Opinion
No. 2023-50088 Index No. CV-011381-21/NY
01-31-2023
Adam Greenberg d/b/a AROUND TOWN ENTERTAINMENT, Plaintiff, v. Alyssa Gallagher, JOHN GALLAGHER, and DIANE GALLAGHER, Defendants.
Attorney for Plaintiff: Dan Ezraty, Esq., Robinson Brong Leinwand Green Genovese & Gluck, PC Attorneys for Defendants: pro se
Unpublished Opinion
Attorney for Plaintiff: Dan Ezraty, Esq., Robinson Brong Leinwand Green Genovese & Gluck, PC
Attorneys for Defendants: pro se
Ilana J. Marcus, J.
This is an action asserting breach of contract in that defendants, Alyssa Gallagher, John Gallagher, and Diane Gallagher (collectively, the Gallaghers) failed to comply with the cancellation provisions in their contract with plaintiff, Adam Greenberg d/b/a Around Town Entertainment ("Around Town"), for the services of a wedding band. The court held a trial on October 26, 2022, where plaintiff, represented by counsel, testified and also called defendant Alyssa Gallagher on its case. The Gallaghers, representing themselves, presented the testimony of John and Diane Gallagher, who are Alyssa's parents. Plaintiff seeks a money judgment in the amount of $8,043.75, and attorneys' fees. Defendants counterclaim for $900 in attorneys' fees. The decision and order is as follows:
The parties stipulated into evidence 10 exhibits, as follows, and introduced as plaintiff's exhibit: (1) emails between the parties; (2) the contract; (3) a "Quickbooks" screenshot of the recipients of the contract; (4) proof of a "Zelle" payment of the contract deposit; (5) emails between the parties; (6) further emails; (7) a press release from the Office of the Governor of the State of Connecticut dated September 24, 2020; (8) a default notice by plaintiff's counsel; (9) a copy of the wedding venue's contract; and (10) emails between the wedding venue and Alyssa and Diane Gallagher.
On plaintiff's case-in-chief, plaintiff testified that he executed a contract dated October 7, 2020, with defendant Alyssa Gallagher for his band of musicians to perform at her wedding on September 17, 2021, at a wedding venue in Connecticut called the Lawn Club Fine Catering (the "Lawn Club"). The total contract price for the services contemplated was $10,725.00. Pursuant to the contract, 25% of the contract price was due at the time of execution. There is no dispute that an electronic bank transfer payment, via "Zelle," in the amount of $2,681.25, which represents 25% of the contract price was timely paid by Diane Gallagher (see Plft Exh 4).
Plaintiff testified that at some point in March 2021, defendants informed plaintiff that they were looking to either postpone or cancel the wedding. Plaintiff responded by informing defendants of their obligations under the contract.
Pursuant to the "Cancellation Terms" in the contract, when a cancellation takes places before 90 days of the wedding date, 50% of the contract balance is due immediately (referred to as "settlement amount"), which in turn releases plaintiff to re-book the contracted date (see Plft Exh 2 [the contract]). Upon a re-booking by a third-party, the cancelling client would receive the settlement amount back, but not the initial deposit (id.). The same paragraph further provides "Should client fail to pay the 50% due balance (the settlement amount) within 7 days, the contract will remain instated, any cancellation will be deemed unsettled and client will be obligated to the full remaining balance which will be immediately payable and due regardless of the date of cancellation." (id. at 2).
Plaintiff further referred to the emails that communicated his offers to resolve any refund or re-booking. Plaintiff emailed John and Diane Gallagher and explained that, outside of the contract, he could provide additional resolutions: (1) that plaintiff could provide a band on another date during a weeknight in peak months, or a Friday or Sunday in off-peak months for a full credit; or (2) that upon payment of the settlement amount, and if a third-party rebooks the original wedding date, plaintiff would return the settlement amount and the deposit, despite not having an obligation to do so under the contract (see Plft Exh 6). Those offers were rejected and no further payments were made.
