Opinion
012448/2020
06-29-2020
Emily NELKIN and Brian Farr, Plaintiff, v. WEDDING BARN AT LAKOTA'S FARM, LLC, Defendant.
Plaintiff's Counsel: Chesney, Nicholas & Brower LLP, 485 Underhill Blvd., Suite 308, Syosset, NY 11791 Defendant's Counsel: Kelly & Sellar Ryan, PLLC, 18 Gray Avenue, Greenwich, NY 12834
Plaintiff's Counsel: Chesney, Nicholas & Brower LLP, 485 Underhill Blvd., Suite 308, Syosset, NY 11791
Defendant's Counsel: Kelly & Sellar Ryan, PLLC, 18 Gray Avenue, Greenwich, NY 12834
David M. Hawkins, J. For the following reasons, Plaintiffs’ motion for summary judgment is granted in the amount of $7,750.00.
In this action, Plaintiffs seek $11,625.00 for reimbursement upon rescission of contract, breach of contract, and unjust enrichment. Plaintiffs claim that the Parties entered into a contract (the Contract) to rent a venue for a wedding (the Wedding). After the Governor of the State of New York issued Executive Orders banning people from congregating because of the COVID-19 virus, Plaintiffs sought a refund based upon a force majeure provision of the Contract. Defendant refused. Plaintiff now moves for summary judgment and Defendant opposes.
The terms of the contract between the Parties is hereby adopted and made part of the instant decision.
Plaintiffs, Emily Nelkin and Brian Farr, state that on November 6, 2018, they entered into the Contract with the Defendant, Wedding Barn at Lakota's Farm, LLC (Wedding Barn), to rent the venue for October 10, 2020. The rental fee was $15,500.00, which included an initial $3,875.00 booking fee. Plaintiffs state that as of May 2020, Ms. Nelkin's parents paid $11,625.00 (on Plaintiffs’ behalf), with the final payment due sixty days before October 10, 2020. Plaintiffs state that in May of 2020, they decided to cancel the October 10, 2020 wedding due to the COVID-19 pandemic and the restrictions placed upon gatherings. Plaintiffs had previously planned on having one-hundred-and-fifty guests at their wedding,
Plaintiffs state that on or about May 15, 2020, Ms. Nelkin informed Kimberly Finney, a member of Wedding Barn, that they were cancelling the Wedding. They state that Ms. Finney suggested that the Wedding be postponed a year, but Plaintiffs did not agree to do so. Plaintiffs state that Ms. Finney refused to refund any of the money already paid on the Contract. Plaintiffs state that they entered the contract and dealt with the Defendant in good faith. Plaintiffs submit the following in support of the motion:
a copy of the Contract;
an email from Plaintiffs’ attorney to the Defendant, dated May 28, 2020, indicating that they wished to cancel the wedding due to the COVID-19 pandemic and requesting a refund;
a letter from Plaintiffs’ attorney to Ms. Finney dated June 2, 2020, requesting a refund due to the impossibility of having the wedding on October 10, 2020 due to the COVID-19 pandemic; and
a decision by the United States District Court for the Northern District of New York, referencing Executive Order 202: Bill & Ted's Riviera, Inc. v. Cuomo , 494 F. Supp. 3d 238 [2020]
Defendant argues in opposition that the Plaintiffs have failed to meet their burden for summary judgment. Defendant argues that in March of 2020, by executive order, all non-essential businesses were shut down and gatherings in excess of ten people were prohibited. It further argues that the State of New York was separated into regions and that Defendant was located in the "Capital District Region". Defendant argues that in May of 2020, the Capital District Region was in "Phase III" of reopening, which permitted gatherings of twenty-five people, and that by July 1, 2020, gatherings of fifty people were permitted. (Defense Counsel's Affirmation in Opposition paragraph 6) Defendant further argues that it offered to either continue to hold the wedding with a reduced number of people or reschedule the event for the following year.
Defendant argues that Plaintiff unilaterally chose to breach the contract and that Defendant would have been able to provide the venue on October 10, 2020, with a reduced number of guests. Defendant further argues that the number of guests was not a material term of the agreement, and that, as of October 10, 2020, the New York City COVID-19 guidelines permitted gatherings of fifty people.
