Freidus v. Eisenberg

Thompson, J.

(concurring in part and dissenting in part).

While I concur in the majority’s reduction of the jury award to the extent that it excluded the amount representing increased road construction costs because of a failure of proof on that issue, I do not share their view that the jury’s verdict as to use and occupancy of the property in issue must be vacated. *183In this protracted legal war, the major casualty has been Todem Homes, which had the right under an option contract to repurchase 17 acres of the 20-acre parcel in issue. During the pendency of this litigation—a period which exceeds 14 years—the plaintiff, Ella Freidus, has unreasonably and without apparent justification refused to perform in accordance with the terms of the option contract. The vacatur of the damages as to use and occupancy, as directed by the majority, flies in the face of the familiar maxim that equity will not suffer a wrong to be without a remedy. Equity will also not allow a wrongdoer to profit by her own misconduct. The majority’s decision with respect to the measure of compensation for the plaintiff’s delay in performance would work a manifest injustice by permitting the plaintiff to reap a substantial benefit simply because of the considerable difficulty involved in fairly evaluating the full extent of the harm Todem Homes suffered in this case and in making an accurate calculation of damages. I believe that the exercise of sound judicial discretion in granting the remedy of specific performance also permits this court to exercise a measure of flexibility in fashioning a remedy which will provide reasonably adequate compensation to the injured party. Accordingly, because I find that the evidence adduced at the trial was sufficient to support the theory of valuation advanced by Todem Homes, I dissent and vote to sustain the $408,000 awarded by the jury for the use and occupancy of the subject 17-acre parcel.

It is well settled that as an incident to a judgment of specific performance to a purchaser of property, a trial court may award damages for any direct and consequential loss suffered as a result of the seller’s delay in conveying the land in accordance with the terms of the contract of sale (see generally, Special or Consequential Damages Recoverable, on Account of Delay in Delivering Possession, by Purchaser of Real Property Awarded Specific Performance, Ann., 11 ALR4th 891 et seq.; 71 Am Jur 2d, Specific Performance, § 216 et seq.; cf. Check-Mate Indus. v Say Assoc., 104 AD2d 392; Mott v Devine, 102 AD2d 946; Margo Props. v Nelson, 99 AD2d 1029). Such an award does not arise as legal damages from the breach of the contract; rather, it is more in the nature of an equitable accounting between the parties in affirmance of the contract (see, 71 Am Jur 2d, Specific Performance, § 217, at 278-280; Specific performance: compensation or damages awarded purchaser for delay in conveyance of land, Ann., 7 ALR2d 1204, *184§ 1, at 1205-1207). Thus, in determining the standard for recovery of losses in such cases, courts will largely analogize to general principles relating to legal damages, although exercising a range of discretion not recognized in actions at law (see, Specific performance: compensation or damages awarded purchaser for delay in conveyance of land, Ann., 7 ALR2d 1204, §20, at 1233-1234). In this regard, the courts have a duty when granting specific performance to place the parties, insofar as possible, in the same position they would have been in had the contract been performed according to its terms (see, Worrall v Munn, 38 NY 137; Colonie Motors v Heritage Corp., 61 AD2d 1105, 1107; Bregman v Meehan, 125 Misc 2d 332, 338).

Pursuant to these principles, the majority correctly notes that because of the plaintiffs delay in conveying the property, the defendant is clearly entitled to an award for the value of the use and occupancy of the land, i.e., damages equal to the rental value of the real property (see, Haffey v Lynch, 193 NY 67, 70; Bostwick v Beach, 103 NY 414, 423; Worrall v Munn, supra, at pp 141-142). With respect to the subject premises, however, the defendant was faced with obvious difficulties, in the unusual circumstances of this case, in establishing the fair rental value of the property. The parcel in question was heavily wooded, hilly and ravine-like. Thus, the ordinary measure of damages using actual rental values of comparable parcels is not an accurate measure of the damages suffered by the defendant in being kept out of possession for these many years. However, in my considered opinion, the inappropriateness of this measure of damages does not preclude recovery by the defendant. Todem Homes was entitled to pursue other measures because our damage law is flexible enough to develop means to compensate those who have suffered an injury. The defendant attempted to demonstrate the dollar amount of damages for use and occupancy through its appraiser’s testimony that a fair rental value could be calculated by ascertaining the fair market value for each year that the plaintiff was in possession and applying to that amount the interest rate payable on governmental securities for that year. Thus, for the period from October 1976, when specific performance of the option contract was first ordered, until April 1985, when the trial on damages was held, the rental value was calculated at a total of $594,000. Furthermore, although my colleagues in the majority read the testimony of the plaintiffs expert differently, the plaintiffs expert essentially conceded that a fair *185rental value of the property could be determined by estimating the value of the land and taking a percentage of the value from various sources such as capitalization and interest rates.

Drawing on this expert testimony and recognizing equity’s interest in making an injured party whole, I can find no occasion to disturb the portion of the jury verdict awarding the defendant $408,000 for the plaintiffs use and occupancy of the land over an 8Vi-year period. The verdict was fairly based on evidence presented to the jury and has support in the expert testimony. More importantly, it fairly gives redress according to the circumstances of this particular case (see, Worrall v Munn, 38 NY 137, 142, supra).

