| Seidman v Industrial Recycling Props., Inc. |
| 2013 NY Slip Op 03659 [106 AD3d 983] |
| May 22, 2013 |
| Appellate Division, Second Department |
| Sheldon Seidman, Respondent, v IndustrialRecycling Properties, Inc., Appellant, et al., Defendants. |
—[*1] Smith, Buss & Jacobs, LLP, Yonkers, N.Y. (Jennifer L. Stewart and Jeffrey D. Bussof counsel), for respondent.
In an action to foreclose a mortgage, the defendant Industrial Recycling Properties,Inc., appeals from so much of an order of the Supreme Court, Nassau County (Jaeger, J.),entered March 14, 2012, as denied those branches of its motion which were for summaryjudgment on the issue of liability and an award of damages on its counterclaim allegingbreach of contract.
Ordered that the order is modified, on the law, by deleting the provision thereofdenying that branch of the motion which was for summary judgment on the issue ofliability on the counterclaim alleging breach of contract, and substituting therefor aprovision granting that branch of the motion; as so modified, the order is affirmed insofaras appealed from, with costs to the appellant.
The plaintiff mortgagee commenced this foreclosure action alleging, inter alia, thatthe defendant mortgagor, Industrial Recycling Properties, Inc. (hereinafter Industrial),failed to maintain insurance on the subject property as required by the mortgage. In aprior appeal in this action, this Court reversed an order of the Supreme Court grantingthat branch of the plaintiff's motion which was for summary judgment on the issue ofliability as to Industrial (seeSeidman v Industrial Recycling Props., Inc., 52 AD3d 678 [2008]). However,while that appeal was pending, since the action was not stayed pending appeal, thereferee appointed by the Supreme Court sold the subject property pursuant to a judgmentof foreclosure and sale entered December 21, 2006.
Subsequently, Industrial moved, inter alia, for summary judgment dismissing thecomplaint insofar as asserted against it. The Supreme Court denied the motion, and thisCourt reversed, holding that the Supreme Court should have awarded Industrial summaryjudgment dismissing the complaint insofar as asserted against it, as "Industrial met itsinitial burden of establishing its entitlement to judgment as a matter of law by showingthat the plaintiff failed to comply with a condition precedent permitting the accelerationof the mortgage debt, namely, that two or more fire insurance companies lawfully doingbusiness in the State of New York refused coverage to the plaintiff upon his applicationfor fire insurance on the subject premises [and, in] response, the plaintiff failed to raise atriable issue of fact" (Seidman v Industrial Recycling Props., Inc., 71 AD3d[*2]1117, 1119 [2010] [citations omitted]).
In a decision and order dated April 26, 2011, this Court modified an order of theSupreme Court which, inter alia, denied that branch of a subsequent motion by Industrialwhich was for leave to amend its pleadings to assert a counterclaim alleging breach ofcontract, and granted that branch of Industrial's motion (see Seidman v Industrial RecyclingProps., Inc., 83 AD3d 1040 [2011]). Thereafter, Industrial amended itspleadings to assert a counterclaim alleging that the plaintiff breached the mortgagecontract by improperly accelerating the mortgage and commencing this foreclosureaction.
Subsequently, Industrial moved, inter alia, for summary judgment on the issue ofliability and an award of damages on that counterclaim. In the order appealed from, theSupreme Court denied that branch of Industrial's motion.
Industrial established, prima facie, its entitlement to judgment as a matter of law onthe issue of liability on its counterclaim alleging breach of contract by adducing evidencethat the plaintiff breached the mortgage contract by improperly accelerating the mortgageand commencing this foreclosure action (see Quilliams v Half Hollow Hills School Dist. [CandlewoodSchool], 67 AD3d 763 [2009]). In opposition, the plaintiff failed to raise atriable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562[1980]; Seidman v Industrial Recycling Props., Inc., 71 AD3d at 1119).Furthermore, contrary to the plaintiff's contention, the motion was not premature, as theplaintiff failed to demonstrate how discovery may reveal or lead to relevant evidence, orthat "facts essential to opposing the motion were exclusively within" another party's"knowledge and control" (Espada v City of New York, 74 AD3d 1276, 1277 [2010];see CPLR 3212 [f]; Norero v 99-105 Third Ave. Realty, LLC, 96 AD3d 727,728 [2012]; Haque vDaddazio, 84 AD3d 940 [2011]).
However, Industrial failed to demonstrate its prima facie entitlement to an award ofdamages in a specific amount. It has long been recognized that the theory underlyingdamages for breach of contract is to make good or replace the loss caused by the breach(see Brushton-Moira Cent. School Dist. v Thomas Assoc., 91 NY2d 256, 261[1998]; Reid v Terwilliger, 116 NY 530, 532 [1889]). Damages are intended toreturn the parties to the point at which the breach arose and to place the nonbreachingparty in as good a position as it would have been had the contract been performed (see Bi-Economy Mkt., Inc. vHarleysville Ins. Co. of N.Y., 10 NY3d 187, 195 [2008]; Goodstein Constr.Corp. v City of New York, 80 NY2d 366, 373 [1992]; Robert L. Haig, CommercialLitigation in New York State Courts, § 51:3 [c] at 31 [4 West's NY Prac Series1995]; Restatement [Second] of Contracts §§ 344, 347, Commenta). Thus, damages for breach of contract are ordinarily ascertained as of the date ofthe breach (see Rodriguez & Co. v Moore-McCormack Lines, 32 NY2d 425, 429[1973]; Simon v Electrospace Corp., 28 NY2d 136, 145 [1971]; Parker vHoppe, 257 NY 333, 341 [1931]). In this case, the record does not supportIndustrial's contention that awarding it the value of the subject property on the date of theforeclosure sale, plus interest, would place it in the position it would have been in had theplaintiff not improperly commenced this foreclosure action (see Bi-Economy Mkt.,Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d at 195).
Accordingly, Industrial was entitled only to summary judgment on the issue ofliability on its counterclaim to recover damages for breach of contract. Angiolillo, J.P.,Chambers, Hall and Roman, JJ., concur.