On cross examination, plaintiff testified about the force majeure clause in the contract. The relevant portion of the force majeure clause, crafted after the onset of the Covid-19 pandemic, provides:
In the event of....[a] pandemic, Covid-19 or any unforeseen reason pertaining to force majeure, should Around Town Entertainment be unable to fulfill their obligation of performing on the date or the client cannot have the event for any of the same above force majeure reasons only, then client will have option to select a new date to commence within 12 months.... Should there be any postponement and/or cancellation of the above new date, the client will still be fully obligated to all contract payments and client agrees to make all payments as scheduled for 2021.... In case of another postponement or any cancellation, client is not guaranteed a Saturday and will still be fully obligated to the contract even if a Saturday option is not available. Client cannot cancel contract for any reason including but not limited to force majeure, frustration of purpose/inability to perform or financial hardship. Client understands and agrees to no refunds for any reason even in the case of force majeure.[Plft Exh 2, p 2].
Plaintiff testified he understood that defendants cancelled when he did not receive any further payment. Plaintiff stated that communication ended between the parties when both sides invoked that their attorneys would handle any future claim. Plaintiff also testified that the force majeure clause did not apply, in any event, because there was no force majeure event.
Plaintiff also called Alyssa Gallagher. She testified that she signed the contract on her own free will and understood that the document was legally binding. Alyssa Gallagher stated that prior to cancelling the contract she wanted to explore rescheduling the wedding but, ultimately, opted to have a smaller affair, in Mexico, with no reception.
Defendants John and Diane Gallagher testified on their case-in-cheif. John Gallagher testified that their family was precluded from the wedding event they wanted because the State of Connecticut only permitted 100 people in attendance at an indoor wedding venue as of September 2020, and the Gallaghers' contract negotiated with the Lawn Club guaranteed 110 guests. The Gallaghers wanted 186 guests, but expected that only 130 people could attend. Given that the wedding would exceed the rules promulgated by the State of Connecticut, John Gallagher testified that they could not go forward with the wedding.
Diane Gallagher testified that at some point it became clear that the groom's family, who lived out of the country could not travel to the United States for the wedding, due to restrictions on travel caused by the Covid-19 pandemic. Therefore, she discussed with plaintiff the possibility of cancelling the contract. Diane Gallagher testified that plaintiff became irate and "abrasive." Plaintiff aggressively demanded further payments or threatened litigation. She further testified that the parties discussed holding an event during a weekday in an off-peak month. After the conversations, Diane Gallagher testified that she was "overwhelmed" and "bullied." On cross examination, Diane Gallagher testified that after the "abrasive" phone call, she no longer wanted to work with plaintiff.
In a breach of contract claim, plaintiff must establish (1) the existence of a contract; (2) the party's own performance under the contract; (3) the other party's breach of the contract; and (4) resulting damages (see U.S. Bank Natl. Assn. v Lieberman, 98 A.D.3d 422, 423 [1st Dept 2012]). It is the court's responsibility to examine the contract to determine if it's language is unambiguous. The court must determine whether "the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion" (Greenfield v Philles Records, 98 N.Y.2d 562, 569 [2002] [internal quotation marks and citation omitted]). Where there is an unambiguous written agreement, courts must enforce the plain meaning of the agreement by its terms without creating ambiguities not present in the document itself (150 Broadway NY Assocs., L.P. v Bodner, 14 A.D.3d 1, 6 [1st Dept 2004]; see Slamow v Del Col, 79 N.Y.2d 1016, 1018 [1992] ["the best evidence of what parties to a written agreement intend is what they say in their writing"]). "[I]f the agreement on its face is reasonably susceptible of only one meaning, a court is not free to alter the contract to reflect its personal notions of fairness and equity" (id. at 569-570).
Moreover, "courts should be extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include" (Rowe v Great Atl. & Pac. Tea Co., 46 N.Y.2d 62, 72 [1978]). "[C]ourts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing" (see Reiss v Financial Performance Corp., 97 N.Y.2d 195, 199 [2001] [internal quotation marks and citation omitted]).
