ROSENFELD v. ROSENFELD (2025)

Order, Supreme Court, New York County (Douglas E. Hoffman, J.), entered on or about May 16, 2023, which to the extent appealed from as limited by the brief, denied plaintiff husband's motion for damages arising from a breach of the parties’ confidentiality agreement, denied the husband's motion for leave to amend his complaint to add a cause of action for breach of contract, and denied the husband's request for counsel fees, unanimously affirmed, without costs.  Appeal by defendant wife unanimously dismissed, without costs, for failure to perfect.

The wife's prior counsel appears to have divulged confidential information during a phone call to a person who is not a party to this action, thus violating the parties’ confidentiality agreement.  Nonetheless, on this record, the husband did not make a showing of entitlement to damages under the liquidated damages provision in the confidentiality agreement, as he did not identify any nonspeculative damage he actually sustained because of the wife's breach of the agreement (see Rubin v. Napoli Bern Ripka Shkolnik, LLP, 179 A.D.3d 495, 496, 118 N.Y.S.3d 4 [1st Dept. 2020]).  Under these circumstances, the liquidated damages provision calls for “an unenforceable penalty” (JMD Holding Corp. v. Congress Fin. Corp., 4 N.Y.3d 373, 379–380, 795 N.Y.S.2d 502, 828 N.E.2d 604 [2005];  see also Truck Rent–A–Ctr., Inc. v. Puritan Farms 2nd, Inc., 41 N.Y.2d 420, 425, 393 N.Y.S.2d 365, 361 N.E.2d 1015 [1977]).

Leave to amend the complaint was properly denied, as the proposed second amended complaint is devoid of merit (see Perrotti v. Becker, Glynn, Melamed & Muffly LLP, 82 A.D.3d 495, 498, 918 N.Y.S.2d 423 [1st Dept. 2011]).

As the husband was not the prevailing party on the motion, the court's determination not to award him counsel fees was a provident exercise of its discretion.