| WILJEFF, LLC v United Realty Mgt. Corp. |
| 2011 NY Slip Op 02178 [82 AD3d 1616] |
| March 25, 2011 |
| Appellate Division, Fourth Department |
| WILJEFF, LLC, Respondent, v United Realty ManagementCorp., Appellant. (Appeal No. 2.) |
—[*1] Harris Beach PLLC, Pittsford (David J. Edwards of counsel), forplaintiff-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 otherthings, awarded plaintiff the sum of $156,001.20 against defendant.
It is hereby ordered that the judgment so appealed from is unanimously affirmed withoutcosts.
Memorandum: Plaintiff commenced this action seeking, inter alia, damages arising out ofdefendant's breach of the management agreement (Agreement) between the parties, pursuant towhich defendant was to manage a mixed-use complex (complex) owned by plaintiff. Plaintiffterminated 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 atermination fee, alleging that it was entitled to such a fee because plaintiff had terminated theAgreement 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 judgmentagainst defendant in the amount of the termination fee that it improperly withdrew, plus interestand costs. We affirm.
Addressing first the cross motion, we reject defendant's contention that the court erred inconsidering certain affidavits submitted in support of the cross motion inasmuch as defendantwas not permitted to depose those affiants. "Although a [cross] motion for summary judgmentmay be opposed on the ground 'that facts essential to justify opposition may exist but cannot thenbe stated'. . . , 'the opposing party must make an evidentiary showing supporting[that] conclusion, mere speculation or conjecture being insufficient' " (Preferred Capital vPBK, Inc., 309 AD2d 1168, 1169 [2003]; see Newman v Regent Contr. Corp., 31 AD3d 1133, 1134-1135[2006]). Here, the record establishes that three of the four disputed affiants testified with respectto facts derived from documents within defendant's possession, and defendant thus failed toestablish that the court should have denied the cross motion or issued a continuance to permitdisclosure [*2]concerning those facts (see Croman v County of Oneida, 32AD3d 1186 [2006]; see alsoMancuso v Allergy Assoc. of Rochester, 70 AD3d 1499, 1501 [2010]). We furtherconclude that the court properly considered the affidavits of plaintiff's senior counsel submittedin 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 "constitutesound evidentiary proof with respect to the matters addressed therein" (Matter of JamaicaNeighborhood Based Alliance Coalition v Department of Social Servs. of State of N.Y., 227AD2d 40, 43 [1997], appeal dismissed 89 NY2d 1085 [1997], lv denied 90 NY2d808 [1997]).
Contrary to defendant's further contention, we conclude that plaintiff met its initial burden ofestablishing, pursuant to the terms of the Agreement, that there was a material breach of thatcontract and thus that it was entitled to partial summary judgment determining that itstermination thereof was for cause. "As a general rule, rescission of a contract is permitted forsuch a breach as substantially defeats its purpose. It is not permitted for a slight, casual[ ] ortechnical 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 thecontract" (Lenel Sys. Intl., Inc. vSmith, 34 AD3d 1284, 1285 [2006] [internal quotation marks omitted]; see Callananv Keeseville, Ausable Chasm & Lake Champlain R.R. Co., 199 NY 268, 284 [1910]).Generally, the question whether a breach is material is for the finder of fact but, " 'where theevidence 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 [2007]), and that is the case here. In support of the cross motion, plaintiff submitted theaffidavit of its certified public accountant, who described gross mismanagement of the complexby defendant, as well as the affidavit of a marketing director who had performed work forplaintiff 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 insteadattempted to establish that plaintiff was not entitled to summary judgment because it had notstated in sufficient detail the nature of the alleged breach. We conclude that defendant failed toraise a triable issue of fact sufficient to defeat the motion (see generally Zuckerman v City ofNew York, 49 NY2d 557, 562 [1980]). Pursuant to the termination provisions of theAgreement, a party terminating the Agreement must give notice to the other party "specifying indetail a material breach [thereof]." The Agreement does not define "in detail" and, inasmuch asthere is no extrinsic evidence establishing the meaning of that phrase, we may determine thequestion whether the notice letter provided sufficient detail as a matter of law (see Village ofHamburg v American Ref-Fuel Co. of Niagara, 284 AD2d 85, 88 [2001], lv denied97 NY2d 603 [2001]). Here, the letter by which plaintiff notified defendant of the breach of theAgreement alleged, inter alia, that defendant kept inaccurate tenant and financial records, thatdefendant failed to provide timely, complete and accurate financial and accounting informationwith respect to the complex's rent roll, accounts receivable and cash reconciliation informationand 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 whichdefendant was provided notice was defendant's general ineptitude, rather than thespecific consequences of its approach to the management of the complex. Such noticewas sufficient pursuant to the terms of the Agreement. Indeed, the Agreement required thatplaintiff, 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 ofparticularizing each and every effect of the breach.
Contrary to defendant's contention, the decision of the Court of Appeals in ChinatownApts. v Chu Cho Lam (51 NY2d 786 [1980]) does not compel a different determination.That case does not articulate a general rule that effective notice of termination of any contractmust always contain a recitation of each and every specific provision of the contract thatallegedly has been [*3]violated. Further, there is no merit to thecontention 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 [1992]).
We further conclude that the court did not abuse its discretion in denying defendant's motionto strike the complaint. "It is well settled that '[t]rial courts have broad discretion in supervisingdisclosure and, absent a clear abuse of that discretion, a trial court's exercise of such authorityshould not be disturbed' " (Carpenter v Browning-Ferris Indus., 307 AD2d 713, 715[2003]). We have "repeatedly held that the striking of a pleading is appropriate only where thereis a clear showing that the failure to comply with discovery demands is willful, contumacious[ ]or in bad faith" (Perry v Town ofGeneva, 64 AD3d 1225, 1226 [2009] [internal quotation marks omitted]). Once amoving 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 reasonableexcuse (see Hill v Oberoi, 13 AD3d1095 [2004]). Here, there is no merit to defendant's contention that plaintiff failed todisclose certain e-mails, and plaintiff had a reasonable excuse for failing to produce certainwitnesses for deposition, given the location at which defendant requested to depose thosewitnesses (see CPLR 3110 [1]). Present—Centra, J.P., Fahey, Lindley, Green andMartoche, JJ.