Opinion
Index No. 151145/2016
06-15-2022
Nancy Bumin Zai, Plaintiff v. RoGallery Image Makers Inc. and ROBERT ROGAL, Defendants.
Plaintiff is represented by Yong Chen Esq of Liu, Chen & Hoffman LLP Defendants are represented by Howard File Esq.
Unpublished Opinion
Plaintiff is represented by Yong Chen Esq of Liu, Chen & Hoffman LLP
Defendants are represented by Howard File Esq.
Catherine M. DiDomenico, J.
Recitation as required by CPLR 2219(a) of the papers considered in the review of Motion
Sequence Numbers 002 & 003 Numbered
Notice of Motion for SJ by Defendant (002), 1
Notice of Cross Motion for SJ by Plaintiff (003) 2
Affirmation in Opposition to 002 and in support of 003 3
Reply Affirmation and Affidavit in Reply to 002 4
Transcript of Oral Argument Dated 12/21/215
Upon the foregoing cited papers, the Decision and Order is as follows:
Procedural History
Defendant RoGallery Image Makers Inc. (hereinafter "RoGallery") moves by Notice of Motion (Seq. No. 002) for an order granting summary judgment dismissing Plaintiff's Verified Complaint. Plaintiff has filed a cross motion (Seq. No. 003) seeking an order granting her summary judgment on her breach of contract cause of action against RoGallery. By So Ordered Stipulation dated July 14, 2020, all causes of action against named Co-Defendant Robert Rogal were withdrawn. By Decision and Order dated September 30, 2020, Plaintiff's causes of action sounding in negligence and conversion were dismissed by this Court leaving only her breach of contract claim. Oral argument of the present motions was held on December 21, 2021. The matter was submitted for decision upon receipt of the transcript.
Relevant Facts
Plaintiff alleges that she is an art collector / reseller who had an ongoing contractual business arrangement with Defendant RoGallery. The nature of this arrangement was that RoGallery would cosign and sell certain paintings for her either in their gallery, or elsewhere upon agreement. Plaintiff claims that she suffered actionable damages in relation to the consignment of fifteen paintings with Defendant between December 2011 and November 2013. In relation to the consignment at issue, the parties agreed that fourteen of the paintings would be displayed and auctioned on a Royal Caribbean Cruise Line ship. The terms of this consignment agreement were reduced to writing in a pair of undated contracts that the parties claim were signed in or around May 2013. In or around January 2015, Plaintiff emailed Defendant and requested the return of the paintings as they apparently had not sold. It is alleged that in March 2015 the Defendant informed the Plaintiff that all fourteen of the "cruise auction" paintings were "lost at sea" on the cruise ship and thus could not be returned to her. Neither party has chosen to implead Royal Caribbean into this proceeding.
The number of paintings at issue is presently fourteen, as one that was never transferred to Royal Caribbean was returned during the course of this proceeding.
To date, the fate of the fourteen missing paintings remains unclear. Plaintiff takes the position that after she delivered the paintings to RoGallery she is unaware of what happened. The only version of events offered has come from the principal of RoGallery, Mr. Robert Rogal. Mr. Rogal testified at his deposition that upon receipt he shipped the paintings via UPS to a company known as "World Art Auctions" who served as a transport vendor for Royal Caribbean. The principal of World Art Auctions is a man named Eugene Shuster. Neither World Art Auctions, or Eugene Shuster have been made a party to this action nor is there any indication that either has been deposed. It is RoGallery's position that the paintings remain in the possession of Royal Caribbean due to a fee dispute between that entity and World Art Auctions. Moreover, it is claimed that World Art has since filed bankruptcy and ceased its business operations.
Defendant now seeks summary judgment dismissing Plaintiff's breach of contract claim on four grounds. First, Defendant argues that it simply did not breach the contract. Pursuant to their understanding of the consignment agreement, RoGallery claims that their only contractual obligation was to turn the paintings over to an agent of Royal Caribbean, which they did. RoGallery argues that once the transfer occurred, their duties under the contract were satisfied. Second, RoGallery argues that it has a viable defense of "impossibility," as the loss of the paintings was unforeseeable and unanticipated and could not been guarded against in the contract. In the alternative RoGallery argues that if the loss of the paintings was foreseeable, any damages should have been mitigated by Plaintiff purchasing an insurance policy. Under the terms of the consignment agreement Plaintiff was obligated to obtain insurance, although the terms and amount of the insurance policy required is unstated. Finally, RoGallery argues that Plaintiff will be unable to establish a non-speculative measure of damages at trial, which they argue is fatal to her claim.
In addition to opposing Defendant's motion, Plaintiff has cross moved for summary judgment against Defendant RoGallery on her breach of contract claim. Plaintiff argues that her case is "simple" in that she fulfilled her contractual obligation to deliver the paintings to RoGallery and later requested their return when the consignment period expired. Plaintiff claims that as the paintings were not returned to her, and she was not compensated for them, Defendant RoGallery is liable to her for the sum of $32,100 plus interest. Defendant derives this measure of damages from the "net cost" and "consignment total" figures indicated in the contract. The term "net cost" is not defined in the contract, but both parties agree that pursuant to the agreement RoGallery would only earn a profit if the paintings sold above the indicated "net cost" price. In opposition, Defendant argues that the "net cost" figure is not an appropriate measure of damages, as it only reflects what the Plaintiff "wished to sell" the paintings for and is not a true reflection of their value.
