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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: April 8, 2015

Claim for Breach of Covenant of Good Faith Permissible Where Not Duplicative

On April 2, 2015, the First Department issued a decision in Delta Dallas Alpha Corp. v. South St. Seaport L.P., 2015 NY Slip Op. 02861, affirming a decision allowing a plaintiff to add a claim for breach of the covenant of good faith and fair dealing.

In Delta Dallas Alpha Corp., the First Department affirmed the trial court’s grant of a motion to amend to add a claim for breach of the implied covenant of good faith and fair dealing. The First Department explained:

To the extent the claim for breach of the implied covenant of good faith and fair dealing is based on [the defendant’s] commencement of an action to recover rent under a promissory note and a nonpayment proceeding to evict plaintiff, it is not duplicative of the breach of contract claims since it is based on allegations different from those underlying the contract claims and does not implicate the lease. Further, the complaint alleges that [the defendant] commenced the promissory note action and nonpayment proceeding to get plaintiff out of the premises, as part of a plan to redevelop the area and charge higher rents, i.e. in bad faith.

(Internal citations omitted).

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