Beginning with considering the existence of a contract, the only parties obligated to the contract at issue here are plaintiff and defendant Alyssa Gallagher. Defendants John and Diane Gallagher did not sign the contract and thus, are neither parties to it, nor bound by it (see State ex rel. Grupp v DHL (USA), Inc., 19 N.Y.3d 278, 285-6 [2012][plaintiffs who are not parties to agreement, lack privity to enforce contract]). As such, John and Diane Gallagher are dismissed from this action.
The contract terms concerning cancellation are clear. It is a non-cancellable, non-refundable contract. In order to receive any deposit back, the contract requires that the client pay the settlement amount of 50% of the balance. Once that settlement amount is paid, then plaintiff is bound to return the settlement amount if the date is re-booked. There was no payment of the settlement amount by defendant. Therefore, there is no return of the settlement amount and defendant Alyssa Gallagher is bound to the terms requiring payment. Plaintiff's emails, which were stipulated into evidence, provide that plaintiff offered both a return of the settlement amount, if paid, and the deposit, if plaintiff could re-book the date. The court credits the emails, which were undisputed; therefore, it cannot be said that plaintiff was unduly acting in bad faith.
Defendants raise the application of the force majeure clause as a reason to cancel the contract. Courts have interpreted force majeure clauses according to their function of relieving a party from its obligations when expectations are unfulfilled due to an extreme or unforeseeable event beyond the parties' control and occurring by no fault or negligence of the parties themselves (see Goldstein v Orensanz Events LLC, 146 A.D.3d 492, 493 [1st Dept 2017][force majeure clause must be interpreted as to purpose which is "to limit damages...where the reasonable expectations of the parties and the performance of the contract have been frustrated by purposes beyond the control of the parties"][internal citations and quotations omitted]). Lower courts in New York State have reiterated the purpose of contractual force majeure clauses during New York State's ban on large events by Executive Order (see e.g. 1877 Webster Ave. v Tremont Ctr., 72 Misc.3d 284 [Sup Ct, Bronx Cty 2021]["Force majeure clauses excuse non-performance only where the reasonable expectations of the parties have been frustrated due to circumstances beyond the control of the parties"]; 98-48 Queens Blvd LLC v Parkside Mem. Chapels, Inc., 70 Misc.3d 1211 (A) [Civ Ct, 2021], citing Kel Kim Corp. v Cent. Markets, Inc., 70 N.Y.2d 900, 902-3 [1987])["[O]nly where the force majeure clause specifically includes the event that actually prevents a party's performance will that party be excused."]).
Here, the force majeure clause was contemplated during the Covid-19 pandemic. This contract was executed on October 7, 2020. The clause itself indicates that should a force majeure event related to the pandemic occur, then the parties may postpone the event and select a new date within 12 months. There was some testimony about defendants attempting to secure a new date. The dates offered were off-peak weekday options, which defendants did not find satisfactory. Even still, the selection of a new date was not due to a force majeure event.
Both parties presented a press release from the Office of the Governor of the State of Connecticut dated September 24, 2020. It announced that as of October 8, 2020, Connecticut will "move towards Phase 3 Reopening" which included raising the limitation of guests at indoor social and recreational guests from 25 guests to 100 guests." Again, this contract was executed on October 7, 2020, during a unique moment in history when limitations on guests at indoor events was highly foreseeable. The force majeure clause applies only where the reasonable expectations of the parties are frustrated. The fact that defendants sought more guests than permitted by the State of Connecticut does not trigger the force majeure clause in this set of circumstances.
The court credits the testimony of Diane Gallagher, who testified that in March 2021, she became aware that the groom's family could not obtain visas to travel to the United States from their home country for the wedding. The inability of these guests to be present prompted defendants to cancel. This basis for cancellation also fails to trigger the force majeure clause. The force majeure clause here is triggered where there is an impossibility for the band to play at a wedding. The unavailability of certain guests does not preclude the band's performance, nor does it preclude the event from taking place. While that might seem unduly strict, to find otherwise would be an impermissibly broad expansion of the terms of the force majeure clause (see Kel Kim Corp. v Cent. Markets, Inc., 70 N.Y.2d at 902-3).
