Realty Law Digest
Scott Mollen discusses "Center for Specialty Care v. CSC Acquisition I," where it was held the court must recalculate the damages award for breach of lease and guaranty agreements, and "Eubanks v. Kinsler," where a landlord's refusal to sign city FHEPS forms constituted unlawful income discrimination.
September 15, 2020 at 12:31 PM
18 minute read
Scott Mollen
Contracts—Breach of Lease and Other Agreements, Including Personal Guarantees—Frustration of Purpose—Liquidated Damages
The defendants appealed from a trial court judgment in the plaintiffs' favor on liability, with respect to claims for breach of an asset purchase agreement (APA), an administrative services agreement (ASA), a lease agreement, and guaranty agreements. The trial court granted the plaintiffs' motion for summary judgment and denied the defendants' motion for summary judgment. The dispute arose from a failed sale of an ambulatory surgical center (CSC).
A plaintiff operated CSC. CSC was a tenant of a building owned by "A," an affiliated entity. CSC held a Certificate of Need (CON) from the NYS Dep't of Health (DOH). In 2014, the family that owned CSC and "A" decided to sell the business and lease the building to a buyer who would operate the medical facility. CSC accepted a bid from "B" for $5 million. The parties negotiated four separate agreements: the APA, lease, ASA and personal guarantees of the lease.
The overriding agreement was the APA. A $500,000 deposit was paid into escrow upon execution of the APA. The APA was to close on or before June 1, 2016. The APA embodied a "standard integration and no waiver clause." The parties agreed to take "such action as may reasonably be necessary or appropriate to achieve the purposes" of the APA.
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