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Van Wagner Advertising Corp. v. S & M Enterprises

Court of Appeals of New York
492 N.E.2d 756 (N.Y. 1986)


Van Wagner Advertising Corp. v. S & M Enterprises

Facts

Barbara Michaels entered into a contract to lease the façade of her building to Van Wagner Advertising (Van Wagner) (plaintiff). The contract contained a provision under which the lease could be cancelled if Michaels sold the building to a third party. Subsequently, Van Wagner built a sign on the building and leased it to a third party. The next year, Michaels sold the building to S & M Enterprises (S & M) (defendant) and S & M cancelled the lease with Van Wagner. Van Wagner claimed that the cancellation provision in the lease with Michaels should be interpreted to mean that Michaels could cancel the lease before she sold the building, but once sold, the buyer could not cancel the lease. Under this theory, Van Wagner brought suit for breach of contract, seeking specific performance and damages. The trial court agreed with Van Wagner’s interpretation of the lease and awarded Van Wagner damages, but the court did not grant specific performance. Both parties appealed, and the appellate court affirmed. The New York Court of Appeals granted leave to appeal.

Rule of Law

Issue

Holding and Reasoning (Kaye, J.)

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