WELLS FARGO TRUST COMPANY NATIONAL ASSOCIATION v. SYNERGY GROUP CORP (2021)

SUMMARY ORDER

Synergy Group Corp. appeals from the June 9, 2020 judgment of the United States District Court for the Southern District of New York (Schofield, J.) granting Wells Fargo Trust Company summary judgment and damages of $13,516,403.12 and € 49,130.35 on its breach of guaranties claim. We assume the parties’ familiarity with the underlying facts, procedural history, and specification of issues for review.

We affirm for the reasons set out in the district court's thorough and well-reasoned opinion. The district court correctly concluded that the provisions in the agreements between the parties providing that Wells Fargo was due payments for future rent, end of lease, and repair and maintenance were not unenforceable penalties. To be enforceable, the liquidated damages provision must be a proper “estimate, made by the parties at the time they enter into their agreement, of the extent of the injury that would be sustained as a result of breach of the agreement․” JMD Holding Corp. v. Congress Fin. Corp., 4 N.Y.3d 373, 380, 795 N.Y.S.2d 502, 828 N.E.2d 604 (2005) (citation and internal quotation marks omitted). Synergy argues that the contested provisions providing for the payments are unenforceable because they are not “estimate[s] ․ of the extent of the injury” resulting from a breach. Id. However, as the district court properly determined, the liquidated damages represent what Wells Fargo would have received if there was no breach, making them reasonable estimates of future damages.

Synergy also challenges several of the district court's evidentiary decisions. We review a district court's evidentiary rulings for abuse of discretion. Silverstein v. Chase, 260 F.3d 142, 145 (2d Cir. 2001). “The determination of whether, in all the circumstances, the records are sufficiently reliable to warrant their admission in evidence is left to the sound discretion of the trial court.” Potamkin Cadillac Corp. v. B.R.I. Coverage Corp., 38 F.3d 627, 633 (2d Cir. 1994). Having reviewed each of the challenged evidentiary rulings, we find the district court did not exceed the bounds of its discretion.

We have considered the remainder of Synergy's arguments and find them to be without merit. Accordingly, the judgment of the district court hereby is AFFIRMED.