter alia, that defendant kept inaccurate tenant
and financial records, that defendant failed to provide timely,
complete and accurate financial and accounting information with
respect to the complex’s rent roll, accounts receivable and cash
reconciliation information and that defendant failed to provide timely
notice of delinquency to tenants and plaintiff. Defendant thereafter
offered a detailed response to those allegations. Thus, the error of
which defendant was provided notice was defendant’s general
ineptitude, rather than the specific consequences of its approach to
the management of the complex. Such notice was sufficient pursuant to
the terms of the Agreement. Indeed, the Agreement required that
plaintiff, as the party seeking to terminate the Agreement, specify in
detail a material breach, i.e., defendant’s pervasive incompetence,
rather than imposing upon plaintiff the heavier obligation of
particularizing each and every effect of the breach.
Contrary to defendant’s contention, the decision of the Court of
Appeals in Chinatown Apts. v Chu Cho Lam (51 NY2d 786) does not compel
a different determination. That case does not articulate a general
rule that effective notice of termination of any contract must always
contain a recitation of each and every specific provision of the
contract that allegedly has been violated. Further, there is no merit
to the contention of defendant that the court’s reference in its
written decision to “industry standards” requires reversal inasmuch as
that reference was a passing remark not essential to the decision (see
generally Edgreen v Learjet Corp., 180 AD2d 562).
We further conclude that the court did not abuse its discretion
in denying defendant’s motion to strike the complaint. “It is well
settled that ‘[t]rial courts have broad discretion in supervising
disclosure and, absent a clear abuse of that discretion, a trial
court’s exercise of such authority should not be disturbed’ ”
(Carpenter v Browning-Ferris Indus., 307 AD2d 713, 715). We have
“repeatedly held that the striking of a pleading is appropriate only
where there is a clear showing that the failure to comply with
discovery demands is willful, contumacious[] or in bad faith” (Perry v
Town of Geneva, 64 AD3d 1225, 1226 [internal quotation marks
omitted]). Once a moving party establishes that the failure to comply
with a disclosure order was willful, contumacious or in bad faith, the
burden shifts to the nonmoving party to offer a reasonable excuse (see
Hill v Oberoi, 13 AD3d 1095). Here, there is no merit to defendant’s
contention that plaintiff failed to disclose certain e-mails, and
plaintiff had a reasonable excuse for failing to produce certain
witnesses for deposition, given the location at which defendant
requested to depose those witnesses (see CPLR 3110 [1]).
Entered: March 25, 2011 Patricia L. Morgan
Clerk of the Court