Kimberly Finney states that on November 6, 2018, the Parties entered into the Contract to rent the venue for October 9 and 10 of 2020. Ms. Finney states that the total fee was $15,500.00, including a non-refundable $3,875.00 booking fee. She states that the $15,500.00 was not due until sixty days before the event and that Plaintiffs had paid a total of $11,625.00 as of May 2020. Ms. Finney further states that in May of 2020, Ms. Nelkin informed her that she was terminating the Contract. She states that she advised Ms. Nelkin that it was more than five months until the Wedding, but Ms. Nelkin insisted on cancelling. Ms. Finney states that Plaintiffs’ Counsel (Ms. Nelkin's father) also contacted her during May of 2020 and refused to change the date or modify the Wedding plans. She informed him that she would not refund the deposits paid.
Ms. Finney argues that the Defendant did not breach the contract and was "ready, willing, and able to perform the contract to the fullest extent of NYS law." She further states that the Defendant was willing to change the date of the event and that the Plaintiffs unilaterally chose to terminate the Contract. Ms. Finney further states that on July 1, 2020, the "Capital Region" was designated in "Phase IV" of re-opening, which allowed gatherings of up to fifty people, and that it remained so designated on October 9 and 10 of 2020. She states that the Defendant was injured by the Plaintiffs’ breach, and that Plaintiffs owe the remaining unpaid $3,875.00 and $6,000.00 in attorney's fees.
" ‘The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case.’ " ( Ferrigno v. Jaghab, Jaghab & Jaghab, P.C. , 152 A.D.3d 650, 652, 59 N.Y.S.3d 115 [2nd Dept. 2017]quoting Winegrad v. New York Univ. Med. Ctr. , 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985] ) The burden then shifts to the motion's opponent to "present evidentiary facts in admissible form sufficient to raise a genuine, triable issue of fact." ( Mazurek v. Metropolitan Museum of Art, 27 A.D.3d 227, 228, 812 N.Y.S.2d 12 [1st Dept. 2006]citing Zuckerman v. City of New York , 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ) If there is any doubt as to the existence of a triable fact, the motion for summary judgment must be denied. ( Rotuba Extruders, Inc. v. Ceppos , 46 N.Y.2d 223, 231, 413 N.Y.S.2d 141, 385 N.E.2d 1068 [1978] )
"The essential elements of a breach of contract cause of action are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of his or her contractual obligations, and damages resulting from the breach." ( Riccio v. Genworth Fin., 184 A.D.3d 590, 591, 124 N.Y.S.3d 370 [2nd Dept. 2020] [internal quotation marks omitted ])
Force majeure clauses are to be interpreted in accord with their function, which is to relieve a party of liability when the parties’ expectations are
frustrated due to an event that is "an extreme and unforeseeable occurrence," that "was beyond [the party's] control and without its fault or negligence". When the event that prevents performance is not enumerated, but the clause contains an expansive catchall phrase in addition to specific events, "the precept of ejusdem generis as a construction guide is appropriate"--that is, "words constituting general language of excuse are not to be given the most expansive meaning possible, but are held to apply only to the same general kind or class as those specifically mentioned."
( Team Mktg. USA Corp. v. Power Pact, LLC , 41 A.D.3d 939, 942-943, 839 N.Y.S.2d 242 [3rd Dept. 2007]citing 30 Lord, Williston on Contracts § 77:31 [4th ed]; 8-31 Corbin on Contracts § 31.4 [2006]; United Equities Co. v. First Natl. City Bank , 41 N.Y.2d 1032, 395 N.Y.S.2d 640, 363 N.E.2d 1385 [1977]affg 52 A.D.2d 154, 383 N.Y.S.2d 6 [1st Dept. 1976] ; Macalloy Corp. v. Metallurg, Inc. , 284 A.D.2d 227, 227, 728 N.Y.S.2d 14 [1st Dept 2001] ); Kel Kim Corp. v. Central Mkts. Inc. , 131 A.D.2d 947, 950, 516 N.Y.S.2d 806 [1987], affd 70 N.Y.2d 900, 524 N.Y.S.2d 384, 519 N.E.2d 295 [1987] ).
