Opinion
No. 35.
Argued February 10, 2010.
Decided March 30, 2010.
APPEAL, by permission of the Court of Appeals, from a judgment of the Supreme Court, New York County (Charles Edward Ramos, J.), entered February 10, 2009. The Supreme Court granted summary judgment to defendant Kinko's, Inc. on its breach of contract counterclaim against plaintiff Inspire Someone, LLC, awarding defendant damages in the stipulated sum of $210,493. The appeal brings up for review a prior nonfinal order of the Appellate Division of the Supreme Court in the First Judicial Department, entered April 19, 2007. The Appellate Division modified, on the law, an order of that Supreme Court (op 2002 NY Slip Op 30025 [U]), which had granted a motion by defendants for summary judgment to the extent of dismissing plaintiffs' claims for fraud and lost profits damages. The modification consisted of dismissing the complaint in its entirety.
Defendant Kinko's, Inc. and plaintiff Awards.com, LLC, a company involved in direct and Web site marketing, agreed on a proposal that would allow plaintiff to launch a new "store-in-store" business selling personalized corporate awards and promotional items within defendant's locations. On April 30, 2002 defendant and plaintiff Inspire Someone, LLC, a wholly owned subsidiary of Awards.com formed for this purpose, entered into an agreement whereby defendant agreed to license the use of its store space to the subsidiary to sell its products within mutually selected locations of defendant at a certain monthly rate per square foot. The agreement did not require defendant to invoice the monthly fee each month. The agreement contained a no-waiver clause which provided in part that "[t]he failure of either Party to enforce any provision of this Agreement shall in no way be construed to be a waiver of such provision, nor in any way to affect the right of either Party to enforce each and every provision of this Agreement thereafter." Plaintiff began to fall behind in its monthly payments and defendant terminated the agreement. Prior to the termination, plaintiffs were the subject of a possible acquisition by defendant or a third party. Following the termination of the agreement, plaintiff commenced the present action alleging fraud, conspiracy to commit fraud, negligent misrepresentation, tortious interference, unjust enrichment, breach of contract, and misappropriation of trade secrets. Defendant answered and counter-claimed for breach of contract.
Awards.com, LLC v Kinko's, Inc., 42 AD3d 178, affirmed.
Chadbourne Parke, LLP, New York City ( Alan I. Raylesberg, George Bundy Smith, Thomas E. Butler and Eric Twiste of counsel), and Berg Androphy (David H. Berg and Christopher Gadoury of the Texas bar, admitted pro hac vice of counsel) for appellants.
Terrence O. Reed of the Tennessee bar, admitted pro hac vice, and Connie Lewis Lensing for respondents.
Before: Chief Judge LIPPMAN and Judges CIPARICK, GRAFFEO, READ, SMITH, PIGOTT and JONES concur.
OPINION OF THE COURT
The judgment of Supreme Court appealed from and the order of the Appellate Division brought up for review should be affirmed with costs.
Under the circumstances of this case, defendant Kinko's, Inc. was justified in terminating its contract with plaintiff Inspire Someone, LLC. The failure of Inspire Someone to pay its monthly rent promptly was a material breach ( see Madison Ave. Leasehold, LLC v Madison Bentley Assoc. LLC, 8 NY3d 59, 65; Fifty States Mgt. Corp. v Pioneer Auto Parks, 46 NY2d 573, 578); the contract contained no provision for a grace period, and no requirement that Kinko's give notice of a breach and an opportunity to cure it; and Kinko's did not waive its right to terminate.
Judgment of Supreme Court appealed from and order of the Appellate Division brought up for review affirmed, with costs, in a memorandum.