Vacatur of the award rewards the plaintiff for her prolonged wrongful occupancy and unreasonable conduct in depriving the defendant of all use and enjoyment of the premises. During the 8Vi-year period of the plaintiffs delay in conveying the property, the value of her three-acre parcel was greatly enhanced because she was thereby provided with a 17-acre zone of privacy. The majority’s rigid adherence to an inflexible valuation approach permits the plaintiff to use a traditional approach developed in the law of damages as a sword for injustice rather than as a shield from improper or speculative valuation.

Although the decisional law of this State provides no direct authority for the theory of valuation evident at bar, we may draw support from the decision of the Court of Appeals in the case of Matter of Merrick Holding Corp. v Board of Assessors (45 NY2d 538) which, in the context of a tax certiorari proceeding, emphasized the importance of flexibility in valuation determinations and advised that a rigid, inflexible valuation approach would not be tolerated to benefit an individual taxpayer at the expense of the community of taxpayers. Similarly, in the context of a condemnation case it has been held that "[t]here is no fixed formula for computing the rental value of condemned lands any more than such a standard exists to point out the value of the fee of condemned property” (Matter of City of New York [Rego Park Houses], 201 Misc 126, 127 [holding that for the city’s temporary interest in the condemned lands the only competent evidence was that the condemned lands would have returned 4% of the value of the land]; see also, Village of Highland Falls v State of New York, 44 NY2d 505 [rental value computed at 10% of the fair market value of property upon which the State had taken a temporary easement]; cf. Sanders v Detlaff, 218 Mich 471, 188 *186NW 446 [6% on full purchase price of property calculated as fair rental value of such property and awarded as compensation to the purchaser for the delay in delivery of possession of such property]).

In sum, the discretion of the court permits flexibility in calculating damages sufficient to adequately compensate an injured party and to prevent a wrongdoer from profiting from his wrongful conduct. The use and occupancy award at issue should be upheld as reasonably calculated to redress the harm wrought by this interminable litigation. We will also thereby advance the interest of justice in discouraging practices like those evident in the record before us. Accordingly, for the reasons above stated, I concur in the majority opinion except as to the vacatur of the jury verdict awarding damages for use and occupancy of the subject parcel.

Rubin and Lawrence, JJ., concur with Lazer, J. P.; Thompson, J., concurs to dismiss the appeal from the order dated November 7, 1985, which denied the plaintiff’s motion for a permanent injunction prohibiting enforcement of the judgment, and to affirm the order dated November 7, 1985, which denied Gerald Resnick’s motion for leave to intervene, but otherwise dissents, and votes to modify the judgment only by (1) deleting so much of the second decretal paragraph as provides for treating interest on the purchase price as an adjustment at closing, (2) deleting from the third decretal paragraph thereof the words "the sum of Four Hundred Seventy-Three Thousand Ninety-Six ($473,096) Dollars so found by the jury, together with the sum of Five Thousand Fifty Three and 55/ioo ($5,053.55) Dollars liability for which was conceded by plaintiff, and the sum of $(364.60) Dollars, costs and disbursement [sic] as taxed, amounting in all to the sum of Four Hundred Seventy Eight Thousand, Five-hundred-fourteen and lsAoo ($478,514.15) Dollars”, and substituting therefor the words "the sum of Four Hundred Eight Thousand ($408,000) Dollars, together with the sum of Five Thousand Fifty-Three and ssAoo ($5,053.55) Dollars, liability for which was conceded by the plaintiff, and the sum of Three-Hundred Sixty-Four and 60Aoo ($364.60) Dollars, costs and disbursements as taxed, amounting in all to the sum of Four-Hundred Thirteen Thousand, Four-Hundred Eighteen and iyioo $413,418.15) Dollars”, and (3) severing the defendant’s claim for an offset for interest on the unpaid purchase price of the subject property, and granting a new trial on said claim, and, as so *187modified, to affirm the judgment, with an opinion, in which Eiber, J., concurs.

Ordered that the plaintiffs appeal from the order dated November 7, 1985, which denied the plaintiff’s motion for a permanent injunction prohibiting enforcement of the judgment is dismissed, without costs or disbursements, as academic; and it is further,

Ordered that the judgment is modified, by (1) deleting so much of the second decretal paragraph as provides for treating interest on the purchase price as an adjustment at closing, (2) deleting from the third decretal paragraph thereof the words "the sum of Four Hundred Seventy-Three Thousand Ninety-Six ($473,096) Dollars so found by the jury, together with the sum of Five Thousand Fifty Three and 5yioo ($5,053.55) Dollars liability for which was conceded by plaintiff, and the sum of $(364.60) Dollars, costs and disbursement [sic] as taxed, amounting in all to the sum of Four Hundred Seventy Eight Thousand Five-hundred-fourteen and 15Aoo ($478,514.15) Dollars”, and substituting therefor the words: "the sum of Five Thousand Fifty-Three and syioo ($5,053.55) Dollars, liability for which was conceded by the plaintiff, and the sum of Three-Hundred Sixty-Four and 60Aoo ($364.60) Dollars, costs and disbursements as taxed, amounting in all to the sum of Five Thousand, Four-Hundred Eighteen and 15Aoo ($5,418.15) Dollars”, and (3) severing the defendant’s claim for an offset for interest on the unpaid purchase price of the subject property, and granting a new trial on said claim. As so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements; and it is further,

Ordered that the order dated November 7, 1985, which denied Gerald Resnick’s motion, inter alia, for leave to intervene, is affirmed, without costs or disbursements, and without prejudice to the bringing of a plenary action.