Following the Governor's Executive Orders banning people from congregating, multiple lower courts have reiterated the purpose of contractual force majeure clauses. (See e.g. 1877 Webster Ave. v. Tremont Ctr., 2021 N.Y. Slip Op. 21113, 72 Misc..3d 284, 148 N.Y.S.3d 332 [Sup. Ct., 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"] Sanders v. Edison Ballroom LLC, 2021 N.Y. Slip Op. 30900(U), 2021 WL 1089938 [Sup. Ct., New York County, March 22, 2020] ["Courts have interpreted force majeure clauses according to their function of relieving a party from its obligations when expectations are frustrated due to an event that is an extreme or unforeseeable occurrence and beyond the parties’ control and without its fault or negligence"]; 98-48 Queens Blvd LLC v. Parkside Mem. Chapels, Inc. , 70 Misc. 3d 1211(A), 137 N.Y.S.3d 679 [Civ. Ct., 2021] ["[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 Contract contains a force majeure provision, which specifically includes "government regulations" and "disasters":
28. IMPOSSIBILITY:
The performance of this Agreement is subject to termination without liability and refund of all refundable deposits upon the occurrence of any circumstances beyond the control of either party — such as acts of God, war, acts of terrorism, government regulations (including zoning ordinance), disaster, strikes (except those involving employees or agents of the party seeking the protection of this clause), civil disorder, or curtailment of transportation facilities — to the extent that such circumstances makes it illegal, impractical, or impossible to provide or use the Venue's facilities. The ability to terminate this Agreement without liability pursuant to this provision is conditioned on delivery of written notice to the other party setting forth the basis for such termination as soon as reasonably practicable — but in no event longer than 10 days — after learning of such basis.
(Contract at p. 19)
The Contract further indicates:
We offer one price to use our facilities. The cost remains the same regardless of the number of guests who attend or the amenities you choose to use of the event (i.e. tables, china etc.) You are welcome to provide different tables or china if you choose, however it will not affect your final event charge. (i.e. no discount will be given).
(id. at 19)
In addition, the Contract indicates that the initial $3,875.00 "booking fee" is non-refundable (id. at 10).
The Court finds that the Plaintiffs have established prima facie entitlement to summary judgment. On March 7, 2020, the Governor of the State of New York issued Executive Order 202 declaring a "state disaster emergency" for the entire State of New York. Over the next three months, the Governor issued multiple Executive Orders requiring that "large gatherings or events to be cancelled":
Executive Order-No. 202.3
"The directive requiring large gatherings and events to be cancelled or postponed
if they had anticipated attendance in excess of 500 people by virtue of Executive Order 202.1 dated March 12, 2020, is hereby amended and modified to require that any large gathering or event (concert, conference, worship service, performance before a large
audience, etc.) shall be cancelled or postponed if more than fifty persons are expected in attendance, at any location in New York State until further notice."
( 9 NYCRR 8.202.3 )
Executive Order-No. 202.14
"By virtue of Executive Orders Numbers 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, and 202.13 which closed or otherwise restricted public or private businesses or places of public accommodation, and which required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations, games, meetings or other social events), all such Executive Orders shall be continued, provided that the expiration dates of such Executive Orders shall be aligned, such that all in-person business restrictions and
workplace restrictions will be effective until 11:59 p.m. on April 29, 2020, unless later extended by a future Executive Order. The enforcement of any violation of the foregoing directives on and after April 7, 2020, in addition to any other enforcement mechanism stated in any prior Executive Orders, shall be a violation punishable as a violation of Public Health Law Section 12-b(2) and the Commissioner of Health is directed and authorized to issue emergency regulations. The fine for such violation by an individual who is participating in any gathering which violates the terms of the orders or is failing to abide by social distancing restrictions in effect in any place which is not their home shall not exceed $ 1,000."
( 9 NYCRR 8.202.14 )
Executive Order-No 202.18
"Executive Order Number 202.14, which extended the provisions of Executive Orders Numbers 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, and 202.13 which each closed or otherwise restricted public or private businesses or places of public accommodation, and which required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations, games, meetings or other social events), is hereby continued, provided that the expiration date of such provisions of such Executive Orders shall be aligned, such that all in-person business restrictions and workplace restrictions will be effective until 11:59 p.m. on May 15, 2020, unless later extended by a future Executive Order. All enforcement mechanisms by state or local governments shall continue to be in full force and effect until May 15, 2020 unless later extended by a future Executive Order."
( 9 NYCRR 8.202.18 )
Executive Order-No 202.31
Executive Order Number 202.28, which extended the provisions of Executive Orders Numbers 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, 202.13, and 202.14 which each closed or otherwise restricted public or private businesses or places of public accommodation, and which required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations, games, meetings or other social events), which together constitute New York On PAUSE, is hereby continued until 11:59 p.m. on May 28, 2020, unless later amended or extended by a future Executive Order;
Provided, however, that effective at 12:01 a.m. on May 15, 2020 that the reductions and restrictions on the in-person workforce at non-essential businesses or other entities shall no longer apply to Phase One industries: Construction, Agriculture, Forestry, Fishing and Hunting, Retail - (Limited to curbside or in-store pickup or drop off); Manufacturing and Wholesale Trade;
Such businesses or entities must be operated subject to the guidance promulgated by the Department of Health;
Only those businesses or entities in a region that meets the prescribed public health and safety metrics, as determined by the Department of Health, will be eligible for reopening; As of May 14, 2020 the regions are: Finger Lakes, Central New York, Mohawk Valley, Southern Tier and the North Country regions comprising the counties of: Genesee, Livingston, Monroe, Ontario, Orleans, Seneca, Wayne, Wyoming, Yates, Cayuga, Cortland, Madison, Onondaga, Oswego, Fulton, Herkimer, Montgomery, Oneida, Otsego, Schoharie, Broome, Chemung, Chenango, Delaware, Schuyler,
Steuben, Tioga, Tompkins, Clinton, Essex, Franklin, Hamilton, Jefferson, Lewis, and St. Lawrence. Any additional regions which meet the criteria after such date will be deemed to be incorporated into this Executive Order without further revision and will be permitted to re-open phase one industries, subject to the same terms and conditions.
