| Deer Park Enters., LLC v Ail Sys., Inc. |
| 2008 NY Slip Op 09945 [57 AD3d 711] |
| December 16, 2008 |
| Appellate Division, Second Department |
| Deer Park Enterprises, LLC, Respondent, v Ail Systems, Inc.,Now Known as EDO Corporation, Appellant. |
—[*1] Farrell Fritz, P.C., Uniondale, N.Y. (James M. Wicks and Aaron E. Zerykier of counsel), forrespondent.
In an action, inter alia, to recover damages for breach of contract, the defendant appeals from anorder of the Supreme Court, Nassau County (Warshawsky, J.), entered June 8, 2007, which denied itsmotion to dismiss the fourth and fifth causes of action of the amended complaint.
Ordered that the order is modified, on the law, by deleting the provision thereof denying thatbranch of the defendant's motion which was to dismiss the fourth cause of action, and substitutingtherefor a provision granting that branch of the motion; as so modified, the order is affirmed, withoutcosts or disbursements.
We agree with the defendant's contention that the Supreme Court erred in denying that branch ofits motion which was pursuant to CPLR 3211 (a) (1) and (7) to dismiss the fourth cause of action of theamended complaint. That cause of action alleged that the defendant breached an implied covenant ofgood faith and fair dealing. A cause of action to recover damages for breach of the implied covenant ofgood faith and fair dealing cannot be maintained where the alleged breach is "intrinsically tied to thedamages allegedly resulting from a breach of the contract" (Canstar v Jones Constr. Co., 212AD2d 452, 453 [1995]; see HawthorneGroup v RRE Ventures, 7 AD3d 320, 323 [2004]). Here, the conduct and resulting injuryalleged in the fourth cause of action are identical to those alleged in the first two causes of actionalleging breach of contract. Therefore, the fourth cause of action should have been dismissed asduplicative of the breach of contract causes of action (see R.I. Is. [*2]House, LLC v North Town PhaseII Houses, Inc., 51 AD3d 890, 896 [2008]; TAG 380, LLC v ComMet 380, Inc., 40 AD3d 1, 8 [2007]).
However, contrary to the defendant's contention, the Supreme Court properly denied that branchof its motion which was to dismiss the fifth cause of action of the amended complaint. In essence, thatcause of action alleged that, in breach of a purchase agreement and an attendant lease the partiesexecuted, the defendant failed to timely mitigate certain environmental issues at the real property whichwas the subject of the agreements. The plaintiff alleged that as a result, it was hindered in itsdevelopment plans for the property. The defendant moved to dismiss this cause of action on the groundthat it was barred by what it contends was a liquidated damages provision in the parties' lease, whichprovided that if the defendant failed to comply with its environmental obligations prior to the date itsurrendered the premises, it remained liable for rent until it did so.
A liquidated damages clause must "clearly and unambiguously" set forth "the amount ofcompensation the parties agreed 'should be paid in order to satisfy any loss or injury flowing from abreach of [the parties'] contract' " (Federal Realty Ltd. Partnership v Choices Women's Med. Ctr.,289 AD2d 439, 441 [2001], quoting Truck Rent-A-Ctr. v Puritan Farms 2nd, 41 NY2d420, 423-424 [1977]). Here, the provision the defendant relies upon simply provides, in relevant part,that "if [the] Tenant shall fail to obtain Material Closure of [its] Environmental Obligations prior to theSurrender date, then [it] shall pay to Landlord the Rent until such Material Closure is achieved." Thereis no indication that the language the parties chose for this provision was intended as an estimate of the"extent of the injury that would be sustained" (Federal Realty Ltd. Partnership v Choices Women'sMed. Ctr., 289 AD2d 439, 441 [2001]), in the event of the defendant's breach of itsenvironmental obligations, and certainly no indication that payment of the rent, by itself, would "satisfyany loss or injury flowing from [the] breach" of those obligations (Truck Rent-A-Ctr. v PuritanFarms 2nd, 41 NY2d at 423-424; see Federal Realty Ltd. Partnership v Choices Women'sMed. Ctr., 289 AD2d at 441-442). In fact, other provisions of the lease provide that the specificremedies provided therein shall not "be deemed to limit or preclude the recovery by Landlord fromTenant of the maximum amount allowed to be obtained as damages by any statute or rule of law," andthat "[t]he right to invoke [certain enumerated] remedies . . . are cumulative [sic]and shall not preclude Landlord from invoking any other remedy allowed at law or in equity."
As to the general proposition, also cited by the defendant, that "[i]n an action by a landlord forbreach by the tenant of a lease, the amount of the damage, prima facie, is the rent reserved" (TovKnitting Mills v Starr Realty Co., 148 AD2d 526, 527 [1989]), "this proposition contemplatescircumstances in which the tenant did not remain in occupancy for the entire term of the lease"(Lager Assoc. v City of New York, 304 AD2d 718, 721 [2003]). It is not applicable where,as here, the damages alleged flow not from a shortfall in the occupancy, but rather from the tenant'salleged failure to timely complete its environmental cleanup obligations under the parties' lease.
The parties' remaining contentions either are without merit or are academic in light of ourdetermination. Rivera, J.P., Lifson, Miller and Eng, JJ., concur.