Trial Court Rules Plaintiff Unable To Establish Damages
Berkman Henoch successfully defends a commercial landlord against a claim for damages.
Plaintiff, 90 Chicken Corp. (“Plaintiff” or “Tenant”) commenced an action alleging, among other things, that Defendant, 90 Jericho Realty Corp. (“Defendant” or “Landlord”) breached the parties’ lease agreement when Landlord failed to deliver possession of certain real property in March 2023 thus, preventing Plaintiff from opening its intended Popeyes fast-food restaurant.
At a bench trial held in the Supreme Court, Nassau County before the Honorable Timothy Driscoll, Berkman Henoch argued that even if the Landlord breached the lease agreement, Plaintiff was nonetheless not entitled to damages as Plaintiff failed to provide reliable and/or competent evidence with respect to the calculation or amount of future lost profits.
At the trial, during the cross-examination of the Plaintiff’s witnesses, which included an expert in the field of business valuation, Berkman Henoch elicited testimony that the proposed Popeyes location was “quite different” from several other Popeyes Plaintiff operated, “including demographics, population density, and traffic.” Indeed, during cross-examination, Plaintiff’s witnesses admitted that “some of the fast-food restaurants in . . . the family’s portfolio actually lost money.”
Following the trial and its review of the parties’ post-trial proposed findings of fact and conclusions of law, the Court issued a Decision After Trial (“Decision) and awarded Plaintiff only nominal damages of $1.00.
In its Decision, the Court noted that “Lost profits must be provided with reasonably certainty . . . This is particularly difficult when the business [as in the case here] is new, as ‘there does not exist a reasonable basis of experience upon which to estimate profits with the requisite degree of reasonable certainty.” The Court further observed that in light of the testimony, “there was no competent evidence . . . that Popeye’s would succeed at the Premises, much less to accurately compute any damages from a successful operation.”
Ultimately, the Court reasoned that “[i]nasmuch as Plaintiff had only claimed damages based on lost future profits, which the Court cannot award . . . the only damages that are appropriate are nominal damages.”
The Landlord was represented by Joseph E. Macy, Esq. and Nicholas S. Tuffarelli, Esq. – members of Berkman Henoch’s Litigation Department.