Applicable Law
The proponent of a summary judgment motion has the initial burden of making a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence to eliminate any material issues of fact from the case. See Fairlane Fin. Corp. v. Longspaugh, 144 A.D.3d 858 (2d Dept. 2016). A movant's burden can be satisfied by the submission of sworn affidavits in proper evidentiary form or by the submission of deposition testimony. See Charlie Fox, Inc. v. Diallo, 48 N.Y.S.3d 264 (2d Dept. 2016). Once a prima facie showing of entitlement to summary judgment has been established, the burden shifts to the non-moving party to raise a material issue of fact. See Ubillus-Tambini v. Ischakov, 36 N.Y.S.3d 410 (2d Dept. 2016). The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of the contractual obligations, and damages resulting from the breach. See Carione v. Hickey, 133 A.D.3d 811 (2d Dept. 2015). When the language of a contract is ambiguous, its construction presents a question of fact that may not be resolved by the court on a motion for summary judgment. See Sabre Real Estate Group, LLC. v. JQ1 Assoc., LLC, 165 N.Y.S.3d 336 (2d Dept. 2022).
Decision
(1) Defendant's Motion for Summary Judgment
Defendant RoGallery argues that it is entitled to summary judgment dismissing the Plaintiff's breach of contract claim. Defendant argues that the contract at issue only required them to transfer the Plaintiff's paintings to Royal Caribbean so that they can be sold at auction. However, the contract clearly indicates otherwise. The agreement states "at end of term year cosigner [Plaintiff] must contact the RoGallery to remove unsold consignments unsold artworks to be picked up by cosigner. 7 days notice is required if cosigner wishes to pick up artworks cosigner is responsible for their own insurance and renewal of consignment." Thus, in addition to transferring the paintings to Royal, the contract imposed a continuing obligation upon RoGallery to return any unsold artwork to the Cosigner (Plaintiff) upon seven days' notice. Nothing in the contract requires Plaintiff to obtain unsold paintings directly from Royal Caribbean or World Art Auctions and neither of those entities are parties to the contract. Plaintiff claims that in or around January of 2015 she emailed Defendant and requested the return of her paintings as they had not sold. Accordingly, this email, and a follow up phone call in March of 2015 triggered RoGallery's obligation to return the paintings, which they failed to do. Thus, it cannot be determined as a matter of law that RoGallery fulfilled its obligations under the contract.
Defendant next argues that they have established the defense of "impossibility" as a matter of law. "Impossibility" excuses a party's performance under a contract when the destruction of the subject matter of the contract makes performance objectively impossible. See Berman v. TRG Waterfront Lender, LLC, 181 A.D.3d 783 (2d Dept. 2020). Moreover, the impossibility must be produced from unanticipated events that could not have been foreseen or guarded against in the contract. See Kolodin v. Valenti, 115 A.D.3d 197 (1st Dept. 2014). The defense of impossibility is generally limited to destruction of the means of performance by an act of God, or by law. See 407 East 61st Street Garage, Inc. v. Savoy Fifth Ave. Corp., 23 N.Y.2d 275 (1968). Here, the motion record simply does not support an impossibility defense. There is a question of fact as to the status of the paintings, accordingly, it cannot be said that their "destruction" was an unforeseeable act of God, in fact, there is no evidence in the motion record from which this Court could determine that the paintings were in fact destroyed. Moreover, it is not unforeseeable that goods can go missing or be destroyed during transit, or when in the possession of a bailee, and insurance can be purchased to guard against this loss. Thus, the Court cannot conclude that the loss of the paintings could not have been anticipated and guarded against in the contract. See Pleasant Hill Developers, Inc., v. Foxwood Enters., LLC, 65 A.D.3d 1203 (2d Dept. 2009).
Finally, Defendant argues that they are entitled to summary judgment because Plaintiff cannot establish a non-speculative measure of damages as a matter of law. The motion record does not support this assertion. The contract clearly attributes a monetary figure to each painting resulting in a gross sum of $32,100, the figure sought by Plaintiff in her Summons and Compliant. While Defendant argues that this figure is speculative, and not a real measure of value, the Court cannot make that finding as matter of law. The figures indicated are at least some evidence of value. Moreover, as argued by Plaintiff, it is illogical that Defendant would simply allow Plaintiff to price the paintings "any way she wished" for a sum that she "wished to obtain" as under the contract Defendant would only earn a profit if the paintings sold for over the listed price. In any event, a breach of contract without ascertainable damages is still actionable and may recover nominal damages. See Perry v. McMahan, 164 A.D.3d 1488 (2d Dept. 2018); see also Ross v. Sherman, 95 A.D.3d 1100 (2d Dept. 2012).
