LEISURE TIME TRAVEL INC v. VILLA ROMA RESORT AND CONFERENCE CENTER INC

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LEISURE TIME TRAVEL, INC., Plaintiff, v. VILLA ROMA RESORT AND CONFERENCE CENTER, INC., Defendant.

No. 32504/09.

Decided: February 22, 2017

The following papers numbered 1 to 13 were read on this motion by plaintiff for an Order pursuant to CPLR 3212 which: (1) grants plaintiff Leisure Time Travel Inc. partial summary judgment in the amount of $220,000.00, on the first cause of action, together with statutory 9 per cent interest from May 8, 2006, pursuant to CPLR sections 5001 through 5004, and any all applicable law, and orders the clerk to enter Judgment accordingly; (2) additionally grants partial summary judgment on the second and third causes of action, by deciding that defendant Villa Roma breached its contract with plaintiff Leisure Time when it informed Leisure Time that it would not be permitted to produce Passover holiday programs for the years 2009 through 2011; (3) that the court order that plaintiff Leisure Time's damages on the second and third causes of action be decided at trial; and (4) that defendant Villa Roma's two counterclaims be dismissed; and on the defendant's cross-motion for summary judgment.

Upon the foregoing papers, the motion and cross-motion are decided as follows:

Plaintiff Leisure Time Travel Inc. (“LTT”) is a travel company that specializes in producing holiday tours and vacations that comport with Jewish law and tradition. Defendant Villa Roma purports to be the last operating resort in the Catskills' famed “Borscht Belt.”

On July 2, 2001, the parties entered into a contract whereby the Villa Roma would be utilized for five consecutive Passover celebrations from 2002 through 2006. On October 25, 2005, the parties agreed to extend the contract for an additional five years, through Passover 2011.

Pursuant to the contract, the hotel and kitchen facilities were turned over to LTT on April 5, 2006. This was to allow the LTT to prepare the facilities for the Passover holidays which were to begin on April 12, 2006. On April 11, 2006, a fire began in the kitchen which ultimately destroyed the main building of the hotel which prevented the planned event from being held. The cause of the fire was never determined. Villa Roma refused to return the $220,000.00 down payment.

Villa Roma reopened in October, 2008. After the reopening, LTT contacted Villa Roma about holding the 2009–11 events that were contemplated by the contract. Villa Roma refused.

“Generally, once a party to a contract has made a promise, that party must perform or respond in damages for its failure, even when unforeseen circumstances make performance burdensome” (Kel Kim Corp. v. Central Markets, Inc., 70 N.Y.2d 900, 902 [1987] ). “While [impossibility of performance] defenses have been recognized in the common law, they have been applied narrowly, due in part to judicial recognition that the purpose of contract law is to allocate the risks that might affect performance and that performance should be excused only in extreme circumstances” (id.). “Impossibility excuses a party's performance only when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible.” (id.). “[T]he impossibility must be produced by an unanticipated event that could not have been foreseen or guarded against in the contract” (id.).

However, “the defense of impossibility of performance only excuses the performance of an executory contract” (Univ. of Minnesota v. Agbo, 176 Misc.2d 95, 96 [App Term 1998] ). “It has never been held available for the purpose of unjustly enriching one party at the expense of the other” (Sokoloff v. Natl. City Bank of New York, 208 AD 627, 630 [1st Dept 1924], affd, 239 N.Y. 158 [1924] ).

In the instant case, the fire undoubtably rendered the performance of the contract impossible. However, the defendant unjustly enriched itself by retaining the deposit. The proper remedy for this situation is restitution (see, Agbo, supra, at 96). Accordingly, the motion for summary judgment on the first cause of action, which seeks return of the deposit, is granted.

The remaining causes of action seek damages for Villa Roma's refusal to host the Passover celebrations for 2009–2011. “When impossibility of performance is contemplated, the condition ordinarily thought of is one of permanent impossibility or at least impossibility which may reasonably be expected to continue for a substantial period of time. Merely temporary supervening impossibility of brief duration may, at least as to some contractual obligations, be regarded as not excusing the promisor from performance when performance subsequently becomes possible” (84 A.L .R.2d 12 (Originally published in 1962)).

Under the facts of this case, the contract was rescinded at the time of the fire. Although the condition of impossibility ultimately proved to be temporary, it was of a long duration. Moreover, at the time of the fire, it was unclear whether the hotel would ever be rebuilt. Certainly, it would have been unfair to require plaintiff, whose business model depends on repeat customers, to return after using an alternate location in 2007 and 2008. Thus, there was no mutuality of obligation and the contract was rendered unenforceable. Accordingly, the motion for summary judgment on the second and third causes of action is denied.

Defendant cross-moves for summary judgment on its first counterclaim, which seeks damages on the grounds that plaintiff caused the fire. This claim is barred by the statute of limitations. Accordingly, the plaintiff's motion to dismiss the first counterclaim is granted.

The second counterclaim, incredibly, seeks damages on the grounds that LTT failed to pay for its use of the hotel in 2007 and 2008, notwithstanding that the hotel was closed. The cross-motion for summary judgment on the second counterclaim is denied and the motion to dismiss is granted on the grounds that performance was rendered impossible as the result of the fire.

Accordingly, the motion and cross-motion are granted to the extent that it is,

Ordered, that the plaintiff is granted summary judgment on the first cause of action; and it is further,

Ordered, that the remaining causes of action, and all the counterclaims are dismissed.

This constitutes the Order of the Court.

LEONARD LIVOTE, J.