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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: August 28, 2015

Absence of Damages Fatal of Breach of Contract Claim

On August 21, 2015, Justice Kornreich of the New York County Commercial Division issued a decision in Twin City Fire Insurance Co. v. Arch Insurance Group, Inc., 2015 NY Slip Op. 31586(U), granting the defendants summary judgment on the plaintiff’s breach of contract claim because the plaintiff had presented no evidence of damages, explaining:

It is hornbook law that a breach of contract claim must be supported by proof of damages resulting from the breach. Damages in an action for breach of contract are intended to restore the injured party to the position he would have had if the contract had been fully performed. The damages a party may recover for breach are those that ordinarily and naturally flow from the breach, are proximately caused by the breach, are certain or capable of ascertainment, and are not remote, speculative or contingent.

(Internal citations omitted). Because the plaintiff had not created a question of fact regarding its damages from the defendants’ breaches, the defendants were entitled to summary judgment.

This decision continues the string of inconsistent decision from the courts on whether damages are an element of a breach of contract claim. Compare the June 19, 2014, decision by Justice Schweitzer of the New York County Commercial Division in 37 East 50th St. Corp. v. Restaurant Group Management Services, LLC, 2014 NY Slip Op. 31595(U), holding that nominal damages are sufficient to support a claim for breach of contract with the January 2, 2014, decision of Justice Kornreich of the New York County Commercial Division decision in Saxon Technologies, LLC v. Wesley Clover Solutions-North America, Inc., 2014 NY Slip Op. 30002(U), which dismissed a breach of contract claim for failure adequately to plead damages.

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