For the reasons set forth above Defendant has failed to meet their initial burden of establishing an entitlement to summary judgment as a matter of law. See Halcyon Constr. Corp. v. Strong Steel Corp., 199 A.D.3d 898 (2d Dept. 2021). Thus, their motion for summary judgment must be denied without considering the sufficiency of the opposition papers offered by Defendant. See Affiliated Funding Corp. v. Money Source, Inc., 181 A.D.3d 852 (2d Dept. 2020). However, if the Court were to consider those papers, it would find that Plaintiff has raised various triable issues of fact, including the general question as to what actually happened to the fourteen paintings at issue.
(2) Plaintiff's Cross Motion for Summary Judgment
In addition to opposing Defendant's Motion, Plaintiff has also affirmatively cross moved for summary judgment on her breach of contract claim. In order to establish a prima facie entitlement to summary judgment Plaintiff is required to establish all the elements of a breach of contract cause of action as a matter of law. See B & H Assoc. of NY, LLC v. Fairley, 148 A.D.3d 1097 (2d Dept. 2017). Plaintiff must show the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of the contractual obligations, and damages resulting from the breach. See Dee v. Rakower, 112 A.D.3d 204 (2d Dept. 2013).
Here, Plaintiff argues that she has established all the elements of her breach of contract cause of action as a matter of law. It is undisputed that Plaintiff delivered the fifteen paintings to Defendant RoGallery as required by the contract. It is further undisputed that she requested their return by email and telephone when they didn't sell. Finally, it is undisputed that the paintings were not returned to her upon seven days' notice notwithstanding the clear language in the contract. As these undisputed facts fulfill all the required elements of the liability aspect of a breach of contract cause of action, her motion for summary judgment is hereby granted, in part, resolving the issue of liability in her favor. See Nussberg v. Tatintsian, 111 A.D.3d 441 (1st Dept. 2013); see also Great Jones Studios Inc. v. Wells, 190 A.D.3d 587 (1st Dept. 2021); Federico v. Dolitsky, 176 A.D.3d 916 (2d Dept. 2019). In opposition Defendant has not raised a triable issue of fact sufficient to defeat Plaintiff's motion on the issue of liability.
The issue of damages is more difficult to determine. Plaintiff alleges that she is entitled to summary judgment granting her the sum of $32,100 as indicated on the face of the contract. However, Defendant argues that this figure is not a proper measure of damages as it does not reflect the value of the paintings but rather an assessment of what Plaintiff wished to get for the paintings. This Court cannot, as a matter of law, determine what the parties intended by the "net cost" values indicated on the contract. Accordingly, a trial will be required to determine the proper amount of damages. See Will of Rothko, 56 A.D.2d 499 (1st Dept. 1977); Peak v. Northway Travel Trailers Inc., 260 A.D.2d 840 (3rd Dept. 1999). Where property is lost or destroyed the measure of damages is generally the reasonable market value of the item immediately before its loss. See Reed v. Cornell Univ., 138 A.D.3d 816 (2d Dept. 2016); see also Lozinsky v. Michael Neubauer Servicenter, Inc., 259 A.D.2d 673 (2d Dept. 1999); Deutsch v. Nat'l Props., 19 A.D.2d 823 (1st Dept. 1963).
In addition to disputing Plaintiff's proposed measure of damages, Defendant argues that Plaintiff was contractually obligated to purchase an insurance policy for the paintings, which she admittedly failed to do. Defendant claims the failure to obtain insurance is relevant to their defense that Plaintiff failed to mitigate their own damages. See Tynan Incinerator Co. v. International Fidelity Ins. Co., 117 A.D.2d 796 (2d Dept. 1986). However, the single line in the contract that required Plaintiff to buy insurance did not indicate what risk the policy was intended to cover, or the policies' amount and duration. Accordingly, there is a question of fact regarding whether the failure to obtain insurance was a material breach of the contract, and what effect, if any, it will have on Plaintiff's claim for damages. The determination of whether a contractual term is ambiguous is one of law for the Court to determine. See South Rd. Assocs., LLC v. IBM, 4 N.Y.3d 272 (2005). Here, the undefined term "insurance" is ambiguous as it does not include necessary details. Once a contract term is found to be ambiguous, extrinsic evidence may be used to resolve the ambiguity. See Chen v. Yan, 109 A.D.3d 727 (1st Dept. 2013). Here, Plaintiff claims that she inquired as to what insurance was necessary and Defendant's principal told her (in sum and substance) that it wouldn't be necessary. When the determination of the parties' intent depends upon the credibility of extrinsic evidence or a choice among possible inferences to be drawn from the extrinsic evidence, the issue becomes one of fact. See Amusement Business Underwriters v. American International Group, Inc., 66 N.Y.2d 878 (1985).
Accordingly, for the reasons set forth above, Plaintiff's motion for summary judgment on the issue of damages is hereby denied as there are issues of fact regarding the proper measure and amount of damages, and if that amount should be offset in some way by Plaintiff's failure to obtain insurance.
This constitutes the Decision and Order of the Court on all issues raised in relation to
motion sequence numbers 002 and 003. As Plaintiff has obtained partial summary judgment on the issue of liability the matter will continue to trial on the issue of damages together with any Affirmative Defenses raised by Defendant relating to damages.