Executive Orders 202.14, 202.18, and 202.31 clearly and unambiguously "required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason (e.g. parties, celebrations, games, meetings or other social events)" through May 28, 2020. ( 9 NYCRR 8.202.14, 8.202.18, and 202.31 )
The Defendant does not dispute that Ms. Nelkin contacted Ms. Finney on May 15, 2020, to cancel the Contract. As such, when Plaintiffs sought to cancel the Contract, the Defendant was prohibited from fulfilling the Contract pursuant to Executive Orders 202.14, 202.18 and 202.31. These Executive Orders fall within the scope of the Contract's force majeure provision as "government regulations".
Further, the Court does not find that the Defendant has created an issue of fact in opposition to the motion. The Defendant's argument that the restrictions had lifted enough by October 15, 2020, to have allowed for a fifty-person wedding has no bearing on whether the Plaintiffs had sufficient grounds to exercise the force majeure provision in May of 2020.
The issue before the Court is whether the Plaintiffs had sufficient grounds to exercise the force majeure provision in May of 2020 based upon the circumstances present at that time , not how those circumstance may have changed by October 10, 2020. Although the Court recognizes that the Plaintiff sought to exercise the force majeure provision almost five months before the date of performance, there was no indication that the prohibitions would be lifted by October 10, 2020. Further, from March 7 through May 28 of 2020, the prohibitions on non-essential gatherings became stricter and were repeatedly extended, strongly suggesting that the restrictions would remain in effect into the foreseeable future. (See 9 NYCRR 8.202.3, 202.14, 8.202.18, and 202.31 )
Further, the Defendant has failed to create an issue of fact as to whether there was any indication in May of 2020 that they would have been able to perform on the Contract. Defendant does not include any basis for its argument that it was located in an area that was in "Phase III" of reopening in May of 2020 or in "Phase IV" in July of 2020. Defendant does not refer to any specific statute or Executive Order in support of this argument.
Finally, the Court does not find that the provision of the Contract indicating that the cost remained the same "regardless of the number of guests who attend" (Contract at p. 19) implies that the Defendant would have been able to perform despite the Executive Orders. Defendant argues, based upon this provision, that the number of guests at the venue was not a material term of the Contract. However, the Executive Orders in effect during May of 2020 specifically required "postponement or cancellation of all non-essential gatherings of individuals of any size for any reason". As such, the orders prohibited any weddings regardless of the number of attendants. Defendant could not have performed on the Contract at all under these prohibitions.
The government regulations present in May of 2020 were sufficient for the Plaintiffs to exercise the force majeure provision of the Contract on the basis that the Defendant would not be able to perform on October 10, 2020. The Court recognizes that the Executive Orders issued during the initial months of the COVID-19 pandemic made it very difficult to predict what prohibitions would be in effect in the foreseeable future. As such, determining whether there was a sufficient basis for the Plaintiffs to exercise the force majeure provision must focus on the circumstances present at the time they chose to cancel the contract and whether those circumstances were sufficient to show that the Defendant would not be able to perform on the Contract. To determine otherwise would place an inequitable burden upon contracting parties, whereby they could never exercise force majeure provisions, regardless of the present circumstance, without being potentially contractually bound later.
On the issue of damages, the Court finds that the Defendant is only entitled to the amount paid on the contract, excluding the $3,875.00 "booking fee". The Contract indicates that the booking fee was non-refundable, and the force majeure provision specifically indicates that the Plaintiff was only entitled to a "refund of all refundable deposits". (Contract at p. 19) Accordingly, Plaintiffs’ motion for summary judgment is granted, and judgment shall be entered for the Plaintiffs in the amount of $7,750.00 with statutory interest running from the date of entry.
The foregoing constitutes the Order and Decision of the Court.