Have A Breach Of Contract Claim? Don’t Forget To Identify The Provision Alleged To Be Breached – Part IIPrint Article
- Posted on: Mar 2 2020
In a prior post (here), this Blog discussed Barrett v. Grenda, 2017 NY Slip Op. 07031 (4th Dept. Oct. 6, 2017), a case in which the court dismissed a breach of contract claim because the plaintiff failed to identify the provision of an agreement alleged to have been breached. In NFA Group v. Lotus Research, Inc., 2020 N.Y. Slip Op. 01356 (2d Dept. Feb. 26, 2020) (here), the Appellate Division, Second Department affirmed the dismissal of a breach of contract action for the same reason: “the complaint failed to specify the provisions of the parties’ agreement that were allegedly breached.” Slip Op. at *1.
It is axiomatic that a plaintiff alleging a breach of contract must identify “the provisions of the contract upon which the claim is based.” Copeland v. Weyerhaeuser Co., 124 A.D.2d 998 (4th Dept. 1986), lv. dismissed, 69 N.Y.2d 944 (1987); see also Marino v. Vunk, 39 A.D.3d 339, 340 (1st Dept. 2007); Valley Cadillac Corp. v. Dick, 238 A.D.2d 894 (4th Dept. 1997); Matter of Sud v. Sud, 211 A.D.2d 423, 424 (1st Dept. 1995). He/she must “set forth the terms of the agreement upon which liability is predicated, either by express reference or by attaching a copy of the contract.” Chrysler Capital Corp. v. Hilltop Egg Farms, 129 A.D.2d 927, 928 (3d Dept. 1987). The failure to comply with the foregoing principles will result in dismissal.
NFA Group involved a license agreement pursuant to which the plaintiff, NFA Group, a/k/a Buyrrm (“NFA”), agreed to grant licenses to the defendant, Lotus Research, Inc. (“Lotus”), subject to a fee, for the use of plaintiff’s technology. Plaintiff alleged that defendant did not fulfill the agreement and breached the contract. In particular, NFA alleged that “[P]laintiff and defendant(s) entered into an agreement for work, labor, services, goods, and lease”; “Plaintiff duly performed all conditions on its part to be performed”; and “Defendant(s) has not performed leaving a balance due in the agreement in the specific sum $164,997.00”. Defendant moved to dismiss the complaint. The motion court granted the motion.
The motion court held that the allegations in the complaint were vague and speculative and insufficient to support a claim for breach of contract. The reason, said the motion court, the complaint failed to allege “a specific provision of the contract [that] was breached.” Slip Op. at **2-3, quoting Gianelli v. RE/MAX of New York, 144 A.D.3d 861 (2d Dept. 2016). The court explained that “although the contract between the parties consists of over twenty pages,” NFA failed to “point[ ] to any specific provision of the contract that was allegedly breached.” Id. at *3 (citing Four Cees Jewely Inc. v. 1537 Realty LLC, 11 Misc. 3d 1056(A) (Sup. Ct., N.Y. County 2005). Such a failure was fatal to plaintiff’s claim.
As noted, the Second Department affirmed, holding that “the complaint failed to specify the provisions of the parties’ agreement that were allegedly breached.” Slip Op at *1.
As a general matter, to allege a breach of contract, a plaintiff must plead (and prove) the following: (1) the existence of an enforceable agreement; (2) performance by plaintiff; (3) the defendant breached the agreement; and, (4) the plaintiff sustained damages as a direct result of the defendant’s breach. JP Morgan Chase v. J.H. Elec. of N.Y., Inc., 69 A.D.3d 802, 803 (2d Dept. 2010). Material to any breach of contract claim is the provision(s) upon which the claim is based. After all, if the plaintiff cannot identify the terms of the agreement alleged to have been breached, s/he cannot prove that the defendant breached the agreement. Plaintiff in NFA Group learned this lesson the hard way.