Summary
finding latent ambiguity in purchase agreement when read together with separate agreement between plaintiff and third-party defendant
Summary of this case from Short v. Churchill Benefit Corp.Opinion
August 20, 1992
Appeal from the Supreme Court, New York County (Harold Baer, Jr., J.).
This is an action for breach of contract. Plaintiff Charles Hoyt and defendant Daniel Kingsford entered into a Purchase Agreement whereby Charles Hoyt guaranteed a bank loan in the sum of $237,500 for his son Scott Hoyt. The loan was to enable Scott Hoyt to purchase an interest in West 11th Street Partners, a limited partnership in which defendant Kingsford was the general partner. The partnership was formed to convert the property to cooperative ownership, an endeavor which was unsuccessful. At the same time that plaintiff and defendant entered into the Purchase Agreement, defendant and Scott Hoyt agreed that Scott Hoyt could lease two units in the ten unit building. When the building was not converted to cooperative ownership, plaintiff sought the payment of his $250,000, as provided under the terms of the Purchase Agreement. Defendant failed to pay, claiming that the return of the apartments leased to Scott Hoyt was a part of the Agreement.
We agree with the IAS Court that there is at least a latent ambiguity in the phrase "all or a part of his right, title and interest," in that, when the Purchase Agreement and the Agreement between plaintiff and third-party defendant are read together, the phrase can be reasonably interpreted to include the leases and right to possession of the two apartments leased by third-party defendant.
However, the third-party complaint should have been dismissed since defendant is not charged with vicarious liability, but with actually causing the damage arising from the breach of contract (Dormitory Auth. v. Caudill Rowlett Scott, 160 A.D.2d 179, 181, lv denied 76 N.Y.2d 706). Punitive damages, sought in the third-party action, are not available for breach of contract, even where the breach is willful and without justification (Garrity v. Lyle Stuart, Inc., 40 N.Y.2d 354, 358). Only defendant's first affirmative defense and counterclaim, alleging that plaintiff and his son breached the contract, should have survived the motion to dismiss.
Concur — Murphy, P.J., Carro, Wallach, Ross and Smith, JJ.