Defendants liken the scenario here to another action, Nelkin v Wedding Barn at Lakota's Farm, LLC, 72 Misc.3d 1086 (Civ Ct, Queens Cty 2020), where the enforcement of a force majeure clause permitted reimbursement of amounts paid by a client to a wedding venue when the wedding was prohibited by the Executive Orders of the State of New York. The case at bar and that action are easily distinguishable. In Nelkin, the contract was executed in 2018, prior to the existence of the Covid-19 pandemic. The force majeure clause read that the agreement could be terminated, and all funds returned, upon a "government regulation" that made holding a wedding "illegal, impractical, or impossible to provide or use the Venue's facilities" (Nelkin, 72 Misc.3d at 1091). The clients in Nelkin exercised the force majeure clause in May 2020. Around the same time, the Governor of New York issued various Executive Orders that outright prohibited large gatherings or events. The Nelkin court explained that "from March 7 through May 28, 2020, the prohibitions of nonessential gatherings became stricter and repeatedly extended," indicating that holding the wedding would be in contravention of the Executive Orders or impossible, and thus, the application of the force majeure clause was appropriate.
The case at bar is on different footing. The force majeure clause here references the Covid-19 pandemic, and therefore, the restrictions on indoor gatherings, availability of overseas guests, and travel arrangements were foreseeable. Of more import, however, is that the circumstances for the cancellation here is not impossibility of performance.
Defendants also raised that plaintiff failed to mitigate their damages by not re-booking the date. In support of this argument Diane Gallagher testified that she asked a friend to call plaintiff and try to secure the band on the same wedding date -September 17, 2021. Diane Gallagher testified that her friend did not hear back from plaintiff. While this testimony is in essence hearsay, even if credited, it does not demonstrate a failure to mitigate.
A plaintiff's right of recovery is subject to reduction insofar as defendant can show: (1) that plaintiff failed to make reasonably diligent efforts to mitigate their damages; and (2) the extent to which such efforts would have diminished the loss (see Wilmot v State of New York, 32 N.Y.2d 164, 168-169 [1973]; Assouline Ritz LLC v Edward I. Mills & Assoc., Architects, PC, 91 A.D.3d 473, 474 [1st Dept 2012]). Defendants neither produced any competent evidence indicating that plaintiff failed to mitigate its losses nor the amount at which the losses would have been diminished. Moreover, plaintiff credibly testified on his case-in-chief that he did not suspend marketing for his band for that time, and further, that had a booking appeared for that date, he would have taken it. As such, there is no reduction here based on a lack of mitigation.
Regarding claims for attorneys' fees and expenses, it is well established that "attorneys' fees and disbursements are incidents of litigation and the prevailing party may not collect them from the losing party unless an award is authorized by agreement between the parties or by statute or court rule" (A.G. Ship Maint. Corp. v Lezak, 69 N.Y.2d 1, 5 [1986]).
The contract terms here explicitly provide under the heading "cancellation terms" that "[f]ailure to pay balance according to the terms of this agreement will make client liable for all court costs and reasonable attorney fees." Plaintiff seeks attorneys' fees and provided an statement of account indicating a bill of over $18,000.00 in costs and fees. As the prevailing party here, plaintiff is entitled to reasonable attorneys' fees. The court shall hold a hearing to determine the reasonable amount.
Defendants' counterclaims for attorneys' fees are dismissed. They are dismissed as to John and Diane Gallagher because, even though those defendants are dismissed from this action, they failed to provide any proof of fees and are self-represented. Fees are not awarded to Alyssa Gallagher as she is not the prevailing party, she failed to provide any proof of fees, and is also self-represented.
Accordingly, it is hereby ORDERED that plaintiff is awarded $8,043.75, with interest as of April 28, 2021, and costs as against defendant Alyssa Gallagher only; it is further
ORDERED, that plaintiff's claims as against defendants John Gallagher and Diane Gallagher are hereby dismissed; it is further
ORDERED, all of defendants' counterclaims for attorneys' fees are dismissed, and it is further
ORDERED, the remaining parties are directed to appear for an attorney' fees hearing before this part, Judge Ilana J. Marcus, Part 124, on April 11, 2023 at 2:30PM. This constitutes the decision and order of the court.